New Mexico Public Regulation Commission docs/06-23-11 OM minutes... · 2019. 5. 22. · Created Date: 11/17/2014 8:40:24 AM

MINUTES OF THE REGULAR OPEN MEETING

NEW MEXICO PUBLIC REGULATION COMMISSION June 23, 2011

TIME: 9:30 a. m. PLACE: PERA Building

A quorum was present as follows:

Members Present: Commission Chairman Patrick H. Lyons Commission Vice-Chairman Jerome D. Block Commissioner Jason A. Marks Commissioner Theresa B1ecenti-Aguilar Commissioner Ben L. Hall

Members Excused:

Staff Present Johnny Montoya, Chief of Staff Robert Hirasuna, General Counsel Bob Parker, Associate Geineral Counsel Margaret Caffey-Moquin, Associate General Counsel Marc Martinez, Office of General Council Carol Rising, Legal Division Director Roy Stephenson, Utility Division Director Larry Lujan, Transportation Division Director

Others Present Carl Boaz, Stenographer

CALL TO ORDER

4th Floor Hearing Room 1120 Paseo de Peralta Santa Fe, New Mexico 87501

The Regular Open Meeting was scheduled at 9:30 a.m., pursuant to proper notice under NMSA 1978, 10-15-1(C), and the Commission's Open Meeting Policy. Commission Chairman Patrick Lyons called the Regular Open meeting to ardor at 9:30 a.m., in the Fourth Floor Hearing Room, PERA Building, 1120 Paseo de Peralta, Santa Fe, New Mexico.

A copy of the sign-in sheeit for the Regular Open Meeting is incorporated herewith to these minutes as Exhibit 1.

A copy of the Agenda for the Regular Open meeting is incorporated herewith to these minutes as Exhibit 2.

1. PLEDGE OF ALLEGIANCE

2. INTRODUCTIONS

There were no introductions.

3. MISCELLANEOUS ANNOUNCEMENTS

There were no miscellaneous announcements.

4. CONSIDERATION AND APPROVAL OF THE AGENDA

Commissioner Marks moved to appro,e the agenda as amended with Case 10-00312 UT moved to Regular Action. Commissioner Hall seconded the motion and it passed by unanimous voice vote.

5. CONSIDERATION AND APPROVAL OF MINUTES

" Min!Aes rl the Regular Open Meeting rl June 2, 2011

Commissioner Matias moved to appro,e the minutes d June 2, 2011 as preserted. Commissioner Becenti-Aguilar seconded the motion and it passed by unanimous voice vote.

6. PUBLIC COMMENT

There were no comments from the public.

7. CONSENT ACTION ITEMS

A. Utility Division

11-00089-UT IN Tl-IE MATTER OF INDIAN HILLS WATERWORKS' ADVICE NOTICE NO. 5. (Mar,garet Caffey-Moquin) Order

Commissioner Marks lll01led to approve Case 11-00089-UT. Commissioner Becenti-Aguilar seconded the motion and it passed by unanimous voice vote. So Order,ed.

Minutes of the Regular Formal Open Meeting June 23, 2011 Page2

8. REGULAR ACTION ITEMS

A. Utilly Division

10-00301-UT IN THE MATTER OF THE APPLICATION OF EL PASO ELECTRIC COMPANY FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY TO CONSTRUCT A UTILITY GENERATING PLANT AT THE RIO GRANDE POWER STATION. (Bob Parker) Order

Mr. Parker presented information to the Commission regarding this matter. He noted this was the case Mr. Medeiros presented his RD for construction of the Rio Grande generating station. His order was to approve the RD.

Commissioner Marks ask1~d Mr. Childress if he saw the correspondence with Stacy Goodwin. It was an uncontested stipulation so he copied Ms. Beadles. He had some questions on it.

One was on the growth rates. He referred to the testimony of EPE's expert, Mr. Patton and asked Mr. Childress if he had the testimony. Mr. Childress agreed.

Commissioner Marks saidl on page 9 of his testimony he said the demand forecast projected an annual growth of 2.9%. It was actually on page 4 where he was talking about 10 and 20 year projections. So the peak demand was 3.2% and ;~.9%.

Mr. Childress said actually the energy was 3.1 % and 2.8%. He agreed that peak demand was 3.2 and 2.9. From 2011 through 2016 it was projected at 4.6%.

Commissioner Marks ask19d if that was discussed in this testimony.

Mr. Childress needed to check that. He thought there was discussion of later forecast using the later years but didn't recall where 3,.6 might be.

Commissioner Marks notE~ on page 9 that Mr. Patton said the past ten years had a 3.1 % growth rate and now he was using 3.6% for the next few years. He quoted the testimony further. The 3.6% was higher than historic and asked why they had a higher projection.

Mr. Childress said it was reflective of the company's latest forecast.

Commissioner Marks ask1ed where that was explained in the case.

