August 18, 2023
FOR IMMEDIATE RELEASE
Santa Fe, NM – Today, New Mexico Attorney General Raúl Torrez announced that a settlement has been reached with the Public Service Company of New Mexico (PNM) to resolve the outstanding appeal related to the closure of the San Juan Generating Station (SJGS). Under the terms of the settlement, ratepayers will receive a $115 million rate credit over a one-year period and PNM will be permitted to issue bonds under the Energy Transition Act (ETA). In addition, the parties have agreed that the interest rate on the bonds will be capped at 5.5%, with an additional rate credit to be paid if the interest rate exceeds the cap.
“This settlement could not come at a better time for ratepayers affected by weather and the rising cost of food, housing and other basic needs,” said Attorney General Torrez. “Our team worked around the clock to get the best deal for ratepayers and I believe we have achieved that goal. I am gratified that we were able to work with PNM to get a full rate credit and to protect ratepayers from higher interest rates.”
In 2019, the Legislature enacted the ETA in order to encourage electric utilities to move away from the coal-fired generation of electricity by providing for the issuance of bonds upon abandonment of a qualifying generating facility. When PNM sought to abandon its coal-fired San Juan Generating Station (SJGS), the PRC approved the issuance of energy transition bonds. However, PNM delayed issuance of the bonds, which resulted in PNM collecting rates for the SJGS after abandonment in a way that was not contemplated by the ETA. The legality of the delay has been on appeal in the New Mexico Supreme Court. The Attorney General, in conjunction with all of the other intervenors in the appeal, negotiated with PNM and reached an agreement that will refund all of those excess rates to ratepayers.
“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 Attorney General, the other intervenors, and PNM are seeking a remand of the appeal to the PRC for approval of the settlement and for the eventual dismissal of the appeal. Ratepayers could see rate relief on their bills as early as 30 days after the appeal is dismissed.
Intervening parties involved in this settlement include Western Resource Advocates, New Energy Economy, New Mexico AREA, the County of Bernalillo, Albuquerque Bernalillo County Water Utility Authority, Coalition for Clean Affordable Energy and Prosperity Works.
A copy of the settlement is below.