SUBSCRIBE NOW
99¢ per month. Save 90%.
SUBSCRIBE NOW
99¢ per month. Save 90%.

State Supreme Court says PRC cannot require utilities to file abandonment applications

Hannah Grover
Farmington Daily Times

AZTEC — The New Mexico Supreme Court ruled this week that the New Mexico Public Regulation Commission cannot force a utility to file an abandonment application for an asset like a power plant.

The opinion was written by Justice C. Shannon Bacon, stating that the PRC does not have the authority to initiate an abandonment proceeding.

This case stems from the PRC opening an abandonment docket in January 2019, in relation to Public Service Company of New Mexico’s use of the San Juan Generating Station.

The PRC argued that PNM had already taken irreversible steps toward leaving the power plant and that delaying the case could jeopardize the commission’s ability to protect the customers.

When it opened the docket, the PRC gave PNM until March to file the abandonment application.

A silo above a feeder holds coal that will later be burned, Wednesday, Sept. 25, 2019, at the San Juan Generating Station.

More:PRC tells PNM to file San Juan Generating Station abandonment application

The state Supreme Court placed a stay on that order. Then the New Mexico legislature passed the Energy Transition Act, which was signed into law.

After the new law went into effect in July 2019, PNM filed its application to abandon the San Juan Generating Station.

More:Utility wins, for now, in bid to delay filing for San Juan Generating Station abandonment

The PRC then argued that the new law couldn't apply to the San Juan Generating Station because the January docket had been opened before the law was passed. The Supreme Court struck down that argument earlier this year.

More:PRC: Energy Transition Act doesn't apply to PNM's plan to close San Juan Generating Station

The New Mexico Supreme Court has ruled that the New Mexico Public Regulation Commission cannot force a utility to file an abandonment application.

The court’s ruling this week has no bearing on the abandonment case. The PRC ruled in favor of abandonment on April 1.

More:PRC unanimously approves PNM ending operations of San Juan following meeting interruption

Utilities are required to file abandonment applications when they are no longer going to use an asset like a generating station. The term abandonment does not necessarily mean that the power plant will close.

In PNM’s case, it means the company will end its operation of the San Juan Generating Station in the summer of 2022 and will no longer receive electricity from the power plant.

In its ruling, the state Supreme Court stated that state law “neither expressly establishes nor implies that the Commission has the authority to order a public utility to begin abandonment proceedings.”

More:PNM accuses PRC of using docket as a political weapon to block new energy policies

At the same time, the court expressed appreciation of the PRC’s commitment to "guarding public interest and ensuring proper safeguards."

The San Juan Generating Station is seen, Friday, Nov. 9, 2018, from Twin Peaks in Kirtland.

"While those interests are sound, we nevertheless reiterate that the Legislature has not conferred upon the Commission the authority to initiate an abandonment proceeding as an avenue to ensure compliance with Commission directives," the court stated.

The court ruled it would've been proper for the PRC to ask the state attorney general to seek an injunction from the district court. This injunction could have compelled PNM to file an application to abandon the San Juan Generating Station.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.

Support local journalism with a digital subscription: http://bit.ly/2I6TU0e