Mr. Childress said a peaking generating resource was approved. On page 18 he pointed out this resource was originally detemnined as needed in 2008. He quoted that testimony which showed that a shortfall would happen in 2011. On page 21 Mr. Acosta said some change had occurred, slowing of


customer's load growth but those didn't warrant another course of action. It only changed the time of need to build generation facility.

Commissioner Marks pointed out that there was testimony that things were cooling down a bit but rather than less growth, EPE was projecting more than 3.1 %.

Mr. Childress agreed that things slowed down in 2009-2010 and they took that into account and delayed the unit from 2011 to 2013. But his latest calculation on demand was at 3.6%.

Commissioner Marks asked what that was based on. Mr. Acosta said things were slowing down, he said what the historical rate was, but he used a higher rate of growth and never said why.

Mr. Childress said the sizH of this unit was what was needed starting in 2013. There was no question that the 75MW peaker was needed in 2013. The issue was that they could delay it a year or two.

Commissioner Marks ask1:!d what the difference was between the 3.5% or 3.6% total system demand and native system demand.

Mr. Childress said native system demand was the retail.

Commissioner Marks ask1:!d then if you would subtract cogeneration from that. Mr. Childress didn't know.

Commissioner Marks look:ed at table RA 8. For whatever reason, he was taking cogeneration and interruptible off and adding lin1e losses.

Mr. Childress said for the purpose of this exhibit interruptible was not normally removed on forecasting.

Commissioner Marks agmed but on this one it was. He was EPE's witness and it showed not enough margin and he was taking interruptible out here. If native (retail) was about 3.8 or 3.9 then it went even higher.

In here was a proposal to upgrade one of the other units. It was called Bidder 8. 50 MW and he asked why it said in the record that it was rejected.

Mr. Childress said one bidder offered a transmission capacity PPA which was non-responsive and another bidder offered a retrofit on EPE's existing unit which was not only non-responsive but also not feasible.

Commissioner Marks ask1ed how it was non-responsive to the RFP. It was significantly cheaper. On page 34, Mr. Acosta's testimony showed a table of project rankings. It looked like Bidder E and F were the two highest alternatives and appeared to be ranked the same.

Mr. Childress said the testimony of Mr. Acosta showed that Rio Grande was the highest ranking. It was the lowest cost alternative and the only one able to meet the reserve margins, improve the reliability and


meet the operational needs.

Although purely price-wise bidder B might have ranked above it was not the most economical and would not meet reserve margins. The second Rio Grande was the highest. Based on the size and nature of the demand side project, it could not meet the projected load growth, the reserve margins and operational needs of EPE system.

Commissioner Marks concluded that it was not that the DSM cost more but didn't have as many MW.

Mr. Childress said it was a combination of Rio being most economical and being able to meet the reserve margins, improve reliability and meet operational need. There was fuel savings associated with it being the most efficient.

Commissioner Marks thought if EPE took the DSM bid they would recover through their energy efficiency rider.

Mr. Childress agreed in theory but the DSM bid according to the record was not the most economical and could not meet the reserve margins requirement so it would not have replaced the need.

Commissioner Marks said with a history of 3.2 and native projection was running 3.8 or 3.9 he had concerns there.

For PNM and SPS the Commission said that load management was cheaper and the legislature told the Commission to do that in the Efficient Use of Energy Act. He was having trouble differentiating why PNM load management programs were desirable to meet the reserve margin when they come in cheaper than building a peaker plant. It was true for SPS but for EPE, load management didn't make sense at all. The Commission either made a mistake with PNM by allowing them to bring in a peaker recently or else they were making a mistake with EPE.

Mr. Childress said the public did not have its thumb on the scales for load management to try to achieve a specific result. The peaker was explained and included in the last time. None of the parties in this case opposed to the stipulation and staff supported that Rio was the most economical. The testimony was that it was in the most economical option and reserve capacity needs of the company could be met. He didn't know the facts of any PNM situation. They had what they had and the outside expert found this was the best option. That was what EPE proposed and staff recommended approval.

Commissioner Marks thanked Mr. Childress.

Chairman Lyons noted it was one of the fastest growing areas in New Mexico so it made sense to put a plant in there.

Commissioner Becenti-A~Iuilar asked why it was delayed from 2011 to 2013.

Mr. Childress explained that the company needed to consider if the forecast needed adjusting and so they delayed a couple of years.


Commissioner Hall asked if this new plant would help eliminate load management programs or do the same job as load management.

Mr. Childress said load management programs were still under consideration in an RFP.

Commissioner Hall said there was a need for additional power right now. He asked if this would help El Paso Electric with the demand in Texas too. Mr. Childress agreed.

Chainnan Lyons asked for the pleasure of the Commission.

