Public or Private: It’s Time to Decide

The imminent conversion from fossil-fueled energy production in the U.S. to renewable sources of electricity is quite uneven. In New Mexico, it might be described as bizarre. It is not at all clear what the motivating forces driving the biggest electric utility, Public Services Company of New Mexico (PNM) or the governmental regulatory agency, New Mexico Public Regulatory Commission (PRC), actually may be. But it doesn’t look good.

We PNM “rate-payers” may be excused for feeling a bit dizzy. Each revelation of PNM attempts to avoid its duty as a public utility to serve the public interest, is bad enough. PNM’s private corporate interests prevail, with recurring foot-dragging, mission corruption, and endless corporate spin. The unspoken goal would seem to be to continue down the deadly path of high carbon emissions as long as PNM can get away with it. The falsified analyses of its proposed plan for the pollution-laden San Juan Generating Plant in the Four Corners area, is a case in point. It involves long-term coal commitments that entail huge public liabilities for intolerable carbon emissions at ever-increasing costs. It seeks to keep energy-supply contract decisions secret from the public while negotiating to keep far more coal and nuclear power in “the mix” than is in the public interest. That is simply outrageous.

PRC passivity is no less disturbing. The PRC supposedly “regulates” utility companies in the public interest. As Steve Terrell, columnist for the Santa Fe New Mexican, recently noted, some PRC commissioners and staff have met with a securities analyst, who presumably sought to learn the status of the PNM proposal for the San Juan generating plant. But high-end analyst-PNM executive lunches and private analyst meetings with PRC commissioners and staff? In Jon Stewart’s parting words, “If you smell something, say something.” Three of the five PRC commissioners just voted to drop the attempt to enjoin The New Mexican from publishing relevant documents – a small glimmer of hope.

The PRC should actively pursue the public interest. Yet it seems indifferent to how PNM might ultimately meet the State’s modest requirement for 20% of electricity generation to be from renewable sources by 2020. Why has not the PRC developed a carbon-emissions reduction plan as a baseline for negotiations? PNM should find ways to meet PRC requirements – if the PRC had any. The PRC just waits for a PNM plan it can legally accept. That is not nearly enough. Getting to low carbon-emissions energy production requires a strategy that does not add coal, nuclear, and fracked-gas sources electricity generation. That is precisely the direction that the PNM proposes and the PRC takes seriously. New Energy Economy, A non-profit intervener in the case, offered an economical emissions-reducing alternative to PNM’s financially self-serving plan. Its analysis exposed the faulty calculations and convenient conclusions of PNM’s proposal. Its plan demonstrates the superior cost-effectiveness and sustainability of much greater reliance on renewable energy technologies, while accelerating emissions reduction. PNM’s coal-laden proposal is driven by its own financial interests in direct conflict with the public interest.

PRC Acting Director of the Utility Division told me on the phone that the PRC’s policy criteria for ruling on the PNM proposal for the future of the San Juan Generating Plant is based on New Mexico law, which specifies that electricity generation must be 15% from renewable sources by 2015, for four years, then 20% by 2020. Proposals, objections, and agreements are to be weighed by the commission on that basis in evaluating PNM’s proposed plan. The San Juan Generating Plant and adjacent coal mine, in the Four Corners region now notorious for its atmospheric “methane bubble” visible from space. Navajo health statistics in the area are a disaster.

The Public Interest Deferred

But I think that the law allows for a lot of interpretation as to how its requirements may be met. So far it seems that the PRC is primarily passively responding to interpretations embedded in the PNM proposals rather than pro-actively framing the discussion in the interests of public safety and health as it should. The law does not say “no more than 20%” renewables by 2020. There is no reason why the PRC cannot aim for more than 20% by finding a strategy such as that proposed by New Energy Economy, which leads to the 20% minimum goal while improving the health, safety, and costs for New Mexicans, sooner rather than later.

Now, as if icing on the cake of malfeasance, two alleged clean-energy groups, “Western Resource Advocates” and the “Coalition for Clean Affordable Energy,” which are also interveners in the case, along with PRC Staff Counsel Patrick Lopez and NM Assistant Attorney General, P. Cholla Khoury, have signed a “compromise” deal that would accept PNM’s current plan and leave open the question of whether coal-fired generation at San Juan should continue operations after 2022. The two remaining coal-fired plants would remain open at San Juan through at least 2022. These putative environmental groups have acquiesced to virtually every element of the PNM proposed plan. Western Resource Advocates’ Web site brags that it has achieved a great “victory” for the environment. I guess that is how you spin allowing yourself to become a victim of cooptation by corporate polluters.

