Another PRC Meeting: For Or Against The Public Good

Jim and Donna Crawford spend a lot of time attending state regulatory hearings in order to present some understanding and common sense to the ordinary citizen.  As you will see, if you don’t already know, both Jim and Donna are able to cut through the wall of bull butter erected by the extreme “enviros.”

Here’s the latest slice and dice presented by the Crawfords.  If you see them, please give them a handshake and a word or two of appreciation for their work.

Notes PRC Hearing – September 10, 2013

Old PERA Building Santa Fe New Mexico

By Jim Crawford

We attended a PRC hearing September 10, 2013 at the Old PERA Building, Santa Fe, NM. All board members except for Teresa Becenti-Aguilar were present.

Brief Summary: The main hearing topic was to gather public oral comments on a proposed revision to the PRC’s renewable energy diversity requirement and reasonable cost threshold. The NM legislature passed the NM Renewable Portfolio Standard (RPS) in 2007 which requires electric utilities to provide ever increasing percentages of their electric generation via renewable energy sources. The ultimate goal is 20% renewable by the year 2020. The original legislature action required a “diverse” mix of renewable sources. That was not good enough for the green crowd on the PRC at the time and they took the RPS one step further and specifically defined percentages of each renewable energy source that had to be produced (mini-RPS). This was an added cost burden to rate payers since much of the electric utilities’ flexibility to use the most cost effect way to meet the RPS was eliminated by the mini-RPS within the RPS. PRC is proposing to eliminate the diversity rule.

RPS legislation also established that electric utilities only had to produce renewable electricity up to a reasonable cost threshold (RCT). Some of the utilities were hitting the RCT before achieving the RPS required percentages for renewable electricity. Of course that did not sit well with the green crowd and there has been a strong push to raise the RCT and include a lot of hypothetical cost data like avoided costs of building power plants 50 years down the road, etc. instead of relying on actual measurable cost data like present fuel savings, etc. The PRC proposed two alternatives for calculating the RTC.

The RPS also allows electric utilities to purchase renewable energy certificates (REC) to meet their required renewable percentages. If a utility is exceeding their required percentages they can sell the excess in the form of REC’s to one that is struggling to meet the percentages. Of course the greenies are adamantly opposed to that flexibility. PRC proposed no change in REC rules.

OOB Observations, Opinions, and Barbs:

  • Management of this hearing was the worst I have ever witnessed even counting some of the Valencia County Commission debacles.
  • The hearing was originally scheduled for the tiny PRC chambers. I wondered why they did not schedule it for the big Apodaca Auditorium since I knew the rabid green crowd would be out in force. It was a home game in Santa Fe. We got there very early and the room was nearly full. The lines to sign in filled the length of the hallway. Chairman Hall finally came in a few minutes before the scheduled 0830 start time and said the hearing was being moved to Apodaca Auditorium downstairs and begin around 0900. We all trooped down stairs. The PRC should have known there would be a big green turn out.
  • There were about 42 speakers and all but 3 (Donna, Marita Noon, and John Clemma) were radical environmentalists opposed to the proposed changes. A big proportion of those were owners, workers for, or lobbyists for solar companies as well as well-to-do owners of existing home solar installations already reaping the benefits of tax payer and rate payer subsidies. They know that solar cannot compete on any free market level and view elimination of the diversity requirement as the death knell for solar. They think that wind will dominate if a certain amount of solar is not dictated by big brother.
  • After the first environmental evangelist spoke, the room erupted in loud clapping cheering and sign waving. One would have thought we were at a Lobo game and a home touchdown had just been scored. The hooting, clapping, and hollering continued after every environmental evangelist gave their sermon. I have never attended a hearing where this was allowed without the hearing officer clearing the room. After the first few outbursts, Hearing Officer Hall made a meek under his breath announcement about not demonstrating which no one could hear over the commotion. That was it. There was no further attempt to maintain order and decorum. The outbursts continued on after every evangelist said their amen’s.
  • The rule was each speaker could have 3 minutes and could only speak if they had not previously submitted written comments. Surprisingly PRC did have someone monitoring a list of folks that had submitted written comments. The rule was only selectively applied. The most egregious violation was by Camilla Feiberman from the Sierra Club. The monitor challenged her on the fact the hundreds of written comments had been submitted on behalf of the Sierra Club. The fight was then on with Camilla arguing those people did not represent the Sierra Club even though their form letter actually said so. She then tried to agitate the crowd to stand if they did not like what PRC is proposing. That brought a huge outburst and Hall then relented and let her speak. She ended up occupying over 6 minutes. At least 11 other speakers went well over the 3 minute limit including Steven Michael who went on for nearly 4 minutes. Donna and Marita were forcefully asked to stop when they hit the 3 minutes and not allowed to finish their few last sentences. After Camilla established the precedent, several other people claimed their previous written comments did not count and they were also allowed to present oral comments anyway. One guy even said he was speaking for another person in the audience even though he had just spoken previously! The green elites definitely have elitist status with PRC.
  • Other than the big contingent of folks with direct interest in the solar business, the main arguments were the usual evangelistic comments preaching Armageddon from their anti-fossil fuel pulpit to the extreme detriment to us average electric rate payers. We heard the usual tripe about the early demise of the planet, Indian kids dying from asthma, raping the earth, free solar energy, phony “green” jobs, drought, forest fires, species extinctions, save the kids and grandkids, save the birds, IPCC is the proven gospel, effects of fracking, etc. that will occur if PRC approves the proposed changes.
  • We even learned from Athena that 1 hour of sun light will supply all the energy needs of all of humanity on the planet for a whole year. Wow! That should convince us all that we need no other energy but solar for sure.
  • We had one fellow that builds electric cars but recognizes that his products are really coal fired cars. He lamented that more solar was needed so that his cars would not be dependent on coal for charging. I guess that would work if you only drove at night so you could charge your car during the sun light hours.
  • The rainbows, butterflies, and fairy dust crowd is certifiably nuts.