Commissioner Marks wanted to send this one back. The problem with load management programs was that the Commission did them when they were not offsetting the need for plants and then did both and then got these surpluses. There was a point in the cycle where load management made sense to put off the costs of a plant. It appeared to be the case here where EPE with load management could put off a new plant for 4-5 years. They allowed PNM to build a plant and the ratepayers paid for the plant and for load management. It seemed the utility made money building the system. They did load management later on to make the environmentalists happy and rate payers pay twice.

If it was trued up after another review, fine. The testimony was persuaded they were using 3.1 but this was above 3.5.

Commissioner Block joineid the meeting telephonically.

Commissioner Marks moved to remand it. Commissioner Becenti-Aguilar seconded the motion.

Mr. Parker reminded the Commission of the statutory deadline of June 30. He said the Public Utility Act required the PRC to grant a CCN within 9 months so the deadline was June 30, a week from today.

Commissioner Marks ask1ad if there was no 3 months for cause.

Mr. Hirasuna said it was provisional. He looked up the statute.

Commissioner Marks suggested tabling it until Tuesday to detennine if they could remand it or not and in the interim he could invite EPE to submit added infonnation to justify not using DSM.

Commissioner Marks moved to table the case. Commissioner Becenti-Aguilar seconded the motion.

Mr. Childress said the CCN statute provided the decision must be reached in 9 months and it provided for extension for good cause. The company would respond if more infonnation was needed. There were implications to issue a late decision. There was lead time needed to build a power plant. That was why EPE applied last year. Texas had already approved it. In New Mexico the NMED had granted the EA. He asked the Commission to consider that a delay had implications and certainly even more so if the Commission said no to the request.


He agreed the Commission had the option to extend but he was asking for a timely decision.

Commissioner Marks appreciated that. He thought it could be turned around in a month with a hearing. He asked if a month would interfere with their construction schedule.

Mr. Childress thought that would be okay.

Mr. Hirasuna read from the statute that it could be extended up to six months.

Commissioner Hall said giiven El Paso's growth rate might be exaggerated; he would rather have a plant from which people could get power instead of a load management program for the same price. It would be an asset there. He would rather see ratepayers pay on a visible asset instead of paying for load management that wasn't even working.

Commissioner Marb wNhdrew the motion to table and went back to the original motion to remand.

He wanted an explanation about what didn't work in the retrofit and an explanation that showed it really was lower cost to the rate payers.

Commissioner Hall asked who would come up with the load factor.

Mr. Childress said they had an economist in the company.

Commissioner Hall asked why there were different numbers.

Mr. Childress said they would come up with more specific numbers and explain why it was less costly. The record was likely to be the same.

Commissioner Hall said if the load factor was going to be the same in six months, he didn't understand putting it off. He didn't know that it would come up any different.

Chainnan Lyons asked when they would break ground if the Commission approved it today. Mr. Childress didn't know.

Chainnan Lyons asked how many would be employed to build it. Mr. Childress didn't know.

Chainnan Lyons asked how much EPE would spend.

Mr. Childress said they would spend $81 million to build it.

Commissioner Becenti-A~1uilar said she would support EPE building a new power plant but they were setting the stage for EPE and other utility companies for need for clarity whenever the Commission had a question - especially when it affected the consumers. When they have to pay twice and we were bottling the percentage of the load ma1nagement that was questionable. When the Commission asked questions for clarity it was for the consumers. They would like to know that the calculation had been based on reality.


The consumers were not here to speak so we must speak for them. We need to know clearly that the calculation was done in best interest of consumers.

The motion to remand failed by a voice vote d 2-3 wfth Commissioners Hall, Lyons and Block voting against.

Commissioner Hall moyed to approve the order as presented to build a power plant in Sun land Park. Chainnan Lyons seconded th•! motion and it passed by majority (3-2) voice vote with Commissioner Marb and Commissioner Becent1-A4iuilar voting against. So Ordered.

10-00388-UT IN THE MATTER OF SOUTHWESTERN PUBLIC SERVICE COMPANY'S APPLICATION FOR AUTHORIZATION AND APPROVAL TO (1) ENTER INTO A POWER PURCHASE AGREEMENT FOR WIND ENERGY AND ASSOCIATED RENEWABLE ENERGY CREDITS WITH CIELO WIND SERVICES, INC. SPINNING SPUR LLC PROJECT AND (2) RECOVER ALL ENERGY RELATED COSTS UNDER THE PPA THROUGH ITS FUEL AND PURCHASED POWER COST ADJUSTMENT CLAUSE. (Bob Parker) Order

Mr. Parker presented information regarding this matter to the Commission. He prepared an order to approve the RD and added that SPS would not sell any RECs to any other New Mexico utility as part of this order. In the Commission's discussion last week it seemed there was no objection to the purchase of this inexpensive wind power but the issue was on the RECs that came with it. He heard a majority of commissioners say they wanted to prohibit SPS from selling those RECs to public utilities in New Mexico. It added just one sentence to Ms. Hurst's RD, "SPS shall not sell or otherwise transfer to a New Mexico public utility any RECs pursuant to the contract approved by this final order."

