With PRC soon to change, two big cases sit before Supreme Court

·5 min read

Jan. 17—A new state Public Regulation Commission will oversee electric utilities a year from now, replacing a panel that last month rejected two proposals with big implications for New Mexico electricity.

Public Service Company of New Mexico, which was on the losing end of both commission rulings, has appealed the cases to the state Supreme Court. Even if the proposals — one to merge with two huge utility companies and the other to remove itself from the coal-burning Four Corners Power Plant — fail before the Supreme Court, PNM may have a road to success in 2023.

The five-member elected commission will be scrapped at the end of this year and replaced by a three-member, governor-appointed, senate-approved commission. New Mexico voters passed this change in 2020 after years in which the commission experienced infighting and controversy.

Many will welcome a new commission that is selected in a different way. Among those is Shannon Fitzgerald of the International Brotherhood of Electrical Workers Local 611. "As long as they put the appropriate people in there, it's got to be better," Fitzgerald said late last week.

Now the question arises as to whether the current commission's body of work could unravel before the state Supreme Court or under a different commission.

"It can always be undone," Commissioner Stephen Fischmann of Las Cruces said. "It's a concern. And certainly that could happen."

"I don't have control over it," Commissioner Cynthia Hall of Albuquerque said of the next commission's decisions. "All I know is I won't be there, Steve [Fischmann] won't be there, the rest of the commission won't be there."

Commission Chairman Joseph Maestas of Santa Fe alluded to the short remaining tenure of the commission Wednesday. "I think it's no secret that we're all going to be out of office in less than a year," Maestas said during a PRC meeting.

The commission made two rulings last month with the potential for a profound impact on the state. First it rejected PNM's plan to merge with, and come under the umbrella of, Avangrid of Connecticut and Iberdrola of Spain.

The yearlong merger process revealed service problems of Avangrid subsidiaries and an investigation of alleged illegal behavior by current and former Iberdrola executives.

PNM and Avangrid blitzed newspapers and television with advertising to make their arguments for merging. The plan had the support of Gov. Michelle Lujan Grisham, Attorney General Hector Balderas and numerous community and environmental groups.

But PRC hearing examiner Ashley Schannauer, a quasi-judge in the case, wrote a biting assessment in early November of the merger proposal in his recommendations to the commission. The commission unanimously rejected the merger application Dec. 8.

Maestas said during that meeting, "Generally speaking, a commission decision that drastically departs from a hearing examiner's recommended decision significantly reduces its chances of being upheld before the Supreme Court upon appeal."

A week later, the commission also unanimously rejected PNM's method of leaving the Four Corners Power Plant in northwestern New Mexico. Their decision came despite a hearing examiner's recommendation that it be approved.

In that case, PNM intended to remove itself from the power plant near Farmington by handing its share of the coal-burning facility to Navajo Transitional Energy Co.

PNM then hoped to issue $300 million in low-interest bonds, paid by customers, in part for capital expenditures it made at Four Corners in recent years. Critics argued many of those expenditures were unwise and shouldn't be customers' responsibility.

The acquisition of low-interest bonds would be enabled by the 2019 state Energy Transition Act, which set goals for clean energy and encouraged the end of reliance on plants such as Four Corners.

But Navajo Transitional arguably is incentivized to keep Four Corners open as long as possible to retain revenue and jobs the plant provides to local communities and the Navajo Nation. Commissioners said this method of getting out of Four Corners did the opposite of the Energy Transition Act's intentions.

Maestas said last week the facts in the Four Corners case merited the commission's decision. Commissioners were reluctant to discuss the specific cases because they are pending before the Supreme Court.

PRC cases that have been appealed and received Supreme Court scrutiny typically have gone in the commission's favor in the past five years. A review of 11 cases shows commission findings were upheld in seven and rejected twice; one produced a mixed ruling and the 11th was not "ripe for review," justices ruled.

Hall, who served as a commission attorney before becoming a commissioner herself in 2017, said the lame-duck status of this panel should have no bearing on the Supreme Court's rulings. What matters, she said, is what the evidence and record show.

But as to whether the Supreme Court will uphold the commission on the merger and Four Corners cases, Hall said: "I don't have any idea. ... Again, that's something that's out of my control."

If the court upholds the commission's decisions, it's not clear whether PNM and Avangrid would take their proposals to a new commission next year. Avangrid and PNM did, however, recently extend their agreement to keep working on the merger together through April 20, 2023.

Avangrid said in a news release Jan. 3, "The extension filed today will allow the companies time to continue to work together through the appeal process."

When asked about 2023, PNM spokesman Ray Sandoval said he wouldn't address "hypotheticals."

Commissioner Theresa Becenti-Aguilar of northwestern New Mexico said she didn't think a new commission would have the depth of knowledge to try to undo what her commission has done.

Becenti-Aguilar expressed pride in her work on the panel and said she will be honored to cross the finish line with this commission.