Mar. 26—Advocacy organizations and at least two government agencies this week criticized Public Service Company of New Mexico's plan to finance its departure from the coal-fueled San Juan Generating Station as unfair to customers.
In documents filed with the state Public Regulation Commission, at least some of the critics accuse PNM of planning to double-bill customers for costs associated with the San Juan plant in northwestern New Mexico, first through their monthly bills and later through delayed low-interest bonds issued under the state's 2019 Energy Transition Act. They estimate the utility could end up overcharging customers by up to $125 million.
PNM spokesman Ray Sandoval said Friday his company intends no deceit and that there is a misunderstanding of the utility's plan. "There's no way we're going to" double-bill customers, Sandoval said Friday.
"There's no ability to double dip by PNM because the rates are set by the PRC," Sandoval wrote in an email. "PNM's plan calls for an offset [or credit] of the revenue generated from the San Juan plant after its closure and the regulatory process itself prevents any double dipping from occurring."
Sandoval said PNM will track customer costs incurred after the plant has closed and credit them for those costs in the next rate hike.
The issue involves PNM's abandonment later this year of the San Juan Generating Station and the way the departure will be handled financially. When it leaves the plant, PNM will still owe $283 million for some capital projects there, and paying those off is the sticking point.
Western Resource Advocates, the Coalition for Clean Affordable Energy and Prosperity Works said in a joint document filed Thursday that at about the same time PNM leaves San Juan, the utility has been expected by law, a commission order and its own words to issue long-term bonds and give customers financial credits.
Now, they said, PNM is proposing to hold off on issuing the Energy Transition Act bonds and wait to credit customers until the next time it raises rates, which could be in late 2023 or after. The critics said this gives PNM an opportunity to double charge customers, first through payments it collects before its next commission-approved rate increase and then through the 25-year bonds PNM eventually issues.
Western Resource and its partners said the costs "recovered in [customer] rates are the same stranded costs that the company will recover again" through the bonds.
PNM denied it was planning to overcharge customers in a response to Western Resource Advocates' initial filing in the case a month ago. It said the organization relied "on incomplete and inaccurate factual assertions."