Commissioner Hall asked what this would do to coops.

Mr. Parker said this order would prohibit them from selling the RECs to any utility in New Mexico.

Commissioner Marks asked why the Commission would want to prohibit that.

Mr. Parker acknowledged that was a good question. Commissioner Marks was not here for that discussion.

Commissioner Marks agr1eed but asked if there was a legal reason or a policy reason, an economic reason or something else.

Chairman Lyons said while New Mexico was sitting here worrying about solar energy, Texas was building lots of wind farms. So New Mexico had to buy power from Texas wind farms rather than building wind farms in New Mexico. The solar industry had their claws too deep in New Mexico. We need to build our own wind farms. He brought it up to keep the RECs out and make them go somewhere else with them to encourage wind farms here, in New Mexico. It would bring money and jobs to our state.

Minutes of the Regular Formal Open Meeting June 23, 2011 Pages

Commissioner Marks ask1~d if those RECs from this project would be repriced.

Mr. Parker agreed - the foxas Commission set the price for RECs.

Commissioner Marks asked how that would work with the REC tracker.

Ms. Ruth Sakya (SPS) said the REC tracker came as a result of their rate case that had it at $5/REC and was now before the PRC to re-evaluate it.

Commissioner Marks thought that was good. He asked if it would move money if the Commission repriced RECs at a lower rate.

Ms. Sakya agreed and said it would be better for New Mexico.

Commissioner Marks supported approval of the PPA and agreed with Chairman Lyons that building more wind in New Mexico but didn't think putting a prohibition on one specific project was a good idea. SPS had two other projects and there were millions of Texas RECs out there. What the Commission needed to do was on the buying side, not the selling side. Without any grounds, he didn't think it fair to keep these RECs off the market in this contract. It just seemed arbitrary.

Chairman Lyons asked how long the RECs were good for.

Ms. Sakya said they were good for three years in Texas.

Commissioner Marks said it was four years in New Mexico.

Commissioner Hall said if New Mexico could get a transmission policy going for wind or solar. It would be two billion dollars for solar being constructed in the Deming area. Then solar might get to be more affordable than wind.

Chairman Lyons thought Commissioner Marks made a good point.

Chairman Lyons asked that on page 2, they strike paragraph C as an amendment to the order.

Commissioner Marks moved to approye the order as amended wlh paragraph C on page 2 sb'icken. Commissioner Becenti-Aguilar seconded the motion and it passed by unanimous (5-0) voice vote. So Ordered.

10-00086-UT IN TliE MATTER OF THE APPLICATION OF PUBLIC SERVICE COMPANY OF NEW MEXICO FOR REVISION OF ITS RETAIL ELECTRIC RATES PURSUANT TO ~~DVICE NOTICE NOS. 397 AND 32 (FORMER TNMP SERVICES). (Robert Hirasuna) Order


Mr. Hirasuna presented this matter to the Commission. The HE issued her certification on June 21 and filing exceptions were due in tian days. He asked if the Commission would also like to provide for replies to exceptions. He would like to s,ee them because it would facilitate his review of the record. It shouldn't slow down the consideration of the case because once the exceptions were filed he would begin reviewing them immediately. The filing of replies would help him with responding to parties and expedite things.

Commissioner Marks mc,.,ed to approve the procedural order as stated by Mr. Hiraauna. Commissioner Hall seconded the motion and it passed by unanimous (5-0) voice vote. So Ordered.

10-00280-UT IN THE MATTER OF THE APPLICATION OF PUBLIC SERVICE COMPANY OF NEW' MEXICO FOR APPROVAL OF 2010 ELECTRIC ENERGY EFFICIENCY AND LOAD MANAGEMENT PROGRAM AND REVISIONS TO PROGRAM COST TARIFF RIDERS PURSUANT TO THE NEW MEXICO PUBLIC UTILITY AND EFFICIENT USE OF ENERGY ACTS. (Robert Hirasuna) Order

Mr. Hirasuna presented this matter to the Commission. He said after the discussion on Tuesday he made some changes mostly suggested by Commissioner Marks. The Commission allowed him to find out if there would be a penalty if PI\IM rolled back what was approved in the rate case and he looked at it. In the 2004 case the budget was something over $4 million. Currently the budget was $7.8 million. He couldn't get the information needed from the record in the previous order so a bench request was issued and PNM responded yesterday. He provided copies of that order to the Commission.

The bottom line was that if the PRC rolled back the budget to 2004, it would mean a termination fee of about $10 million. What PNM said now was that there was a maximum for the power saver program directed to residential and small commercial. The current capacity was 42MW in that program and once was 62MW so the remaining capacity was about 20 MW.