I did not make any oral comments since I had sent in written comments. I didn’t think it was right to claim someone else with the same name had submitted them like a couple of the folks had claimed. I guess only us conservative folks like to follow the rules. My written comments follow:

I support the proposed rule changes.

In the first place, the Resource Portfolio Standard itself is a terrible piece of legislation.  It is an affront to any concept of free enterprise.  It dictates (crams down our throats)  an arbitrary level of inefficient, ineffective, unreliable renewable energy production that will cost us rate payers over two billion dollars by the year 2020 and yield only insignificant “feel good” environmental benefits.   It creates a false market for solar, wind and other renewable energy sources that is not feasible or sustainable without government intervention.

The PRC then added insult to injury and piled on the diversity requirement which further eroded our utility companies’ ability to make free market economic choices about the most effective way to meet the evil RPS standards.   Your proposal to eliminate the diversity standard is a breath of fresh air and a step in the right direction to reduce the insanity caused by the RPS.  The best solution would be a complete repeal of RPS.  However, as long as the RPS stays in effect, it makes sense to at least allow the utilities to meet the required percentages in the most cost effective way possible by eliminating the diversity requirement.   However, if the diversity requirement is eliminated, it is imperative that all sunk costs incurred prior to repeal be allowed in future rate cases.   As a rate payer, I think that is the very least you can do.

The changes to the plan year revenue requirements for RCT purposes are not clear.   The requirement needs to be based on clear and measurable actual costs and revenues.  Plan year revenues should not be based on hypothetical out-year costs or benefits that may or may not materialize.  Alternative Option C seems to be a more comprehensive accounting of both plus and minus revenues and costs.  However, it is certainly more complicated and as such would result in more disputes over interpretation.  So perhaps the simpler version is preferable as long as all actual cost and benefits can be identified and included.  Either option must include any sunk costs for compliance with diversity before it is/was repealed as noted above.

Following are Donna’s oral comments:

I am curious to know who is representing the ratepayer and taxpayer on this issue of RCT and Diversity. It certainly is not the Sierra Club, the Western Resource Advocates, the New Energy Economy, the Coalition for Clean Affordable Energy, and all the other radical environmentalists who press to further their green agenda , no matter what it costs. Their mantra is that the end justifies the means. Most of these groups have lobbyists who live in Santa Fe and are constantly pounding away at the legislature, the PRC, PNM, and all the other utilities. But who is speaking for the ratepayers and taxpayers?

I would like to be that ratepayer voice with a big message: I support the proposed rule changes to Case 13-00152 UT. Actually, the change I would like to see is to repeal the Renewable Portfolio Standard. The RPS is a political statement , a knee-jerk reaction to the political “soup du jour” during the Richardson Administration. Never mind that it is one of the most costly, ineffective pieces of legislation ever concocted in this state. It does not promote free enterprise and dictates arbitrary, inefficient, unreliable renewable energy production goals. It should be noted that this year six states legislatures introduced bills for repealing renewable energy standards due to the additional cost burden on ratepayers (North Carolina, Kansas, Wisconsin, W. Virginia, Minnesota and Texas). According to the study by the American Tradition Institute and Rio Grande Foundation, RPS will cost ratepayers over $2 Billion by 2020, with only insignificant “feel good” environmental benefits. Does anybody pay attention to these studies?

The Diversification requirement only added insult to injury and prevented utility companies from making free market economic choices about the best way to meet the RPS standards. Eliminating the Diversity requirement is a step in the right direction. However, if the DR is eliminated, it is imperative that all costs already incurred prior to elimination be allowed in future rate cases.

As to the Reasonable Cost Threshold, it is important that utilities be allowed to recover ALL costs associated with renewable energy production. There should be no attempt to determine phony future savings and that do not have an immediate impact on customers’ bills. Renewable energy requires back up generation to cover those times when the renewable source is not producing, and that’s the cost that proponents of renewables don’t want exposed. The Renewable Energy Rider on customers’ bills should reflect ALL renewable costs to be fair to the ratepayer rather than being hidden under some rule or regulation. The above mentioned environmentalists would scream about this because they don’t want citizens and ratepayers to know the true cost of renewable energy.

Somebody has to be the voice of reason and I certainly hope that it is you, the members of the PRC.

Marita cautioned PRC about heeding the faddish politics of climate change and John echoed Donna’s concerns about costs, economic factors, and land use impacts.