PNM Resources : Direct Testimony of Stella Chan - Rate design and proposed tariff.

BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION

IN THE MATTER OF PUBLIC SERVICE COMPANY OF	)
NEW MEXICO'S APPLICATION FOR AUTHORIZATION )
TO IMPLEMENT GRID MODERNIZATION	)
COMPONENTS THAT INCLUDE ADVANCED	) Case No. 22-00058-UT
METERING INFRASTRUCTURE AND APPLICATION	)
TO RECOVER THE ASSOCIATED COSTS THROUGH	)
A RIDER, ISSUANCE OF RELATED ACCOUNTING	)
ORDERS, AND OTHER ASSOCIATED RELIEF	)

_______________________________________________________

DIRECT TESTIMONY

OF

STELLA CHAN

October 3, 2022

NMPRC CASE NO. 22-00058-UT

INDEX TO THE DIRECT TESTIMONY OF

STELLA CHAN

WITNESS FOR

PUBLIC SERVICE COMPANY OF NEW MEXICO

I.	INTRODUCTION AND PURPOSE ......................................................................	1
II.	GRID MODERNIZATION RIDER .......................................................................	2
III.	OPT-OUT FEE .......................................................................................................	8
IV.	CUSTOMER IMPACTS OF THE GRID MODERNIZATION RIDER .............	10
V.	CUSTOMER BENEFITS OF AMI AS IT RELATES TO RATE DESIGN .......	13
VI.	CONCLUSION.....................................................................................................	15

PNM Exhibit SC-1	Resume
PNM Exhibit SC-2	Original Grid Modernization Rider
PNM Exhibit SC-3	Grid Modernization Rider Functional Allocators
PNM Exhibit SC-4	Proposed Monthly GMR Charge by Year
PNM Exhibit SC-5	GMR Bill Impacts
Self-Verification

i

DIRECT TESTIMONY

OF STELLA CHAN

NMPRC CASE NO. 22-00058-UT

1	I. INTRODUCTION AND PURPOSE

1. Q. PLEASE STATE YOUR NAME, POSITION AND BUSINESS ADDRESS.
2. A. My name is Stella Chan. I am the Director of Pricing for Public Service Company
3. of New Mexico ("PNM" or "Company"). My business address is 414 Silver
4. Avenue SW, Albuquerque, NM 87102.

6

1. Q. PLEASE SUMMARIZE YOUR EDUCATIONAL BACKGROUND AND
2. PROFESSIONAL QUALIFICATIONS.
3. A. Please see PNM Exhibit SC-1 for my educational background and professional
4. qualifications.

11

12 Q. HAVE YOU PREVIOUSLY TESTIFIED BEFORE THE NEW MEXICO

13 PUBLIC REGULATION COMMISSION ("NMPRC" OR

1. "COMMISSION")?
2. A. Yes. A list of cases in which I have filed testimony is included in PNM Exhibit
3. SC-1.

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1. Q. WHAT IS THE PURPOSE OF YOUR DIRECT TESTIMONY?
2. A. The purpose of my testimony is: 1) to describe the derivation, including a
3. discussion on allocation, and applicability of the proposed Grid Modernization
4. Rider ("GMR"), which recovers grid modernization capital costs and expenses;
5. 2) to support the one-time and monthly fees that customers will be charged for

1

DIRECT TESTIMONY

OF STELLA CHAN

NMPRC CASE NO. 22-00058-UT

1. opting out of advanced metering infrastructure ("Opt-Out fees"); 3) to identify the
2. bill impacts of the GMR on customers including low-income customers; and 4) to
3. describe the benefits that the collection of interval meter data from advanced
4. metering infrastructure ("AMI") will bring to modern rate design.

5		II. GRID MODERNIZATION RIDER
6
7	Q.	IS PNM PROPOSING A NEW RIDER TO RECOVER GRID

1. MODERNIZATION COSTS?
2. A. Yes. PNM is proposing a Grid Modernization Rider ("GMR") in accordance with
3. NMSA 1978, § 62-8-13(C) (2021). See PNM Exhibit SC-2. PNM has not filed an
4. advice notice at this time to implement the GMR. Once the Commission approves
5. PNM's application in this proceeding, PNM will file an advice notice to implement
6. the GMR.

14

1. Q. WHAT COSTS WILL BE INCLUDED FOR RECOVERY THROUGH THIS
2. PROPOSED NEW RIDER?
3. A. As described by PNM witness Kyle Sanders in his testimony, nine separate projects
4. are included in the revenue requirement calculation. The nine separate projects in
5. the revenue requirement include: an Advanced Distribution Management System

20	("ADMS"), Advanced Metering, Customer Information & Analytics,
21	Cybersecurity, Data Management and Architecture, Distribution Planning and

2

DIRECT TESTIMONY

OF STELLA CHAN

NMPRC CASE NO. 22-00058-UT

1 Engineering, Distribution Automation, Telecommunications, and Program

1. Oversight.

1. Q. HOW WAS THE REVENUE REQUIREMENT USED TO DEVELOP THE
2. CHARGES?
3. A. PNM recommends using the total year 1 revenue requirement for all nine projects
4. to develop the charges in the GMR. The charge reflects the comprehensive
5. approach being taken by PNM for grid modernization pursuant to NMSA 1978,
6. Section 62-8-13.

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1. Q. HOW ARE GRID MODERNIZATION COSTS ALLOCATED?
2. A. PNM proposes to use the last Commission-approved methodology for allocating
3. distribution and customer costs according to the purpose, function, and benefit of
4. the grid modernization investments. For functionalization, PNM will use the most
5. recent allocators as filed in Case No. 16-00276-UT, which were based on an
6. approved allocation methodology from Case No. 15-00261-UT. After PNM
7. allocates by purpose, function, and benefit, it will then allocate to each customer
8. class. For the customer class allocation, PNM will use the most recent class
9. allocators as filed in Case No. 16-00276-UT, which were based on an approved
10. allocation methodology from Case No. 15-00261-UT. In the annual review and
11. reconciliation process, as discussed below, PNM will update the allocations to
12. reflect any new Commission-approved methodology and allocators from a

3