The peak saver was already maxed out at 30MW. However, the contractor, lntemoc was allowed to receive payment based upon the capacity that had been installed under its contract and it included a declining scale of fixed termination fees in the event it was terminated.

That contemplated beyond 47 MW being installed and now was up to about 72 MW. That would mean PNM could not pay the contra1ctor for capacity already installed, thereby giving rise to these penalties.

Commissioner Hall asked if they wanted $10 million to freeze the program. Over the life, he asked how many would they have to come up with to fulfill the contract. They were separate programs.

Mr. Hirasuna said Internee had always fulfilled their contract requirements. They would continue to receive yearly payments to maintain their contract until 2017. That was what the $7.9 million was for.

Commissioner Hall thought it was bad business for a Commission to allow a ten year contract when the Commission changed every two years.

Minutes of the Regular Formal Open Meeting June 23, 2011 Page 10

Commissioner Hall said PNM confessed they were not using that money for load management but everything else they wanted to do. That was not in the contract. Nothing had been measured and verified according to their testimony.

Mr. Hirasuna said they recently filed the revised M&V report and filed supplemental testimony on how it was used and verified the pro!~ram had been used to shave daily peak of PNM's load except for two times when they used it for testing. By the definition, they appeared to be using it as agreed.

Commissioner Hall said they were even selling the electricity and he didn't see the ratepayers getting that money back.

Mr. Hirasuna said it did flow through and the PRC had an independent auditor who came back with a gooo report.

Commissioner Hall said the legislature didn't have to give the PRC the authority to cap it - they had no jurisdiction. The Commission could make a rule to cap it. He understooo the legislature could override the Commission if they chose.

Chainnan Lyons agreed with Commissioner Hall that the legislature didn't have anything to do with that.

Commissioner Hall noted that on page 12, PNM had failed to provide any basis for the budget so the PRC could not approve this budget (for load management) although under load management, he felt it pertained to the whole budget.

Commissioner Hall said the old budget was approved and new budget was not approved and couldn't be because it exceeded the 2:5% maximum at 38%.

Mr. Hirasuna didn't know that they expended more.

Commissioner Hall said came to the Commission with a request to exceed the budget.

Mr. Hirasuna explained that the 25% applied to increases between plans. If they exceeded the budget by more than 25% they have to come ask for pennission. The budget increase they proposed was consistent with the agreement approved. Even if capped at $4.7 million, the ratepayers would have to pay the tennination fees.

Commissioner Hall asked if PNM was using the load management program for purposes other than what was intended. It was not fair to charge the rate payers $7 million and do other things. Apparently it was okay for PNM to skirt around the contract but not for the Commission.

Mr. Hirasuna said the pr~~ram required the independent evaluator to explain how they would use the program a year from now to ensure it was used for the purposes in the contract.

Commissioner Hall said the program was not for selling electricity on the open market that was saved


in this program. They were using their own definition of load management. If they saved the rate payers money and then sold the electricity they were making rate payers pay for it twice.

Chairman Lyons disagreed with that paragraph on page 12.

Mr. Hirasuna said they were approving a budget pursuant to PRC regulations.

Chairman Lyons asked him then to eliminate that paragraph on page 12.

Mr. Hirasuna agreed to either take it out or say the PRC disagreed with it.

Commissioner Hall said no one knew what the legislative intent was. That couldn't be defended in court.

Commissioner Becenti-A~Iuilar thought this would be a battle on every case.

Chairman Lyons asked if the Commission could eliminate those two lines.

Commissioner Hall wanted it taken out.

Mr. Hirasuna said PNM submitted twerthree year out projections but didn't ask for PRC approval on that. Each year PNM could spend up to that amount but that didn't mean they had to stop.

Chairman Lyons asked him to just delete the second and third lines of page 12.

Commissioner Hall said they were selling the power saved and not using the money for planning purposes and he didn't see how they could justify that.

Chairman Lyons read the statements where PNM had done other things with the program.

Mr. Pat Ortiz (for PNM) came forward and said that Ms. Dempsey normally handled this but could not be present. He understood that the load management programs were not only to help reduce peak but to help maintain reserve margins and avoid violations of the margins. The margin was required by Commission order. PNM held resources to meet demand that were in excess of what the peak was.

Commissioner Hall said PNM was supposed to reduce demands on the transmission lines so it didn't have to start another unit. But instead of reducing the load on that line PNM sold the energy to someone else and still was providing all the necessary energy.

Mr. Ortiz pointed out that the dispatchers had to make instant decisions on the loads and call upon the customers to reduce their load. There was a calculation in the fuel clause that all money achieved by that went to the rate payers so none were affected. They shaved the peak to stay within the parameters.

Commissioner Hall said PNM had to know how many they contracted with to know what load needed to be managed. This program was to reduce demand; not to sell off to other programs.


Mr. Ortiz pointed out that the language of the constitution said in article 11 of section 1 - section 2 described the duties of the Commission (which he quoted). The legislature described how the PRC would do its job.

