State needs transparency in energy bids
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.