BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION

IN THE MATTER OF THE PETITION OF PUBLIC

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SERVICE COMPANY OF NEW MEXICO, PURSUANT TO

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THE EFFICIENT USE OF ENERGY ACT AND THE PUBLIC

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UTILITY ACT, FOR APPROVAL OF A RATE

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Case No. 20-00121-UT

ADJUSTMENT MECHANISM TO REMOVE

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REGULATORY DISINCENTIVES AND ORIGINAL RIDER

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NO. 52

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IN THE MATTER OF THE PETITION OF ALBUQUERQUE

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BERNALILLO COUNTY WATER UTILITY AUTHORITY

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AND BERNALILLO COUNTY FOR A DECLARATORY

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ORDER REGARDING WHETHER THE EFFICIENT USE

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Case No. 20-00211-UT

OF ENERGY ACT MANDATES THE COMMISSION TO

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FULLY AUTHORIZE FULL DECOUPLING UPON

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PETITION BY A PUBLIC UTILITY

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IN THE MATTER OF PUBLIC SERVICE COMPANY OF

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NEW MEXICO'S PETITION FOR A DECLARATORY

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ORDER REGARDING WHETHER THE EFFICIENT USE

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Case No. 20-00212-UT

OF ENERGY ACT PERMITS A UTILITY TO IMPLEMENT

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A FULL REVENUE DECOUPLING MECHANISM

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ORDER

THIS MATTER comes before the New Mexico Public Regulation Commission (the

"Commission") on the May 28, 2020 Petition of Public Service Company of New Mexico

(PNM) for Approval of a Rate Adjustment Mechanism to Remove Regulatory Disincentives and Original Rider No. 52 (Case 20-00121-UT); PNM's Petition for Declaratory Order

Regarding Whether the Efficient Use of Energy Act Permits A Utility to Implement a Full

Revenue Decoupling Mechanism (Case 20-00211-UT) and the Joint Petition for Declaratory Order

Regarding Whether the Efficient Use of Energy Act Mandates the Commission to Fully Authorize

Full Decoupling Upon a Petition by a Public Utility (Case 20-00212) filed by Bernalillo County and the Albuquerque Bernalillo Water Utility Authority (ABCWUA). Whereupon, being duly

informed, THE COMMISSION FINDS AND CONCLUDES:

1. PNM's May 28, 2020 Petition in 20-00121-UT proposed a decoupling rate design pursuant to NMSA 1978, Section 62-17-5 which requires the Commission, on petition by a utility, to "remove regulatory disincentives through the adoption of a rate adjustment mechanism that ensures that the revenue per customer approved by the commission in a general rate case proceeding is recovered by the public utility without regard to the quantity of electricity actually sold by the public utility subsequent to the date the rate took effect."

2. By Initial Order dated June 10, 2020, the Commission commenced a proceeding on

PNM's Petition and assigned Anthony Medeiros as Hearing Examiner (HE).

3. On July 13, 2020, New Energy Economy (NEE) filed a Motion to Dismiss the

Petition. A separate Joint Motion to Dismiss was also filed that same day by the ABCWUA, the

City of Albuquerque and the County of Bernalillo. Both motions assert, among other arguments, that PNM's Petition violates regulatory principles barring piecemeal and retroactive rate making and PNM's proposal to increase rates on only residential rate payers and small power users would be unjust during the COVID crisis. The motions further assert PNM's Petition seeking full revenue decoupling is contrary to NMSA 1978, Section 62-17-5(F)(2) which only authorizes decoupling mechanisms dedicated to removing disincentives attributable to utility implementation of energy efficiency and load management programs and addressing decreased utility revenue specifically tied to such programs.

4. On August 7, 2020, PNM filed a Consolidated Response in opposition to the motions to dismiss. Intervenors Western Resources Advocates (WRA) and Coalition for Clean

Affordable Energy (CCAE) filed a joint response in opposition to the motions to dismiss.

Intervenor Merrie Lee Soules filed a response in support of the motions to dismiss.

5. On October 2, 2020, prior to the hearing on PNM's Petition scheduled for October

13 and 14, 2020, PNM filed a Motion to Vacate Hearing and Stay Proceeding in Case No. 20-

00121-UT. PNM proposed to stay the proceeding until the Commission decided whether it would entertain a petition for declaratory order to resolve legal issues that had arisen in the case concerning whether Section 62-17-5(F)(2) permits full revenue decoupling or only authorizes decoupling mechanisms specific to removing disincentives limited to utility implementation of energy efficiency and load management programs, and addressing decreased utility revenue specifically tied to such programs.

6. PNM's motion proposed that a "declaratory order proceeding could also resolve other disputed legal issues that have arisen in this case, including whether a decoupling mechanism under Section 62-17-5(F)(2) may apply to some, but not all, of a utility's customer classes, and whether the Commission may consider an adjustment to a utility's return on equity if it approves a decoupling mechanism pursuant to Section 62-17-5(F)(2).

7. PNM noted that the issue of whether Section 62-17-5(F)(2) allows for full revenue decoupling "is virtually certain to arise in any future rate case proceeding…unless it is resolved in advance of that future rate case filing." PNM further argued "Staying this proceeding while the

Commission decides whether to entertain these threshold issues will conserve parties' resources and avoid the need for duplicate work in multiple dockets" and "allow the parties to focus on the specifics of any decoupling mechanism PNM might propose" in a future rate case.

8. PNM's motion stated that while it PNM disagrees that Section 62-17-5(F)(2)

requires that requests for full revenue decoupling must be presented only in general rate case proceedings, PNM says it is willing it was willing to "consider returning to this issue in its next general rate case, which it expects to file by the summer of 2021" and dismiss its pending Petition if the Commission decides to entertain "a petition for declaratory order pursuant to 1.2.2.21

NMAC, requesting a legal determination from the Commission as to whether Section 62-17-5(F)(2) does, or does not, provide for full revenue decoupling."

9. PNM further stated that "In the event the Commission decides to not entertain the petition, PNM will make a filing in this docket within ten days indicating whether it intends to continue with its Petition and, if so, proposing a new procedural schedule."

10. Initially, PNM's motion was not opposed by Utility Division Staff (Staff), the New

Mexico Attorney General (NMAG), the Coalition for Clean Affordable Energy (CCAE), and

Western Resource Advocates (WRA). Renewable Energy Industry Association of New Mexico

(REIA), Bernalillo County, Albuquerque Bernalillo County Water Utility Authority (ABCWUA),

the City of Albuquerque, and the New Mexico Affordable Reliable Energy Alliance (NM-AREA)

took no position. New Energy Economy opposed the motion.

11. In subsequent filings, NM-AREA filed in support of PNM's Motion to Vacate. The

County of Bernalillo, ABCWUA and NEE opposed the motion to vacate. The City of Albuquerque proposed that the Commission order PNM to dismiss PNM's specific proposed decoupling rate mechanism and conduct a hearing to determine the permissible scope of the decoupling mechanism contemplated by the Efficient Use of Energy Act.

12. REIA subsequently proposed that the issue of whether the Revised Stipulation in

Case No. 16-00276-UT prohibits PNM's implementation of a decoupling mechanism prior to its next general rate case, should be included as another threshold legal issue whose resolution would narrow the remaining issues in the case but also proposed that the case be stayed and the issues briefed as part of that proceeding.

13. On October 7, 2020, the Hearing Examiner issued an Order Vacating Hearing and Staying Proceedings which vacated the October 13 Hearing on PNM's Petition, stayed the

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PNM Resources Inc. published this content on 19 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 March 2021 17:42:08 UTC.