Commissioner Hall disagreed.

Chairman Lyons asked if l1e was saying he would file suit against the PRC at the Supreme Court.

Mr. Ortiz clarified that he was just saying the legislature had already provided direction to the Commission. He was concerned that the Commission was putting in language that would overstep its authority.

Commissioner Hall said the Commission had a right to ask where PNM was spending the money. The Commission was not exceeding its authority nor were they trying to take power away from them and they were not taking it away from the Commission. The Commission had a perfect right to question any of the numbers brought to us and to ask why PNM was spending money for load management on other things.

Mr. Ortiz didn't disagree cit all and said that was not why he made the statement.

Commissioner Becenti-A~1uilar said it appeared PNM was telling the Commission how to do its job including reading from other sources. But PNM needed to allow the Commission to study and work on these projects without interfen::mce. Let us focus on the load management program and how we feel about it. What you were saying complicates things more.

Mr. Hirasuna went next to the commercial comprehensive program.

Chairman Lyons noted page 32 the summary showed $869,000 reduction in commercial comprehensive and he had a handout.

Mr. Hirasuna said they proposed a 55% increase in the budget and with growth in customers of 3.5% so he felt the budget should only go up by that amount. The target was 900,000 and they didn't reach that. The Commission could eliminate that program.

Chairman Lyons thought his recommendation looked very good.

Mr. Hirasuna provided a handout on the changes. First, under existing revenues, it could result in a surcharge of 2.9%. It provided for a two-phase rate increase. The first would be effective now through January 2012. The other woU1ld be 2.5% and in January would decrease to 2.42%. The bottom line was that if the PRC approved the certification it would be an increase of 2.42%.

Chairman Lyons commended Mr. Hlrasuna on a very good chart.

Commissioner Hall asked why he took off the unrecovered costs.


Mr. Hirasuna said it was just to show what they asked for and the RD recommended deferring it.

Commissioner Marks wanted to proportionally reduce it the same amount as the residential reduction to maintain some balance since everyone was paying for it. What was handed out was not accurate on the totals but residential was now 4.3 or a 22% decrease in the residential program. He proposed doing that to commercial as well.

He thought this would be the worst year for efficiency. Three riders were going on but there would be more flexibility next time. This rider just got big. So here was a way to take out $1.1 million without reductions in program. He gave Mr. Hirasuna the language for the order.

Chairman Lyons summarized that $4.369 million was the 2010 cost for commercial and Commissioner Marks proposed $4.169 million and asked if it would hurt anything. Put $4.369 million as the floor.

Commissioner Marks was okay with that.

After further discussion, the Commission decided it was $4.95 million.

Commissioner Marks said it was in the order that the program grew from $3.4 million to $5.3 million.

Mr. Hirasuna said the actual was 4.953.

Mr. Hirasuna listed the deitail for education about energy efficiency in general to increase public's interest. The Commission discussed billboards with Mr. Darnell.

Commissioner Marks proposed cutting the media transfonnation in half. Chainnan Lyons agreed the $94,000 was appropriate. They were trying to keep the rider as low as possible.

Mr. Hirasuna said he forgot to note that debt service for 12 months rather than 18 months.

Commissioner Marks 1T1011ed the order as amended in the discussion and debt service be on18 months. Commissioner Hall seconded the motion and it passed by unanimous (5-0) voice vote. So Ordered.

11-00230-UT IN THE MATTER OF THE FORMAL COMPLAINT OF JUDY RUELAS AGAINST INDIAN HILLS WATERWORKS, INC. (Margaret Caffey-Moquin) Order

Ms. Caffey-Moquin presented infonnation regarding this matter to the Commission.

There were no representatives from either side present at the meeting.

Ms. Caffey-Moquin explained that this came through CRD and Mr. Hooper handled the matter. Indian Hills was barred from providing water service at the rates. The draft order was a procedural order that

Minutes of the Regular Fonnal Open Meeting June 23, 2011 Page 14

required a quick response. The respondent would be given 2 days instead of 20 to satisfy the complaint. Commission staff was required to file a preliminary statement regarding this complaint. It would be expedited and considered one week from today. She speeded up the time line, given the nature of the complaint.

Commissioner Marks ask1ed when the complaint came in.

Ms. Caffey-Moquin said it came 2 weeks ago on June 9.

Commissioner Marks ask1:':!d how long they were without water.

Ms. Caffey-Moquin said the CRD documents were not yet in the record because of social security concerns. They purchased thE~ property in May.

Commissioner Marks ask1ed if it had never had water.

Ms. Caffey-Moquin said it previously had water service. The prior owners were the protesters of the new rates. They were receiving water at this address. The new owner could not occupy the premises until water was available.

Commissioner Marks felt 2 days was not sufficient for the company and asked for one week.

