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Grave Concerns About New Mexico's Public Regulation Commission

Peter Goodman

Commentary: In our changing world, how is the Public Regulation Commission (PRC) performing as a protector of the public? 

The world is moving toward renewable energy sources. Soon each house, business, and manufacturer will supply most or all of its energy from solar panels. A new California law requires that new buildings include solar panels – and even the home-builders apparently agree. Yeah, a new home will cost a bit more; but minimal or nonexistent utility bills will rapidly repay the investment. 

Lower solar costs and rapid improvements in storage are facilitating a decentralized system. The power grid will become more like a bank, with each of us depositing a bit of excess power much of the time and occasionally borrowing back some. We no longer need nearly so many huge gas-fired plants constantly sending large amounts of energy to our cities.

That decentralization is what utilities fear most. If they can build and own huge systems – gas, coal, nuclear, even solar – they make big profits. By tying profits to capital expenditures, our state's system arguably encourages waste. But if we each generate more of that energy, and utilities create less power (and transfer it from afar) and mostly direct energy traffic through the grid, their profits and our rates are more limited. Utilities have been standing on the brakes of this change, but it's coming. 

It could be here now. 

Meanwhile, El Paso Electric builds more huge plants because that's more profitable than energy-efficiency measures such as time-of-use rates, lowering peak demand, and encouraging distributed rooftop solar. 

The PRC has approved five new EPE gas plants in five years. These deals saddle us with those plants – and their high costs – for 40-50 years. One estimate says those new gas plants could cost us $5 billion over time. 

A friend compares it to investing zillions in mainframe computers just when PCs were taking over the world. Will we spend decades paying for dinosaurs? 

The PRC decides how we invest, after considering complex analyses and arguments. The playing field might seem tilted against us. Utility companies' sole legal duty and desire is to maximize profits. They have highly capable lawyers they pay well, passing on the costs to us. Although many states' PRCs have independent customer advocates, paid to argue for ratepayers' interests, we don't. The PRC hears one side presented by top professionals, and the other side presented by a few dedicated nonlawyer volunteers – assuming they can even negotiate the procedural maze those lawyers know by heart. (Recently some cities and counties have also intervened.) 

Even if commissioners are unbiased and want to be fair, they're hearing a case skewed toward one side. 

Despite that, hearing examiners, who read all the briefs and hear all the witnesses, have recently recommended decisions against utilities. PRC counsel has agreed. But the Commission has repeatedly voted 3-2 to overrule the hearing examiner in favor of utilities. (PRC Chair Sandy Jones has logical explanations for the votes, and notes he's overruled the hearing examiner in ways the utilities didn't like, including overruling one decision that intervenor Merrie Lee Soules's testimony couldn't be considered.) 

Those two cases are on appeal to New Mexico's Supreme Court. 

Since 2008 real median income in New Mexico is down 3.6%. Public Service Company of New Mexico's compensation is up 122%, and its stock price up 301%. 

It's hard not to be concerned.