NM governor wants changes in utility regulation for more renewables

San Juan coal plant
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ALBUQUERQUE, N.M. (AP) — New Mexico Gov. Michelle Lujan Grisham is questioning recent decisions by a powerful regulatory commission as it weighs the pending closure of a major coal-fired power plant in a case that will test the state's new energy transition law.

The first-year governor says reforming the Public Regulation Commission is needed to ensure the success of the landmark legislation that sets more ambitious renewable energy goals and charts a course for shuttering the San Juan Generating Station.

Lujan Grisham, during an energy summit Tuesday, announced her intention to have lawmakers consider commission reforms during the next legislative session.

"If our goal is to protect ratepayers, create economic opportunities for New Mexicans and take advantage of our state's renewable energy potential, we have too much at stake to sit on the sidelines," she said in a statement.

Lujan Grisham said reforms should be aimed at restoring what she called "sound decision-making" and that the commission should be "reliable and professional."

Commissioners were unable to comment Wednesday, citing a policy that prevents them from discussing issues that are related to pending cases.

The governor's office didn't propose any specific reforms but plans to take comments from stakeholders ahead of the January session.

The fight over regulatory oversight comes as the Public Regulation Commission embarks on what environmentalists, consumer advocates and others say is a watershed case that will determine how New Mexico implements the Energy Transition Act signed into law earlier this year.

Public Service Co. of New Mexico recently submitted its application for closing the San Juan Generating Station near Farmington. The filing includes a mechanism for financing the closure and providing benefits and training to the workers who will be displaced. It also outlines options for replacing the lost power. All the elements hinge on the new law.

In addition to mandating emissions-free electricity by 2045, the law allows PNM and other owners of the San Juan plant to recover investments and decommissioning costs by selling bonds that are later paid off by utility customers.

The Public Regulation Commission opted to consider a portion of PNM's application as part of an ongoing case that involved abandonment of the power plant, raising questions as to whether the new law would be applied to the decision-making process since it took effect after that case began.

That move drew criticism from the governor's office, some lawmakers and environmentalists.

Others have voiced concerns about whether the energy law could ultimately result in higher energy costs by stripping the commission of its authority and responsibility to balance shareholder interests with those of customers and the environment.

Democratic legislative leaders echoed the governor, saying this week that the commission needs to be restructured to ensure the state meets its mandates for affordable, clean energy.

Utility executives have said residential customers would end up saving about $7 a month in the first year after the coal-fired plant closes under its preferred proposal.

They haven't been able to say what, if any, savings customers would see after that.

It's expected to be more than a year before regulators decide on the power plant's closure and the replacement power, but the governor and her supporters are concerned any delays by regulators could derail plans by the utility to replace the lost power.

Aside from the governor's push for a revamped commission, the Legislature already has cleared the way for voters to consider a constitutional amendment that proposes reducing the commission from five to three members. Instead of being elected, they would be chosen by the governor from a list of qualified candidates compiled by a nominating committee.

 

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