PNM Resources : June 25, 2021 Supplemental Testimony

BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION

IN THE MATTER OF THE APPLICATION	)
OF PUBLIC SERVICE COMPANY OF NEW	)
MEXICO FOR DECERTIFICATION AND	)
ABANDONMENT OF 114MW OF LEASED	)
PALO VERDE NUCLEAR GENERATING	)
STATION CAPACITY AND SALE AND	)
TRANSFER OF RELATED ASSETS	)
AND FOR APPROVAL TO PROCURE	)	Case No. 21-00083-UT
NEW RESOURCES UNDER 17.9.551 NMAC	)
	)
PUBLIC SERVICE COMPANY OF NEW	)
MEXICO,	)
	)
Applicant.	)

__________________________________________)

JUNE 25, 2021 SUPPLEMENTAL TESTIMONY

OF

LAURA E. SANCHEZ

JUNE 25, 2021 SUPPLEMENTAL TESTIMONY

OF LAURA E. SANCHEZ

NMPRC CASE NO. 21-00083-UT

1. Q. PLEASE STATE YOUR NAME, POSITION AND BUSINESS ADDRESS.
2. A. My name is Laura E. Sanchez. I am the Chief Policy and Legal Advisor for PNM
3. Resources, Inc. ("PNMR") and am employed by PNMR Services Company

4	("PNMR Service"). My business address is 414 Silver Avenue SW, Albuquerque,
5	New Mexico 87102.
6

7 Q. WHAT ARE YOUR RESPONSIBILITIES AS CHIEF POLICY AND

8	LEGAL ADVISOR FOR PNMR SERVICE?

1. A. As Chief Policy & Legal Advisor, I am responsible for the oversight, development,
2. and implementation of regulatory policies and strategy that support PNMR's

11	overall operational strategy and functions. I help identify public policy priorities
12	and help shape the Company's public policy and regulatory agenda. I assist in
13	addressing public policy challenges by ensuring appropriate internal and external
14	stakeholders are involved. I serve as the senior adviser on public policy and
15	research to the Senior Vice President for Public Policy. I also conduct research and
16	analysis on public policy, legislative and regulatory matters.
17
18	A further statement of my experience and qualifications, including a list of the New
19	Mexico Public Regulation Commission ("NMPRC" or "Commission")
20	proceedings in which I have participated, is attached as PNM Exhibit LES-1(June
21	25, 2021 Supplemental).
22
	1

JUNE 25, 2021 SUPPLEMENTAL TESTIMONY

OF LAURA E. SANCHEZ

NMPRC CASE NO. 21-00083-UT

1

2 Q. HAVE YOU PREVIOUSLY PROVIDED TESTIMONY IN THIS CASE, OR

3		IN OTHER CASES BEFORE THE NEW MEXICO PUBLIC REGULATION
4		COMMISSION?
5	A.	I have not provided testimony previously in this case. I provided direct testimony
6		on behalf of PNM in Case No. 21-00017-UT regarding PNM's request for approval
7		of abandonment of PNM's interest in the Four Corners Power Plant which included
8		addressing requested approvals pursuant to the Energy Transition Act ("ETA"), and
9		explaining the benefits of the ETA and securitization.

10

1. Q. WHAT DOES YOUR SUPPLEMENTAL TESTIMONY ADDRESS?
2. A. My testimony will address certain requirements of the May 11, 2021 Revised

13	Procedural Order. Specifically, I address Ordering Paragraphs E.2; 3; 4; 5; 6 (a)
14	and 7(a).
15

16 Q. WHAT OTHER WITNESSES ARE ANSWERING THE QUESTIONS

17		CONTAINED IN THE REVISED PROCEDURAL ORDER?
18	A.	The other witnesses answering questions in the Revised Procedural Order are listed
19		in the attached PNM Exhibit LES-2(June 25, 2021 Supplemental).
20