Chairman Lyons and Commissioner Hall were okay with a week.

Commissioner Marks said they could get the notice to him today. Mr. Hirasuna agreed.

Ms. Caffey-Moquin commented that the CRD documents said the State Water Engineer would have authority. But it appeared that water was being provided. The complainant said Mr. Tinley represented to her that it was a PRC issue.

Chainnan Lyons moved to approve the order. Commissioner Hall seconded the motion as amended from two days to seven days.

Ms. Caffey-Moquin said staff would need to have a chance to review the response.

Chainnan Lyons amended his motion to 9 days and the motion passed by unaninous (5-0) voice vote. So Ordered.

DISCUSSION ITEMS

09-0094-UT IN TliE MATTER OF THE DEVELOPMENT OF AN ALTERNATIVE FORM OF REGULATION PLAN FOR QWEST CORPORATION. (Ma11garet Caffey-Moquin) Order


Ms. Caffey-Moquin report1ed that the PRC could not act because the court had not yet returned jurisdiction to the PRC so this was just a discussion item.

Chainnan Lyons said the}, must make note of that - Discussion but no vote.

Ms. Caffey-Moquin said most of the parties were engaging in discussion about the scope. They might continue negotiations. Her intf:mtion, given the posture, was to alert the Commission that some sort of proceeding needed to be calleid once the record was complete. She said she wouldn't discuss except in executive session. The implementation had not been stayed by the dockets. She understood and welcomed Mr. Goodwin back this morning.

She didn't think there was any reason to delay or change implementation but as to the effect of the response in the prior case, it was clear the Commission was going to take some evidence on whatever the issues were.

She suggested the Commission might consider whether to appoint a HE for taking new evidence or have parties develop a scope to that or just hear the matter. That was as far as she could go on the case.

Commissioner Marks was glad the Supreme Court sent it back. There was a likelihood that the parties could work out a settlement not just of what the Supreme Court said the Commission should deal with but a resolution for a price war and a mechanism that actually would work and could be implemented. Qwest was supposed to be the beneficiary and never had been allowed to use it. A lot of details didn't get done right.

Chainnan Lyons asked when that was filed.

Ms. Caffey-Moquin said it was at the end of January 2010. It went to order last October. She agreed to bring it back when the Commission could act on it.

9. COMMUNICATIONS WITH GENERAL COUNSEL, ROBERT HIRASUNA

Mr. Hirasuna said a bunch of cities asked to re-open the record on the NMGC curtailment case. Espanola, Taos, Questa were three of them. He was infonned that NMGC planned to file a response on Monday. He would bring it to 1the Commission next Thursday.

10. COMMUNICATIONS WITH CHIEF OF STAFF, JOHNNY MONTOYA

• Update on Global Energy Consultants report on draft d energy efficiency in New Mexico potential study, presented by Floy E. Stephenson.

Mr. Stephenson and the Global energy Consultant, Ms. Ingrid Rohmund, presented the report.

Mr. Stephenson introduCEid Ms. Ingrid Rohmund and Ms. Bridget Kester who were from California. They were nationally known eixperts and came to the Commission free of charge, courtesy of Ken Hughes.

Minutes of the Regular Formal C>pen Meeting June 23, 2011 Page 16

His agency {NMED) sponsored the lead on it. Ms. Rohmund would share a little history and where they were on the project.

Ms. Rohmund said they had done consulting on energy for the past 20 years. Their company was just acquired by lnternoc but was completely separate on this study. They were engaged last August to do a study on energy use in New Mexico. They recently did one for the Midwest and one for FERC. They had also done work for individual utilities.

They were looking at electricity and natural gas and analyze the effect of peak shaving. Their results were in 4 volumes and their work was done. The executive summary was posted on their web site.

Chairman Lyons mentioned the major natural gas outage in February and asked if there was load management for natural gas.

Ms. Rohmund said the studies didn't usually do that. They looked more at equipment and device replacement for reduction of natural gas with things like furnaces, water heaters, programmable thermostats, pipe wrap and w1~atherization. She walked through some highlights.

Slide 3 showed electricity market characterization - projected from 2012 - 2025.

Commissioner Marks ask1~d what the 0.85% electric growth was based on.

Ms. Rohmund said it was not peak demand and it was residential only.

Mr. Stephenson commented briefly on the presentation when she concluded.

Ms. Rohmund said all the utilities wanted this study and it was a very collaborative process to support the study.

Chairman Lyons thanked her for the presentation.

Mr. Montoya said Ron Darnell would like to update the Commission on a horrible situation that just happened with PNM.

Mr. Darnell announced that one of their employees in a pull-top training exercise fell 20 feet and died. OSHA was on site. He just wanted to make the Commission aware of it.

11. COMMUNICATIONS WITH COMMISSIONERS

Commissioner Hall announced that PNM had resolved customer issues on complaints in the southern part of the state.

