Customer rates fuel debate around New Mexico power plant
ALBUQUERQUE, N.M. (AP) — With little ceremony, it was lights out Thursday for one of the two remaining units at a coal-fired power plant in northwestern New Mexico that has provided electricity for millions of customers in the southwestern U.S. for nearly a half-century.
Unit 1 at the San Juan Generating Station was shuttered as state regulators ordered New Mexico’s largest utility to credit customers for millions of dollars in savings that will come from the plant’s closure in September, when the final unit goes offline.
Public Service Co. of New Mexico had planned to wait to pass along the savings until its next rate case before the Public Regulation Commission, but regulators in ordering quicker action said they have a responsibility to ensure that rates charged to customers are fair, just and reasonable.
“PNM’s new plan constitutes a moral hazard that, without the remediation ordered herein, threatens substantial and potentially irremediable harm to ratepayers,” the commission's order reads.
The utility has vowed to appeal the decision, warning that applying a short-term credit would not be reflective of the costs to provide service to customers and that new rates proposed later this year would be much higher than they otherwise would have been.
PNM executives have said that such a "roller coaster” would significantly affect customers.
Pat Vincent-Collawn, PNM Resources chair and CEO, characterized the commission's decision as an arbitrary penalty, noting that the utility opted not to file for rate increases over the last two years as it navigated a transition to more renewable energy resources.
The battle over financing and customer rates related to the closure of the San Juan plant has been ongoing for months.
A need to keep part of the plant open longer than...