The New Mexico Supreme Court is being asked to reconsider its decision that allowed the state’s largest electric utility company to delay issuing rate credits to customers that were caused by the recent closure of one of the largest coal-fired power plants in the Southwest.
The state’s attorney general and consumer advocates filed motions this week, arguing that delaying economic relief to customers for the September closure of the San Juan Generating Station undermines a New Mexico law guiding the state’s transition away from of electricity generated by fossil fuels.
In June, regulators ordered Public Service Co. of New Mexico to start issuing the credits, as customers would no longer benefit from the San Juan plant. The utility challenged the regulatory order and requested a stay, which the court granted earlier this month.
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The New Energy Economy group in its motion argues that PNM is violating the most fundamental principle of utility regulation: that a utility cannot collect taxpayer money for assets that do not provide service.
“This is a significant and unfair imposition on taxpayers, who must continue to pay PNM what is essentially ‘free money’ for the duration of this appeal or, according to PNM, until it decides to start its next rate case, which may take years — after this appeal concludes,” New Energy Economy said in a brief.
The Supreme Court has yet to decide the merits of the case, and it is unclear when it might consider the motions filed this week.
Consumer advocates also raised concerns that allowing the utility to delay rate credits for the San Juan plant could set a precedent for PNM to delay credits related to its divestment of shares in a power plant. Arizona Nuclear.
The New Mexico Supreme Court has been asked to reconsider a decision that allowed the delay in the issuance of energy credits.
The utility has argued that the suspension in the San Juan case should be upheld, saying the cost of doing business has risen and that delaying credit would mean lower rate increases for customers in the future.
The New Mexico Energy Transition Act was intended to ease the economic consequences of the coal-fired power plant closure near Farmington and set a path to ensure a zero-carbon standard for investor-owned utilities by 2045 and rural electric cooperatives by 2050.
While PNM has stated that it will meet the goal by 2040, there have already been delays to planned solar and battery storage projects that were supposed to replace capacity lost with the closure of San Juan. The utility has blamed global supply chain woes and acknowledged the challenges of meeting customer demands in 2023 and 2024.
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The joint motion filed by the attorney general’s office, Western Resource Advocates, Coalition for Clean Affordable Energy and Prosperity Works includes testimony from state Rep. Nathan Small, a Las Cruces Democrat who cosponsored the energy bill in 2019.
Small claimed that the rate credits in question would offset increases in customer bills that PNM is now collecting through its fuel and purchased power cost adjustment clause, which allows quarterly increases in electricity rates to recover funds. purchasing power in wholesale markets and fuel for power plants. .
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Testimony from an energy consultant included with the motion shows that PNM raised rates twice since July under the adjustment clause and that another increase was anticipated in January. The filing suggests that PNM’s financial interests could still be protected if the court were to lift the stay.
