PNM Resources : DIRECT TESTIMONY OF HENRY E. MONROY IN RESPONSE TO APRIL 1, 2022 PROCEDURAL ORDER

BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSIONIN THE MATTER OF PUBLIC SERVICE COMPANY OF NEW MEXICO'S ABANDONMENT OF SAN JUAN GENERATING STATION UNITS 1 AND 4

) ) ) )

Case No. 19-00018-UTDIRECT TESTIMONY OF HENRY E. MONROY

IN RESPONSE TO APRIL 1, 2022 PROCEDURAL ORDERApril 20, 2022

INDEX TO THE DIRECT TESTIMONY OF HENRY E. MONROY

IN RESPONSE TO APRIL 1, 2022 PROCEDURAL ORDER

NMPRC CASE NO. 19-00018-UT

WITNESS FOR

PUBLIC SERVICE COMPANY OF NEW MEXICO

• I. INTRODUCTION AND PURPOSE ...................................................................... 1

• II. PNM'S POSITIONS ON MATTERS AT ISSUE .................................................. 3

• A. PNM Has Fully Complied with the Financing Order and the ETA ........................ 7

• B. Customers Have Benefitted From the Delay of PNM's Rate Cases ..................... 10

• C. There Will Be No Double Recovery by PNM ...................................................... 19

• D. There Is No Proper Basis to Single Out San Juan Expenses for Elimination from

  Rates Outside of a General Rate Case . ................................................................. 24

E. There Is No Delay in Funding Employee Severance Benefits or State Agencies. 31

III. RESPONSES TO QUESTIONS IN PROCEDURAL ORDER ........................... 32

IV. CONCLUSION ..................................................................................................... 44

EXHIBITS:

PNM Exhibit HEM-1 (April 20, 2022)

PNM Exhibit HEM-2 (April 20, 2022)

PNM Exhibit HEM-3 (April 20, 2022)

PNM Exhibit HEM-4 (April 20, 2022)

PNM Exhibit HEM-5 (April 20, 2022)

PNM Exhibit HEM-6 (April 20, 2022)

PNM Exhibit HEM-7 (April 20, 2022)

PNM Exhibit HEM-8 (April 20, 2022)

PNM Exhibit HEM-9 (April 20, 2022)

PNM Exhibit HEM-10 (April 20, 2022)

PNM Exhibit HEM-11 (April 20, 2022) Confidential PNM Exhibit HEM-12 (April

20, 2022)

PNM Exhibit HEM-13 (April 20, 2022) Confidential PNM Exhibit HEM-14 (April

20, 2022)

PNM Exhibit HEM-15 (April 20, 2022)Resume of Henry E. Monroy

SJGS Non-Fuel Revenue Requirement 16-00276-UT Record Citations in 19-00018-UT

SJGS Non-Fuel Revenue Requirement 2022-2023 Upfront Energy Transition Costs

• 2019 FPPCAC Annual Reconciliation Report

• 2020 FPPCAC Annual Reconciliation Report

• 2021 FPPCAC Annual Reconciliation Report

Estimated 2022 FPPCAC

Estimated 2023 FPPCAC

PNM 2021 Income Statement 10-K

PNM 2022 Q1 Income Statement (Confidential) PNM Balance Sheet at 12-31-2021 10-K

PNM Balance Sheet at 3-31-2022 (Confidential) PNM 2021 Earnings Test

i

Confidential PNM Exhibit HEM-16 (April 20, 2022)

PNM Exhibit HEM-17 (April 20, 2022)AFFIRMATIONPNM 2022 Q1 ROE (Confidential)

SJGS Units 2&3 Non-Fuel Revenue Requirementii

DIRECT TESTIMONY OF HENRY E. MONROY

IN RESPONSE TO APRIL 1, 2022 PROCEDURAL ORDER

NMPRC CASE NO. 19-00018-UT

1
2	Q.	PLEASE STATE YOUR NAME, POSITION AND BUSINESS ADDRESS.
3	A.	My name is Henry E. Monroy. I am employed by PNMR Services Company as
4	Vice President, Corporate Controller for PNM Resources, Inc. ("PNMR"), and its
5	subsidiaries including Public Service Company of New Mexico ("PNM") and
6	Texas-New Mexico Power ("TNMP"). My business address is Public Service
7	Company of New Mexico, 414 Silver SW, Mail Stop 1015, Albuquerque, NM
8	87102.
9
10	Q.	HAVE YOU FILED PRIOR TESTIMONY IN THIS PROCEEDING?
11	A.	Yes. I filed Direct Testimony in support of PNM's Application on July 1, 2019. I
12	also filed Direct Errata Testimony on September 20, 2019, and Rebuttal Testimony
13	on November 15, 2019.
14
15	Q.	HAS YOUR EMPLOYMENT POSITION CHANGED SINCE YOU LAST
16	FILED TESTIMONY IN THIS CASE?
17	A.	Yes. Previously I served as the Controller, Utility Operations. Effective January
18	2020, I was promoted to my current position as Vice President and Corporate
19	Controller. As Vice President and Corporate Controller, I am responsible for all
20	the accounting, budgeting, cost of service and tax functions for PNMR, PNM and
21	TNMP. I have included an updated resume as PNM Exhibit HEM-1 (April 20,
22	2022).

I.

INTRODUCTION AND PURPOSE

1

DIRECT TESTIMONY OF HENRY E. MONROY

IN RESPONSE TO APRIL 1, 2022 PROCEDURAL ORDER

NMPRC CASE NO. 19-00018-UT

1
2	Q.	WHAT IS YOUR EXPERIENCE WITH RESPECT TO UTILITY
3	RATEMAKING PRINCIPLES?
4	A.	My experience in utility ratemaking is set out in my resume attached as PNM
5	Exhibit HEM-1 (April 20, 2022). I have been involved in the cost of service aspects
6	of the utility operations of both PNM and TNMP since 2009. I was PNM's cost of
7	service expert in both PNM's 2015 rate case, Case No. 15-00261-UT, and PNM's
8	2016 rate case, Case No. 16-00276-UT. I served as the cost of service expert for
9	TNMP in its last general rate case in Docket No 48401 before the Public Utility
10	Commission of Texas. I also served as the cost of service expert in establishing the
11	implementation of transmission formula rates at the Federal Energy Regulatory
12	Commission. Based on this experience I am very familiar with utility ratemaking
13	principles which I discuss later in my testimony.
14
15	Q.	WHAT IS THE PURPOSE OF YOUR TESTIMONY?
16	A.	The overall purpose of my testimony is to respond to the Hearing Examiners' April
17	1, 2022 Procedural Order ("Procedural Order"), which implements the Order
18	Appointing Hearing Examiners on Joint Motion for Order to Show Cause and
19	Enforce Financing Order issued by the New Mexico Public Regulation
20	Commission ("Commission") on March 30, 2022. In furtherance of that purpose,
21	my testimony includes the following: (1) introductions of the other witnesses
22	providing testimony on behalf of PNM; (2) descriptions of and factual support for
23	PNM's positions with respect to the matters presently at issue in this proceeding;
2