March 10, 2023
FOR IMMEDIATE RELEASE
Santa Fe, NM – Today, Attorney General Raúl Torrez filed a motion with the New Mexico Public Regulation Commission (PRC) to enforce the terms of the Energy Transition Act (ETA) and protect utility ratepayers from the Public Service Company of New Mexico’s (PNM) unilateral decision to delay the issuance of energy transition bonds.
Under the ETA, the revenue generated by the issuance of those bonds was intended to offset the cost of stranded assets at the San Juan Generating Station and mitigate the economic impact to ratepayers and local stakeholders. Under the terms of PNM’s own application to the PRC, issuance should have occurred “at or around the time the San Juan coal plant is closed.”
Despite the fact that the San Juan Generating Station stopped operating in 2022, PNM has elected to delay issuance of the energy transition bonds until late 2023 or early 2024 while simultaneously collecting rate payments from consumers for assets that are no longer in operation. The Attorney General has filed today’s motion because he is concerned that the delay in issuance and the corresponding rise in interest rates will result in significantly higher costs to ratepayers.
AG Torrez’s motion seeks to enforce the balancing of interests of ratepayers and investors found within the Public Utility Act and the ETA. The AG’s motion, joined by Western Resource Advocates, asks the Commission to make clear that because PNM delayed the issuance of the bonds well after the San Juan power plant had closed, PNM no longer has authority to issue ETA bonds. If PNM goes forward with the delayed bond issuance, the costs to customers will be much higher than had PNM issued the bonds as scheduled. The AG’s motion seeks to avoid that harm to customers.
“My office has a duty to protect the ratepayers in the state of New Mexico,” said AG Torrez. “The ETA and the PRC laid out a clear process that would have afforded PNM the opportunity to issue bonds upon the closure of the San Juan Generating Station, and that would have provided ratepayers with substantial cost savings. Because PNM chose to delay their bond issuance, there is now extraordinary economic uncertainty. What is certain is that now PNM cannot issue the bonds at the expense of ratepayers.”
“As co-sponsors of the ETA, we are disturbed by PNM’s plan to deprive its customers of $130 million in rate relief provided by the ETA. The ETA directed utilities to provide customers with rate reductions at the time a power plant closed. Unfortunately, PNM has not acted in good faith and has ignored this provision of the law. We fully support AG Torrez’ efforts to have the PRC remedy this situation,” said Senator Mimi Stewart and Representative Nathan Small.
A copy of the motion is below.