PNM Resources : NEE

Filed

Supreme Court of New Mexico

5/9/2022 12:17 PM

Office of the Clerk

IN THE SUPREME COURT OF THE STATE OF NEW MEXICO

NO. S-1-SC-39138

PUBLIC SERVICE COMPANY OF NEW MEXICO,

Appellant,

v.

NEW MEXICO PUBLIC REGULATION COMMISSION,

Appellee, and

SIERRA CLUB,

NEW ENERGY ECONOMY,

WESTERN RESOURCE ADVOCATES and

COALITION FOR CLEAN AFFORDABLE ENERGY,

Intervenors-Appellees.

In the Matter of the Application of Public Service Company of New Mexico for Approval of the Abandonment of the Four Corners Power Plant and Issuance of a Securitized Financing Order, NMPRC Case No. 21-00017-UT

ANSWER BRIEF OF

INTERVENER-APPELLEE OF

NEW ENERGY ECONOMY'S TO APPELLANTS' BRIEF-IN-CHIEF

John W. Boyd, Esq.	Mariel Nanasi, Esq.
FREEDMAN BOYD HOLLANDER	300 East Marcy St.
& GOLDBERG, P.A.	Santa Fe, NM 87501
20 First Plaza, Suite 700	[phone]
Albuquerque, NM 87102
[phone]

Attorneys for Intervener/Appellee New Energy Economy

May 9, 2022

TABLE OF CONTENTS
I. INTRODUCTION ...........................................................................................	1
II. SUMMARY OF THE PROCEEDINGS ........................................................	5
A. NATURE OF THE CASE AND COURSE OF PROCEEDINGS.....................................	5
B. FACTS NECESSARY TO AN UNDERSTANDING OF THE ISSUES ON APPEAL..........	7
III. APPLICABLE LEGAL STANDARDS .........................................................	9
IV. ARGUMENT..................................................................................................	11

1. THE COMMISSION CORRECTLY REJECTED PNM'S APPLICATION BECAUSE IT

FAILED TO MEET THE LEGAL STANDARD FOR ABANDONMENT ............................

11

1. PNM's abandonment and sale to NTEC under the PUC, NMSA 1978 §62- 9-5, and under the Commuters' Committee case fails the net public benefit test.

…………………………………………………………………………... 12

1. The "sale" of coal plants is forbidden by the ETA; the continued burning

of coal is a net public detriment. ..................................................................	12
b. Abandonment fails to meet the Commuters' Committee standards. .....	15

2. The Commission reasonably demanded proof of the availability of cost competitive and reliable replacement power resources before it approved FCPP abandonment; Had PNM fulfilled its prior obligation to provide a quantitative resource analysis, it would have had the requisite evidence to meet its burden.21

1. Evidence below showed that the reason for PNM's rush to abandonment without a replacement resources plan was to comply with a condition

precedent in the PNM/Avangrid merger. .....................................................

23

1. THE PRC ORDERED THAT UNRESOLVED PRUDENCE INVESTMENT ISSUES BE ADDRESSED IN THE CONTINUATION OF THIS PROCEEDING OR SUBSEQUENT

PROCEEDING.........................................................................................................

24

1. The Prudence Issue is Not Final Therefore Not Ripe for Review; This Court Should Remand for the PRC to Decide Prudence Based on the Evidentiary

Record in 16-00276-UT and 21-00017-UT .....................................................	24
2. PNM's Argument that the ETA Precludes A Prudence Review is Faulty and
Would Result in Grave Injustice......................................................................	27

1. A short history of the commission's requirement for a prudence review.
   …………………………………………………………………………29
2. The ETA does not preclude a prudence review; PNM's interpretation

would raise constitutional concerns..............................................................

33

1. The plain language of 62-18-2(H)(2)(c) does not prohibit a prudence

review for purposes of imposing a disallowance of imprudent costs...........

42

i

d. Res Judicata does not bar a prudence inquiry into PNM's continued
participation in FCPP. ..................................................................................	43

1. PNM's Expert's Hindsight Review in 21-00017-UT of the Evidence
   Proffered in 16-00276-UT was that PNM's Analysis was "Inadequate.".... 46
2. PNM's Abandonment Application was Denied In Part Because the Commission Didn't Want to Include in Securitization Potentially Imprudent

Costs. ............................................................................................................	48
V. CONCLUSION ..............................................................................................	50

