Dear Friend, In 2022 PNM sent out an average of 22,000 disconnect notices per month. Each one of those notices constitutes a family emergency, putting mothers, fathers and grandparents under incredible strain as they scramble to figure out how to keep the lights on, choosing between energy for light, heat, cooling and refrigeration and food or medicine for the family. The long term impacts of energy insecurity include poor health and educational deficits, and can lead to a downward spiral of financial insecurity and homelessness. We refer back once again to this excellent 2022 Searchlight NM article that illustrates the heartbreaking consequences of utility policy for low income families in New Mexico, especially children. New Energy Economy's fight to hold PNM accountable is not just about climate, it is also about economic justice for captive utility customers that depend on state regulators to protect their rights from a private corporation that cares only about profit. That is why on Friday New Energy Economy filed a Joint Brief in Chief at the NM Supreme Court with the New Mexico Department of Justice, the County of Bernalillo and the Abq-Bernalillo County Water Utility Authority in our appeal of the Public Regulation Commission (PRC)'s Final Order in Case No. 22-00270-UT, the 2022 PNM Rate Case, which failed to require that PNM pays the price for imprudent decisions that have harmed, and continue to harm, all of us. Our Joint Brief challenges the PRC's decisions to: 1. Allow PNM to continue to collect $153 million in imprudent costs related to its investments to extend the life of the coal fired Four Corners Power Plant. The Hearing Examiner determined that ratepayers suffered $238 million in financial harm as a consequence of that poor decision, but inexplicably and illegally recommended that only $85 million be disallowed from rates. PNM continues to collect the remainder, along with a guaranteed Return on Equity premium on every dollar, from its customers. 2. To allow PNM to collect $45M from ratepayers for imprudent leases of power from the Palo Verde Nuclear Generating Station. A prior PRC already determined those lease purchases to be imprudent, but this PRC allowed the company to charge ratepayers for the purchase price regardless, even after the leases were already sold. 3. To put off enforcement of a prior PRC requirement that PNM quantify shareholders responsibility for the future decommissioning costs related to those imprudent leases in this Case, a potentially enormous risk for ratepayers when the nuclear plant finally closes. Decommissioning (closing) a nuclear power plant and dealing with the radioactive waste is a hugely expensive endeavor that ratepayers are now on the hook to pay for because of PNM's imprudent nuclear investment! 4. To allow PNM to charge customers for 100% of the costs and salaries of the PNM Board of Directors, whose first and only required fiduciary duty is to increase profits for shareholders. Because utility ratepayers are captive customers, a utility’s sole motivation to act prudently arises from the prospect that costs related to imprudent decisions may be disallowed from rates. In rewarding PNM's imprudent decisions, allowing company executives and shareholders to earn extra profit by investing hundreds of millions in expensive coal and nuclear power when there were cheaper renewable options, the PRC sends a signal that the utility can continue to act in its own interests, raising energy costs for New Mexicans and slowing the energy transition without fear of meaningful consequences. PNM's rate application sought to increase electricity rates by 9.65% for the average customer, and raise its guaranteed Return on Equity premium to 10.25%. We successfully argued for the finding that PNM's investments in the Four Corners Power Plant were imprudent, and that PNM's arguments for raising its Return on Equity had no merit. These were significant findings that ultimately resulted in a 8% reduction in rates instead of the increase PNM sought, and a reduction of the Return on Equity to 9.26%. However, that hard fought victory was incomplete. PNM's imprudently acquired profits come directly out of the pockets of New Mexican families, especially the poor who bear the highest energy burden and live in the least energy efficient buildings. That transfer of ill-gotten wealth moves from the paycheck of every PNM customer, who has no choice in their energy provider, directly into the pockets of wealthy PNM board members, executives and Wall Street investors. When utilities fail to follow the rules they get a slap on the wrist, while low-income families face the very real threat of eviction. Utilities must be held accountable so they don’t keep doing the same thing. We trust that the New Mexico Supreme Court Justices will uphold the law, enjoining the Commission to respect the precedent that the Court themselves laid out in PNM v. PRC, 2019-NMSC-012, ¶ 42 - “the proper remedy for a utility’s imprudence should equal the amount of the unreasonable investment in order to hold ratepayers harmless from any amount imprudently invested.” |
