ALBUQUERQUE, N.M. — Three Democratic state lawmakers who initially supported New Mexico’s landmark energy law are proposing changes to protect utility customers from significant rate hikes in the future.
Sens. William Tallman and Antoinette Sedillo Lopez of Albuquerque and Elizabeth Stefanics of Cerrillos said there was a deregulation provision tucked into the 2019 Energy Transition Act that effectively removed the authority of state regulators to oversee the amount of compensation Public Service Co. of New Mexico would receive from customers when it closes the coal-fired San Juan Generating Station in 2022.
They warned that the provision might not only apply to coal-fired power plants but to nuclear plants as well.
“The costs imposed on ratepayers for all plants will be substantial, but the costs associated with the Palo Verde Nuclear Generating Station could be astronomical,” the lawmakers wrote in a column published Sunday. “Nuclear energy has become very expensive when compared with the cost of renewable energy, therefore Palo Verde’s closure may be imminent.”
PNM, New Mexico’s largest electric utility, owns a stake in the Arizona nuclear plant. The company announced over the summer that it would not renew leases for some of the plant’s capacity to make room for more renewable energy, but it will still maintain ownership of 288 megawatts as part of a plan to be emissions-free by 2040.
Aside from mandating more renewable energy, New Mexico’s energy law includes a financing mechanism that supporters have said is necessary for the closure of the San Juan Generating Station near Farmington. It allows PNM to recover investments in the plant by selling bonds that will be paid off by utility customers. The bonds will raise roughly $360 million to fund decommissioning costs, severance packages for displaced workers and job training programs.
Some consumer advocates had raised concerns when the law was being debated, saying the financing structure placed the burden on customers rather than utility shareholders.
Gov. Michelle Lujan Grisham and top Democrat lawmakers who helped shepherd the bill through the Legislature claimed in public statements and in court filings that the law didn’t infringe on the Public Regulation Commission’s authority. The Democratic leaders, along with environmentalists, touted the bill as a way to shift the state toward more renewable energy.
The legislation proposed by the three senators would amend the energy law to reinstate the commission’s oversight for utility plant closures. They described the changes as “surgical amendments.”
“The PRC’s history of supervising plant closures is one of striking a balance between a utility’s desires and the interests of ratepayers,” the senators wrote. “With the ETA, PNM escaped this balancing process and may get another one-sided deal when Palo Verde closes. This could easily result in an unfair, multi-billion dollar impact on ratepayers.”
Camilla Feibelman with the Rio Grande Chapter of the Sierra Club said rather than rehashing claims about the energy law, lawmakers should instead focus on finding more ways to curb emissions from vehicles and the oil and gas industry.
Larry Behrens, a regional director for the traditional energy advocacy group Power The Future, said the proposed legislation proves that initial concerns about the energy law’s effects on utility bills were valid.