ii

TABLE OF AUTHORITIES
NEW MEXICO CONSTITUTION
Art. II, §19 -----------------------------------------------------------------------------------	41
Art. IV, §34 -----------------------------------------------------------------------------------	3
Art. XI, § 2-----------------------------------------------------------------------------------	28
NEW MEXICO CASES
Albuquerque Bernalillo County Water Util. Auth. v. N.M. Pub. Regulation
Comm'n, 2010-NMSC-013, 148 N.M. 21 -----------------------------------	10, 22, 41
Am. Fed'n of State, Cnty. & Mun. Emps. v. Bd. of Cnty. Comm'rs of Bernalillo
Cnty., 2016-NMSC-017 -----------------------------------------------------------------	25
Chatterjee v. King, 2012-NMSC-019, 280 P.3d 283-----------------------------------	40
Citizens for Fair Rates & the Env't v. N.M. Pub. Regulation Comm'n, 2022-
NMSC-010--------------------------------------------------------------------------	passim
DeWitt v. Rent-A-Center,Inc., 2009-NMSC-032, 146 N.M. 453 --------------------	10
Helman v. Gallegos, 1994-NMSC-023--------------------------------------------------	42
In re Petition of PNM Gas Servs., 2000-NMSC-012, 129 N.M. 1, 1 P.3d 383,
405 (N.M. 2000)--------------------------------------------------------------------------	46
Jones v. United Minerals Corp., 1979-NMSC-103, 93 N.M. 706, 604 P.2d 1240 40
N.M. Indus. Energy Consumers v. N.M. Pub. Regulation. Comm'n, 2007-NMSC-
053, 142 N.M. 533 -----------------------------------------------------------------------	10
New Energy Econ., Inc. v. N.M. Pub. Regul. Comm'n, 2018-NMSC-024,
416 P.3d 277 ---------------------------------------------------------------------	10, 12, 18
Pub. Serv. Co. of New Mexico v. New Mexico Pub. Regulation Comm'n,
2019-NMSC-012, 444 P.3d 460--------------------------------------------------	passim
Regents of Univ. of N.M. v. N.M. Federation of Teachers, 1998-NMSC-020,
125 N.M. 401, 962 P.2d 1236 (N.M. 1998) ------------------------------------------	42
State ex rel. Egolf v. N.M. Pub. Regulation Comm'n, ("Egolf") 2020-NMSC-018
-------------------------------------------------------------------------------------------	3, 37
State v. Pangaea Cinema LLC, 2013-NMSC-044, 310 P.3d 604 --------------------	40
State v. Zamarripa, 2009-NMSC-001, 145 N.M. 402, 199 P.3d 846 ----------------	45
NEW MEXICO SUPREME COURT CASES
S-1-SC-36870-------------------------------------------------------------------------------	31
S-1-SC-37552---------------------------------------------------------------------------	15,44
CASES FROM OTHER JURISDICTIONS
Commuters' Committee v. Pennsylvania PUC, 170 Pa. Super. 596 (1952)	-- passim
	iii

NEW MEXICO REGULATORY CASES
NMPRC Case No. 13-00390-UT------------------------------------------------------	8, 17
NMPRC Case No. 15-00261-UT----------------------------------------------------	18, 46
NMPRC Case No. 16-00276-UT---------------------------------------------------	passim
NMPRC Case No. 19-00018-UT------------------------------------------------------	3, 12
NMPRC Case No. 19-00102-UT---------------------------------------------------------	18
NMPRC Case No. 19-00195-UT-------------------------------------------------	8, 14, 18
NMPRC Case No. 19-00349-UT---------------------------------------------------------	14
NMPRC Case No. 20-00182-UT---------------------------------------------------------	20
NMPRC Case No. 21-00017-UT---------------------------------------------------	passim
NMPRC Case No. 21-00083-UT------------------------------------------------------	8, 18
NMPRC Case No. 21-00260-UT---------------------------------------------------------	20
NMPRC Case No. 2296--------------------------------------------------------------------	15
REGULATORY CASES FROM OTHER JURISDICTIONS
Investigation into Vermont Elec. Utilities' Use of Smart Metering & Time-Based
Rates, 2009 WL 4024900 ---------------------------------------------------------------	45
NEW MEXICO STATUTES AND RULES
NMRA 12-318(A)(3)------------------------------------------------------------------------	5
NMSA 1978, §62-11-4----------------------------------------------------------------------	9
NMSA 1978, §62-16.4.B(4)----------------------------------------------------	2, 4, 13, 14
NMSA 1978, §62-16-4 B ------------------------------------------------------------------	18
NMSA 1978, §62-16-4 G(3)(a) -----------------------------------------------------------	18
NMSA 1978, §62-16-4.A (5) --------------------------------------------------------------	13
NMSA 1978, §62-16-4.A (6) --------------------------------------------------------------	13
NMSA 1978, §62-18-1, et seq ------------------------------------------------------	passim
NMSA 1978, §62-18-2(H)(2)(c)--------------------------------------------	33, 34, 36, 42
NMSA 1978, §62-18-3----------------------------------------------------------------	18, 19
NMSA 1978, §62-18-4----------------------------------------------------------	4, 8, 19, 50
NMSA 1978, §62-18-4(B)(10)-------------------------------------------------------	39, 42
NMSA 1978, §62-18-4(D)--------------------------------------------------------------	6, 49
NMSA 1978, §62-18-5(E)-----------------------------------------------------------------	11
NMSA 1978, §62-18-5(F)(8)--------------------------------------------------------------	39
NMSA 1978, §62-2-1 et seq---------------------------------------------------------	passim
NMSA 1978, §62-3-1----------------------------------------------------------------------	41
NMSA 1978, §62-3-1(B)-------------------------------------------------------------	37, 49
NMSA 1978, §62-3-1(B) ------------------------------------------------------------------	22
NMSA 1978, §62-3-2B--------------------------------------------------------------------	37
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