State needs trans­parency in en­ergy bids

Santa Fe New Mexican - - OPINIONS - MY VIEW ROBB HIRSCH Robb Hirsch is a New Mex­ico en­ergy busi­ness­man.

On Sept. 21, I gave the fol­low­ing tes­ti­mony be­fore the New Mex­ico Pub­lic Reg­u­la­tion Com­mis­sion: As past pres­i­dent of the New Mex­ico In­de­pen­dent Power Pro­duc­ers, now head­ing up a busi­ness called En­ergy, Sus­tain­able De­vel­op­ment & Lead­er­ship Con­sult­ing, and most im­por­tant, as a ratepayer, I think it’s com­mend­able that Pub­lic Ser­vice Com­pany of New Mex­ico wants to do more so­lar in our state (only 2 per­cent of our power gen­er­a­tion in New Mex­ico comes from so­lar to­day) and have a New Mex­ico com­pany build a new 50 MW so­lar gen­er­a­tion fa­cil­ity.

How­ever, the project pro­posal process used in this case will set a prece­dent for more sig­nif­i­cant re­quest for pro­pos­als in the fu­ture. That’s when we’ll need to do a lot more new gen­er­a­tion to re­place an­ti­quated pol­lut­ing plants. Let’s en­sure we max­i­mally ben­e­fit our state by hav­ing a trans­par­ent and le­git­i­mate process for en­tic­ing the com­bined low­est cost, most re­spon­si­ble and re­li­able power so­lu­tions.

PNM al­lowed only 31 days for a re­sponse to this so­lar re­quest for pro­pos­als (in­stead of more ap­pro­pri­ately 60 or 90 days) and man­dated un­rea­son­able re­quire­ments — in­clud­ing a pre­req­ui­site to have an in­ter­con­nec­tion agree­ment in place — that made this process ex­clu­sive. We need a truly open process en­cour­ag­ing free mar­ket competition in New Mex­ico to bring out the best in­ter­na­tional, na­tional and lo­cal com­pa­nies to re­spond to th­ese re­quest for pro­pos­als. We need an open, free and fair mar­ket­place invit­ing the most cost-ef­fec­tive and in­no­va­tive so­lu­tions, but PNM’s process in this case did not al­low for that. It pre­s­e­lected a util­ity-owned so­lar so­lu­tion with­out a gen­uinely fair bid­ding process.

I am pleased that the hear­ing ex­am­iner re­sponded to my pub­lic com­ment and the ev­i­dence in this case by claim­ing the process was “un­fair and un­com­pet­i­tive,” and en­cour­ag­ing PNM to go back out to bid prop­erly. This de­ci­sion, if af­firmed, can help bring in­tegrity to the re­quest for pro­pos­als process and ben­e­fit New Mex­ico’s ratepayers.

While it is un­der­stand­able that PNM wants to own re­new­able en­ergy projects, given that the com­pany can make more money that way, ul­ti­mately we need to work to­gether to re­form the busi­ness model of util­i­ties. They can be trans­formed from mo­nop­o­lies to fully trans­par­ent, free mar­ket-ori­ented cus­tomer ser­vice providers. In the mean­time let’s not pre­tend we have competition and le­git­i­macy just by is­su­ing re­quest for pro­pos­als. The re­quest for pro­pos­als struc­ture, terms, time frame and de­ci­sion-mak­ing process all have to be le­git­i­mate.

The hear­ing ex­am­iner’s rul­ing in fa­vor of free en­ter­prise, fair competition and trans­parency will en­cour­age a true ar­ray of ex­cel­lent en­ergy providers vy­ing to pro­duce cost-ef­fec­tive and op­ti­mal so­lu­tions for New Mex­ico con­sumers. I sin­cerely hope the New Mex­ico Pub­lic Reg­u­la­tion Com­mis­sion fol­lows that wise ad­vice in this case.

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