PRC orders PNM to answer group's coal complaint
FARMINGTON — State public regulators are requiring the state's largest utility to answer a complaint by a Santa Fe-based environmental group over the financing of the sale of a Waterflow coal mine that the group says could cost New Mexico ratepayers.
The San Juan Mine was owned and operated by BHP Billiton New Mexico Coal until Feb. 1, when it sold the mine for about $127 million to Westmoreland San Juan, a subsidiary of Westmoreland Coal Company. PNM Resources, the parent company of Public Service Company of New Mexico, financed a $125 million loan to Westmoreland so the company could buy the mine.
New Energy Economy Executive Director Mariel Nanasi said in the group's complaint against New Mexico Public Service Company that Westmoreland's debt made the loan for the mine purchase a risky gamble that could leave New Mexican ratepayers on the hook if the company defaults on its loan.
The New Mexico Public Regulation Commission agreed in a 5-0 vote on Wednesday that PNM must answer the complaint in 20 days. After an answer is received, the PRC will decide if there is probable cause to initiate an investigation.
New Energy Economy's filing asked that the PRC "investigate whether any of the (mine purchase) transactions, considered serparately or together, could adversely affect PNM's ability to provide retail electric service to the public at just and reasonable rates so that information is available to them in a timely manner."
In a separate case pending before the PRC, the utility is requesting approval of a 15.8 percent electrical rate hike.
Jodi McGinnis Porter, PNM spokeswoman, said in an emailed statement that the utility did nothing wrong.
“We followed the rules, promptly notified the (PRC) of the transaction and have been transparent throughout the process," she said. "This was a transaction outside of the utility, which was not required to be reported to the commission. Westmoreland's acquisition of the San Juan Coal Company (was done) in a timely manner for PNM customers to benefit from the savings of a new coal agreement.”
James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621.