August 18, 2023
Public Service Company of New Mexico and a coalition of parties, including WRA, the New Mexico Office of the Attorney General and the County of Bernalillo, filed an agreement today to resolve the utility’s decision to delay issuance of cost-saving rate credits following the September 2022 closure of the San Juan Generating Station. Customers may soon see an average monthly savings of 11% on their utility bills over a 12-month period.
In 2019, New Mexico passed the Energy Transition Act, which enabled the use of low-interest bonds to save customers money and provide economic transition benefits to plant and mine workers of shuttered power plants, as well as their communities. The measure also helps fund the development of renewable power in San Juan County.
PNM originally promised customers that it would issue those low-interest bonds to recover its investments in San Juan at the time the coal plant was shut down. Timely bond issuance would have removed the high costs of operating the plant from customer rates, saving PNM customers money at a time when utility bills across the West spiked due to the volatility of gas.
However, PNM did not issue these bonds, touching off a regulatory and legal battle between the utility and the New Mexico Public Regulation Commission. The PRC ordered PNM to implement the rate credit rather than effectively continue charging customers for a coal plant that was no longer running or providing electricity to New Mexicans. PNM appealed to the New Mexico Supreme Court, which effectively ruled in November 2022 that the utility could continue to charge customers until the conclusion of its 2023 rate case.
After two months of negotiation, PNM has now agreed to drop its appeal with the state Supreme Court. Upon approval of the remand motion by the Court, the settlement will head to the PRC for review. If approved, the $115 million rate credit will be issued to customers within 30 days, and savings will be returned to customers over a 12-month period.
“Financing closure of the San Juan Generating Station using bonds authorized by the Energy Transition Act was the right move for New Mexico because it generates transition assistance for impacted communities and workers. But PNM’s decision to delay issuance of the bonds threatened to deprive customers of the financial benefits of the transition to clean energy,” said Cydney Beadles, New Mexico clean energy senior attorney at WRA. “I’m pleased that after working together with a diverse group of advocates, PNM will now credit its customers with the costs of a coal plant that ceased operation nearly a year ago.”
The full coalition that worked with PNM towards today’s settlement was composed of WRA, PRC Staff, Bernalillo County, the New Mexico Attorney General, New Mexico Affordable Reliable Energy Alliance, Albuquerque-Bernalillo County Water Utility Authority, the City of Albuquerque, Coalition for Clean Affordable Energy, Prosperity Works and New Energy Economy.