The Four Corners Power Plant in Waterflow, N.M., near the San Juan River in northwestern New Mexico, is viewed in April 2006. Regulators have rejected an effort by New Mexico’s largest electric utility to recoup from customers millions of dollars of investments made in a coal-fired power plant in the northwestern corner of the state, Wednesday, Jan. 3, 2024. (AP Photo/Susan Montoya Bryan, File)
BY SUSAN MONTOYA BRYAN
January 3, 2024
ALBUQUERQUE, N.M. (AP) — Regulators rejected on Wednesday an effort by New Mexico’s largest electric utility to recoup from customers millions of dollars of investments made in a coal-fired power plant in the northwestern corner of the state and a nuclear power plant in neighboring Arizona.
The Public Regulation Commission’s decision means Public Service Co. of New Mexico customers will not have to bear some costs associated with PNM’s stake in the Four Corners Power Plant near Farmington or in the Palo Verde Generating Station outside of Phoenix. Commissioners said those investments were not prudent.
Overall, residential customers will see a decrease in rates instead of the 9.7% increase that the utility was seeking.
The commission said in a statement that PNM still will be able to collect a reasonable return on its investments while providing reliable service to more than 500,000 customers around the state.
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PNM filed a request for its first rate hike in years in late 2022, saying the nearly $64 million in additional revenue was needed as part of a long-term plan to recoup $2.6 billion in investments necessary to modernize the grid and meet state mandates for transitioning away from coal and natural gas.
The utility also had cited the expiration of lease agreements for electricity from the Palo Verde plant and the desire to refinance debt to take advantage of lower interest rates.
Hearing examiners with the Public Regulation Commission who reviewed the case recommended in December that the commission reject costs associated with the sale of leases at Palo Verde to a third party. They also said PNM’s 2016 decision to invest in extending the life of the Four Corners plant wasn’t prudent.
PNM officials said late Wednesday that they were reviewing the commission’s order. The utility has until Feb. 2 to seek a rehearing before the commission.
Consumer advocates and environmental groups were pleased the commission opted to reject some of the costs associated with PNM’s investments.
“The commission recognized that PNM failed to do its due diligence before reinvesting in Four Corners after 2016, when there were clear signs that coal is a costly and deadly fuel,” said Matthew Gerhart, a senior attorney with Sierra Club.
The utility had tried to divest itself from Four Corners by transferring its shares to a Navajo energy company. However, regulators rejected that proposal, a decision that was later upheld by the New Mexico Supreme Court.
Located on the Navajo Nation, the Four Corners plant is operated by Arizona Public Service Co. The utility owns a majority of shares in the plant’s two remaining units.
Navajo Transitional Energy Co. had sought to take over PNM’s shares, saying that preventing an early closure of the power plant would help soften the economic blow to communities that have long relied on tax revenue and jobs tied to coal-fired generation.
The nearby San Juan Generating Station was shuttered in 2022, sending financial ripples through the surrounding communities. PNM had operated that plant for decades.
Proposed merger of New Mexico, Connecticut energy companies ends; deal valued at more than $4.3B
Officials with New Mexico’s largest electric utility say a proposed multibillion-dollar merger with a U.S. subsidiary of global energy giant Iberdrola has ended
Via AP news wire
2 days ago
Officials with New Mexico’s largest electric utility said Tuesday that a proposed multibillion-dollar merger with a U.S. subsidiary of global energy giant Iberdrola has ended.
Under the proposal, Connecticut-based Avangrid would have acquired PNM Resources and its two utilities — Public Service Co. of New Mexico and Texas New Mexico Power.
The all-cash transaction was valued at more than $4.3 billion and would have opened the door for Iberdrola and Avangrid in a state where more wind and solar power could be generated and exported to larger markets.
“We are greatly disappointed with Avangrid’s decision to terminate the merger agreement and its proposed benefits to our customers and communities,” PNM president and CEO Pat Vincent-Collawn said in a statement.
PNM officials previously said the proposed multimillion-dollar merger with Avangrid would have helped create jobs, serve utility customers and boost energy efficiency projects in New Mexico.
They said being backed by Avangrid and Iberdrola would provide the New Mexico utility greater purchasing power and help move it closer to its carbon-free goals.
The multimillion merger plan was originally crafted in 2020.
Last January, PNM Resources filed a notice of appeal with the New Mexico Supreme Court after regulators rejected the proposed merger. The court heard oral arguments last fall but has yet to issue a ruling.
Officials with Avangrid, which owns New York State Electric & Gas and other utilities in the Northeast, said Tuesday that there is no clear timing on the resolution of the court battle in New Mexico nor any subsequent regulatory actions.
The Public Regulation Commission had said it was concerned about Avangrid’s reliability and customer service track record in other states where it operates.
The elected commissioners also pointed to the company initially withholding information during the lengthy proceeding, a move that resulted in a $10,000 penalty.
Mariel Nanasi, executive director of New Energy Economy and a critic of the proposed merger, said Tuesday that Avangrid and Iberdrola’s customer service record and attitude toward regulatory oversight caused New Mexico regulators to reject the proposal.
“Their continuing failure to properly serve their customers is proof positive that the PRC made the right call,” she said, adding that New Mexico escaped a multinational corporate takeover of what she described as an essential piece of infrastructure for the rural state.
Officials with New Mexico’s largest electric utility say a proposed multibillion-dollar merger with a U.S. subsidiary of global energy giant Iberdrola has ended
Via AP news wire
2 days ago
Officials with New Mexico’s largest electric utility said Tuesday that a proposed multibillion-dollar merger with a U.S. subsidiary of global energy giant Iberdrola has ended.
Under the proposal, Connecticut-based Avangrid would have acquired PNM Resources and its two utilities — Public Service Co. of New Mexico and Texas New Mexico Power.
The all-cash transaction was valued at more than $4.3 billion and would have opened the door for Iberdrola and Avangrid in a state where more wind and solar power could be generated and exported to larger markets.
“We are greatly disappointed with Avangrid’s decision to terminate the merger agreement and its proposed benefits to our customers and communities,” PNM president and CEO Pat Vincent-Collawn said in a statement.
PNM officials previously said the proposed multimillion-dollar merger with Avangrid would have helped create jobs, serve utility customers and boost energy efficiency projects in New Mexico.
They said being backed by Avangrid and Iberdrola would provide the New Mexico utility greater purchasing power and help move it closer to its carbon-free goals.
The multimillion merger plan was originally crafted in 2020.
Last January, PNM Resources filed a notice of appeal with the New Mexico Supreme Court after regulators rejected the proposed merger. The court heard oral arguments last fall but has yet to issue a ruling.
Officials with Avangrid, which owns New York State Electric & Gas and other utilities in the Northeast, said Tuesday that there is no clear timing on the resolution of the court battle in New Mexico nor any subsequent regulatory actions.
The Public Regulation Commission had said it was concerned about Avangrid’s reliability and customer service track record in other states where it operates.
The elected commissioners also pointed to the company initially withholding information during the lengthy proceeding, a move that resulted in a $10,000 penalty.
Mariel Nanasi, executive director of New Energy Economy and a critic of the proposed merger, said Tuesday that Avangrid and Iberdrola’s customer service record and attitude toward regulatory oversight caused New Mexico regulators to reject the proposal.
“Their continuing failure to properly serve their customers is proof positive that the PRC made the right call,” she said, adding that New Mexico escaped a multinational corporate takeover of what she described as an essential piece of infrastructure for the rural state.
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