PNM shareholders for a responsible future

Public Service Company of New Mexico’s past dependence and continuing investment in aging coalfired power generation is a concern to us and many other shareholders. At the company’s annual meeting last year, nearly 40 percent of shareholders voted in favor of our resolution to make a public inventory of all the company’s generation assets that are rapidly losing value. Buoyed by near success, we have introduced a similar resolution this year.

However, PNM is asking federal regulators to block the vote. We are confident that the company’s request will be denied, as it was last year, for the simple reason that keeping shareholders in the dark is bad business practice.

PNM claims to be moving toward renewable power, but it’s a slow walk. Why wait more than a decade for clean, renewable energy to be cost competitive? The International Renewable Energy Agency found that renewables will be consistently cheaper than fossil fuels by 2020. Nationwide, wind and solar already are generating massive amounts of energy at prices lower than dirty fossil fuel technologies ever achieved.

PNM is delaying a transition to renewable energy and putting investors at significant financial risk. For example, they plan to continue to own a share of the 50-year-old coal fired Four Corners Power Plant for another 13 years. State regulators could deny the company a profitable return if they find that investments needed to keep this aging plant operational are an unreasonable burden on ratepayers. Our shareholder resolution asks that the company quantify this potential regulatory risk.

More generally, our resolution seeks disclosure of the potential risk that hundreds of millions of dollars invested in coal-fired power plants will become “stranded” liabilities as the company transitions away from fossil fuels. PNM has made the argument this year in denying a shareholder vote that two reports and a draft plan submitted to state regulators discuss the potential for stranded assets. These, however, are merely public relations efforts that make a show of PNM’s environmental accomplishments while vaguely mentioning the threat of climate change.

PNM also opposes our shareholder resolution because it would be “premature and speculative” to disclose the risk of stranded assets before the state Public Regulation Commission rules on the company’s request for future rate increases. This not only contradicts their claim that stranded assets already have been disclosed, but it also defers disclosure of risk until after the stranding of assets occurs. Savvy investors want a reasonable assessment of the risk before existing or currently planned generation assets become stranded.

Finally, it’s unfair and shortsighted to ask New Mexico ratepayers to pay more to maintain shareholder profits. Residential rates have risen an astounding 62 percent in the past 10 years. The principle in state law that ratepayers and shareholders share financial responsibilities is fundamental to good corporate citizenship. We all need to be on the same team to achieve a just, timely and affordable transition to renewable energy.

To become a member of PNM Shareholders for a Responsible Future, contact redearthbarn@gmail.com. Help us build a prosperous and sustainable New Mexico economy.