21 Q. AS STATED IN ORDERING PARAGRAPH E.2, WHY DOES PNM NEED

22COMMISSION APPROVAL TO ABANDON ITS LEASED PVNGS

23INTERESTS WHEN PNM HAS ALREADY GIVEN IRREVOCABLE

2

		JUNE 25, 2021 SUPPLEMENTAL TESTIMONY
		OF LAURA E. SANCHEZ
		NMPRC CASE NO. 21-00083-UT
1		NOTICE TO THE PVNGS LESSORS OF ITS DECISION TO RETURN THE
2		LEASED INTERESTS?
3	A.	This issue is addressed in the Direct Testimony of PNM Witness Mark Fenton at
4		pages 14 through 15. Because the Commission approved the terms of the PVNGS
5		sale and leaseback agreements which provide that PNM can allow the leases to
6		expire according to their terms and the leased assets revert to the lessors, arguably
7		abandonment approval is not required. PNM is seeking abandonment approval out
8		of an abundance of caution because the Leased Interests are included in the
9		Certificate of Public Convenience and Necessity ("CCN") issued by the
10		Commission for all of PNM's PVNGS owned and leased capacity and it makes
11		sense for the Leased Interests to be decertified. As noted in the Direct Testimony
12		of Mr. Fenton, if abandonment approval is not required, the issue of abandonment
13		and decertification can be summarily determined. In any case, PNM has presented
14		substantial evidence that satisfies the applicable abandonment standard under
15		NMSA 1978, Section 62-9-5 and the Commuters Committee factors.
16
17	Q.	AS STATED IN ORDERING PARAGRAPH E.3, DOES THE
18		COMMISSION HAVE THE AUTHORITY TO DENY PNM'S REQUEST
19		TO ABANDON ITS LEASED PVNGS INTERESTS (IF SUCH APPROVAL
20		IS REQUIRED), WHEN PNM HAS ALREADY GIVEN IRREVOCABLE
21		NOTICE TO THE PVNGS LESSORS OF ITS DECISION TO RETURN THE
22		LEASED INTERESTS?

3

JUNE 25, 2021 SUPPLEMENTAL TESTIMONY

OF LAURA E. SANCHEZ

NMPRC CASE NO. 21-00083-UT

1 A. No, because that would appear to contravene the Commission's approval of the

2	notice and return provisions under the Leases.	This is also consistent with the
3	Commission's decision in Case No. 15-00261-UT that PNM did not need
4	Commission authorization to purchase other leased interests. This is why PNM has
5	sought abandonment approval only to the extent the Commission deems it
6	necessary, along with decertification of the Leased Interests. The Commission
7	previously approved the sale-leaseback transactions in Case No. 1995 and Case No.
8	2019, Phase I, including the provision providing for an irrevocable notice of the
9	return of the Leased Interests to the Lessors.	Thus, approval of the irrevocable
10	notice was previously granted by the Commission. However, the 114 MW to be
11	returned to the Lessors is part of the PVNGS interest of 402 MW that are covered
12	by a CCN. As certificated resources, it appears that the appropriate process for
13	decertification would be through an abandonment application.
14

15 Q. REFERRING TO CASE NO. 15-00261-UT, ORDERING PARAGRAPH E.4

16		ASKS "WHY DOES PNM NEED COMMISSION APPROVAL TO SELL
17		THE PVNGS ASSETS WHEN PNM DOES NOT OWN THESE ASSETS?"
18	A.	PNM is not seeking Commission approval to sell or transfer the Leased Interests.
19		However, the related PVNGS Assets which are associated with the leased capacity
20		are owned by PNM and are necessary to this transaction. The original 1985 and
21		1986 Lease documents require that PNM fully cooperate with the Lessors in any
22		transfer of the Leased Interests to a third party. The Lessors' efforts to sell the
23		Leased Interests requires the transfer of related PVNGS Assets owned by PNM to
		4