New Energy Economy had withdrawn from the negotiations. Perhaps its Director, Mariel Nanasi, smelled something. The strategy of cooptation has worked nationally for polluters in dealing with “Big Green” environmental groups for decades. Naomi Klein, Tim DeChristopher and others have independently documented the corruption of groups like The Nature Conservancy, World Wildlife Fund, and other Big Green groups by the polluters they were trying to work with. They supported climate schemes like carbon trading that gave corporations opportunity to profit from them while dodging real carbon emissions reduction. In the process of such compromises, Big Green “non-profit” organizations’ bank accounts swelled with corporate donations and the planet continued to overheat. This New Mexican “compromise” smells just like the fishy national failure of Big Green environmental groups.

Big Green Fails Again

The problem with Big Green groups in New Mexico is the same as with the national Big Energy and Big Environmental groups. Their deals are all about economics and politics – most of it self-serving. But Mother Nature doesn’t make deals. Anything short of rapid transition away from fossil fuels will accelerate the devastating climate disruptions already occurring. The convoluted legal “stipulation” filed with the PRC as a “compromise” with PNM, was also signed onto by PRC “Staff” – a peculiar element in itself. The “agreement” between PNM and the Big Green interveners kicks the emissions-can quite a ways down the regulatory road riddled with loopholes for PNM to wiggle through. I read it and found nothing that commits PNM to do any more than what it had already proposed. It’s a not-all-that-clever shell game, sufficiently convoluted as to deter all but the most persistent citizen from seeing the game for what it is.

Some PRC commissioners are happy with the compromise. Instead, the commissioners should demand robust compliance with the New Mexico State renewable energy goals set years ago then largely abandoned. We need serious emissions-reduction targets for New Mexico energy producers, not compromises that push solid climate action down the road.

Photo-voltaic Sun Tracker Generating Electricity at Home.

Photo-voltaic Sun Tracker Generating Electricity at Home.

PNM has severely reduced and eliminated incentives for citizens installing solar-electric equipment that would reduce fossil-fuels use – but not add to PNM’s profits. Citizen-owned distributed generation adds electricity to the grid without adding emissions, but does not add to PNM’s cost-basis for its profits. This leads PNM to discourage the very technology that is best for the public. The PRC appears oblivious to the urgency of the renewable-energy production transition, as the crisis of climate disruption accelerates. As Peggy O’Mara pointed out in last Sunday’s The New Mexican, the race for renewable energy has already passed a turning point. Continued reliance on coal is now a high financial risk as well as environmentally stupid. The PRC also has a fiduciary responsibility to the public to protect it from undue costs and financial risk. PNM’s plan would introduce new coal and nuclear health and liability risks to New Mexicans. On the other hand, the history of regulation in the U.S. is one of corporate control over agencies ostensibly meant to regulate them.

Public Rights or Private Privilege

This whole mess revolves around an “unmentionable” flaw in the way energy is supplied to the public – through a faux public utility. The goals of a public utility should match the public interest. The goals and actions of PNM as a privatized “public utility” – an oxymoron of sorts – do not. Its obvious schemes to increase profits at the expense of the public interest should be offensive to its customers. At a deeper level, its guaranteed monopoly profits based on its capital investments and operating costs, give incentive to create investments and costs to justify rate-increase demands – and increased profits.

This setup reminds me of those corrupt “cost plus” Defense Department contracts that enrich the likes of Boeing, Northrup-Grumman, and others with “cost overruns” at the tax-payer’s expense. Without real public oversight, it’s a never-ending cycle of gouging the public for private corporate profit. Unlike some investor-owned public utilities that are moving expeditiously to solar and wind, PNM is regressive in the extreme. New Mexicans simply cannot afford the wasted water, methane pollution, coal-dust diseases, nuclear liabilities, and profligate profiteering of PNM. Now if the PRC were to really do its job…

Certainly, converting from a privatized energy supplier like PNM to a publicly owned and operated public utility is complicated. Nevertheless, PNM and PRC failures to move quickly toward significant carbon-emissions reduction and affordable energy in ways that serve the public interest would make it well worth the effort in the long run. It is time for the people of New Mexico to look after their own interests and pressure the State to change the way it does the people’s business, especially where energy and a healthy environment are concerned.

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