This week we filed our response brief to refute the erroneous arguments PNM trotted out in its Brief in Chief following the recent rate case hearing. We reiterated, once again, that PNM's efforts to downplay their imprudence at the Four Corners Power Plant as "imperfect" decision making are disingenuous, asserting that "Imperfect decision-making hardly describes PNM’s conduct. The facts show PNM acted knowingly, willfully, recklessly and intentionally in pursuit of its own self-interest and in flagrant disregard of the interest of ratepayers and of its duty to act prudently. This has become a habit for PNM."
We also held their feet to the fire on the issue of decommissioning costs associated with their imprudent Palo Verde Nuclear decisions.
In 2014 and 2015 PNM repurchased 64MW and extended its lease of 114MW from the Palo Verde Nuclear Generating Station without any alternatives analysis, a decision made to try to ensure that future (and likely enormous) nuclear decommissioning costs the company holds in association with those leases could be offloaded onto ratepayers. In 2016 the Hearing Examiner and the Commission agreed with New Energy Economy that those lease purchase and lease extensions were imprudent, and the PRC ordered that as a remedy for its imprudence, PNM shareholders should bear all those future decommissioning liability costs.
PNM appealed the PRC's decision, as usual, and the Supreme Court determined that even though the purchases were imprudent, PNM should be allowed to present its case to ensure the remedy imposed was just and reasonable. The PRC subsequently ordered that the issue shall be addressed in this rate case, and as per that instruction, PNM's application and testimony filed in this rate case requested the PRC to decide that ratepayers should be liable for all future decommissioning costs, not the company's shareholders.
Given that history, we were surprised to see that the company's post-hearing Brief states instead that decommissioning liability for the imprudent PVNGS assets “should be deferred from this case and decided if and when it becomes an actual issue in a future proceeding.”
This is an interesting bait-and-switch, but we argued that the decision should finally be made. Even though PNM failed to make any effort in their testimony to adhere to the Commission's detailed requirements to prove that allowing decommissioning costs into rates is just and reasonable (probably because they could not convincingly do so!), we argued that the decision should be made now. PNM must not be allowed to voluntarily excuse itself from compliance with PRC Orders whenever it is convenient to them.
As you can imagine the imprudently acquired decommissioning liability associated with closure of a nuclear plant, including tons of radioactive waste, has the potential to add up to hundreds of millions of dollars that PNM hopes its New Mexico customers will be forced to pay. Nothing is gained by kicking this can down the road except continued delay in the true accounting for the enormous costs associated with toxic nuclear energy, and further delay in the transition to low cost solar and wind energy that results in lower profit for the utility.
On another note, check out attorney John Boyd's excellent response to Rob Black of the NM Chamber of Commerce shilling for PNM in the Journal and attempting to raise questions about the validity of the PRC's ultimate decisions in the rate case.
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