New Mexico regulators weigh nuclear power investments

ALBUQUERQUE, N.M. (AP) — It will be up to New Mexico regulators how to address concerns surrounding decisions by the state's largest electric utility to reinvest in a nuclear power plant in neighboring Arizona.

The Public Regulation Commission heard oral arguments Wednesday from Public Service Co. of New Mexico, environmental groups and others. It's unclear how soon the commission could make a decision on how to proceed.

The case was sent back to regulators after the New Mexico Supreme Court in May upheld an earlier finding by the commission that PNM's investments in the Palo Verde Nuclear Generating Station were imprudent as no financial analysis was done.

The commission had found that the utility acted imprudently in repurchasing part of the Palo Verde and renewing leases for power from the plant. As a result, the commission decided to limit the amount of spending on Palo Verde that PNM could recoup from customers through rates.

The court found that PNM's due process rights were violated when the commission denied it the ability to recoup future decommissioning costs.

As a result, the court called on the commission to craft a new order, saying that parts of the previous decision that were deemed lawful could be included but it left the fight over decommissioning costs up to the regulators.

Lawyers for the utility and some environmental groups told the commission Wednesday that the matter can be settled in future rate cases.

Others argued the utility should be required to prove the cost-effectiveness of its decisions to ensure ratepayers' interests are protected.

"You are the only shield for ratepayers, you are the only shield that protects the people from PNM's voracious greed," Mariel Nanasi with New Energy Economy told the commissioners.

Citing poverty rates in New Mexico, she argued that poor people are most burdened by utility rates, especially when those rates are not justified with any kind of financial analysis.

Representatives with Western Resource Advocates and the Coalition for Clean Affordable Energy argued that aside from costs, the commission must also consider reliability, risk and environmental effects when making decisions about what resources are tapped.

Chuck Noble with the coalition told commissioners he didn't think there would have been a cheaper alternative to Palo Verde at the time the utility reinvested in the plant.

He also voiced concerns that if PNM had to replace its share of electricity generated by Palo Verde, it likely would have to run more natural gas-fired plants and that would increase emissions.

The debate comes as New Mexico investor-owned utilities and rural cooperatives face new mandates for adding more renewable energy to their portfolio.

PNM has said it plans be carbon-free by 2040. The electricity it gets from Palo Verde will still be part of its emissions-free portfolio, officials said. PNM has just over 10% ownership in the plant.