Regulators revisit PNM nuclear investment

Environmental groups disagree on how to address issue

Environmental groups disagreed Wednesday over how the state Public Regulation Commission should tackle questions surrounding an investment by New Mexico’s largest utility in an Arizona nuclear power plant.

Although the panel heard oral arguments from the environmental groups, Public Service Company of New Mexico and others, it’s unclear when the commission will make a decision.

The commission in 2016 found PNM’s decision to repurchase part of the Palo Verde plant and renew leases for power had been “imprudent” because no financial analysis was done and the company did not look at alternative power sources.

As a result, regulators voted to limit the amount that PNM could recoup from ratepayers for spending on the nuclear plant.

However, the state Supreme Court in May said the commission violated the utility’s due process rights by not giving proper notice before it denied PNM’s ability to recover through rates future decommissioning costs at Palo Verde.

At Wednesday’s hearing, PNM lawyer Rick Alvidrez said the commission should take up the matter of Palo Verde decommissioning costs when the utility files its next rate case, expected sometime before the end of the year.

Agreeing with him was a staff attorney for the commission as well as lawyers for the Coalition for Clean Affordable Energy — an umbrella group for several organizations — and Western Resource Advocates. Representatives of these groups argued that environmental effects, reliability and other factors must be considered in addition to costs.

Chuck Noble said on behalf of the coalition he didn’t think PNM would have had a cheaper alternative at the time it reinvested in Palo Verde. And deterring PNM from using nuclear energy from Palo Verde, he argued, could lead to more carbon emissions because the company would have to use more natural gas to make up for the 64 megawatts of lost nuclear power.

But Mariel Nanasi, director of Santa Fe-based New Energy Economy, argued the commission should decide the issue as soon as possible and not wait for a new rate case before requiring the utility to prove the cost-effectiveness of its decisions.

“You are the only shield for ratepayers,” she told the commission. “You are the only shield that protects the people from PNM’s voracious greed.”

Nanasi noted that because Palo Verde is located out of state, buying power from the plant “does not create a single job for New Mexicans.”

The state Energy Transition Act, which was signed into law this year, mandates bigger percentages of renewable energy from electric utilities.

PNM, which has just over 10 percent ownership in Palo Verde, has said it plans to be carbon free by 2040. While the company’s plan includes using power from Palo Verde, it doesn’t call for any additional nuclear energy.