High court to hear energy law case

State’s largest utility wants to increase rates to recoup investment in aging coal-fired plant

The New Mexico Supreme Court on Thursday agreed to hear oral arguments in a case that would determine whether the state’s largest electric utility can increase customers’ rates to recoup its investments in an aging coalfired power plant, under the terms of a new renewable energy law.

Oral arguments were set for Jan. 29 in the case, which centers on Public Service Company of New Mexico’s planned shutdown of the San Juan Generating Station near Farmington.

The court also denied motions to intervene in the case from the New Energy Economy, a nonprofit that opposes provisions in the state’s new

Energy Transition Act, and from Western Resource Advocates, an environmental advocacy group that supports the law.

They will hear only arguments from PNM’s attorneys about why the utility should be able to recover its investments.

The Energy Transition Act requires the state to shift to zero-carbon electricity generation by 2045, and would allow PNM to sell bonds that would be paid off by utility customers to recover investments in the plant.

But the state Public Regulation Commission, which oversees utilities, had delayed a decision on whether to apply the new law to PNM’s plan to shut down the coal plant.

New Energy Economy also opposed

the PNM provision in the clean energy law, calling it unconstitutional.

In October, the court denied New Energy Economy’s request for justices to declare the law unconstitutional and sent the case to the Public Regulation Commission to be determined.

The matter is back in the Supreme Court at the governor’s request.

Gov. Michelle Lujan Grisham had asked the state Supreme Court to force to the commission immediately apply the new law to the PNM case, and to allow PNM to abandon the San Juan Generating Station and recover investments it made in the coal plant.

Mariel Nanasi, executive director of New Energy Economy, said she is frustrated the nonprofit has been shut out of the case and argues PNM could end up charging ratepayers far more than a projected $360 million.

Steve Michel, deputy director of the clean energy program for Western Resource Advocates, argued against Nanasi’s criticisms of the law and said it actually saves money for utility customers. He accused Nanasi of trying to undermine a law that helps the state transition to clean energy.

“I’m glad they scheduled it for argument and that they’re working on it,” he said of the Supreme Court’s decision. “It’s an important issue.”