12. ADJOURNMENT


Chairman Lyons moved to adjourn the meeting. Commissioner Marks seconded the motion and it passed by unanimous voice vote.

The meeting was adjoum-:Ki at 12:40 p.m.

ATTEST:

:fu l~ 12., 2.0ff

JEROME D. BLOCK, VICE CHAIRMAN

~ ~-!_:.O .. ERESABECENTI-AGUIUrnSSIONER

Minutes of the Regular FoITTial Open Meeting June 23, 2011 Page 18

!/

Thank you for attending this meeting.

EXHIBIT 1 PRC 06/23/11

BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION

REGULAR OPEN MEETING Thursday, June 23, 2011

9:30 A.M. PERA Building, 4th Floor Hearing Room

1120 Paseo de Peralta, Santa Fe, NM 87501

AGENDA

1. PLEDGE OF ALLEGIANCE

2. INTRODUCTIONS

3. MISCELLANEOUS ANNOUNCEMENTS

4. CONSIDERATION AND APPROVAL OF THE AGENDA

5. CONSIDERATION AND APPROVAL OF MINUTES

• Minutes of the Regular Open Meeting of June 2, 2011

6. PUBLIC COMMENT

7. CONSENT ACTION ITEMS

A. Utility Division 11-00089-UT IN THE MATTER OF INDIAN HILLS WATERWORKS' ADVICE Margaret Caffey-Moquin NOTICE NO. 5.

10-00301-UT Bob Parker

Regular Open Meeting Agenda Thursday, June 23, 2011 Page 1 of 3

Order

IN THE MATTER OF THE APPLICATION OF EL PASO ELECTRIC COMPANY FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY TO CONSTRUCT A UTILITY GENERATING PLANT AT THE RIO GRANDE POWER STATION.

Order

EXHIBIT2 PRC 06/23/11

8. REGULAR ACTION ITEMS

A. Utility Divisio11 10-00388-UT Bob Parker

10-00086-UT Robert Hirasuna

10-00280-UT Robert Hirasuna

IN THE MATTER OF SOUTHWESTERN PUBLIC SERVICE COMPANY'S APPLICATION FOR AUTHORIZATION AND APPROVAL TO (1) ENTER INTO A POWER PURCHASE AGREEMENT FOR WIND ENERGY AND ASSOCIATED RENEWABLE ENERGY CREDITS WITH CIELO WIND SERVICES, INC. SPINNING SPUR LLC PROJECT AND (2) RECOVER ALL ENERGY RELATED COSTS UNDER THE PPA THROUGH ITS FUEL AND PURCHASED POWER COST ADJUSTMENT CLAUSE.

Order

IN THE MATTER OF THE APPLICATION OF PUBLIC SERVICE COMPANY OF NEW MEXICO FOR REVISION OF ITS RETAIL ELECTRIC RATES PURSUANT TO ADVICE NOTICE NOS. 397 AND 32 (FORMER TNMP SERVICES).

Order

IN THE MATTER OF THE APPLICATION OF PUBLIC SERVICE COMPANY OF NEW MEXICO FOR APPROVAL OF 2010 ELECTRIC ENERGY EFFICIENCY AND LOAD MANAGEMENT PROGRAM AND REVISIONS TO PROGRAM COST TARIFF RIDERS PURSUANT TO THE NEW MEXICO PUBLIC UTILITY AND EFFICIENT USE OF ENERGY ACTS.

Order

11-00230-UT IN THE MATTER OF THE FORMAL COMPLAINT OF JUDY Margaret Caffey-Moquin RUELAS AGAINST INDIAN HILLS WATERWORKS, INC.


Order

09-00094-UT IN THE MATTER OF THE DEVELOPMENT OF AN Margaret Caffey-Moquin ALTERNATIVE FORM OF REGULATION PLAN FOR QWEST

CORPORATION.

Order

9. COMMUNICATIONS WITH GENERAL COUNSEL, ROBERT HIRASUNA

10. COMMUNICATIONS WITH CHIEF OF STAFF, JOHNNY MONTOYA

• Update on Global Energy Consultants report on draft of energy efficiency in New Mexico potential study, presented by Roy E. Stephenson.

11. COMMUNICATIONS WITH COMMISSIONERS

12. ADJOURNMENT

The Commission will make reasonable efforts to post the agenda on the Commission's website 24 hours before the open meeting but the inability to do so within the 24 hours prior will not require the Commission to delay the meeting or to refrain from taking action on any agenda item on which it otherwise could act.

At any time during the Open Meeting the Commission may close the meeting to the public to discuss matters not subject to the New Mexico Open Meetings Act. The Commission may revise the order of the agenda items considered at this Open Meeting.

PERSONS WITH DISABILITIES

ANY PERSON WITH A DISABILITY REQUIRING SPECIAL ASSISTANCE IN ORDER TO PARTICIPATE IN THIS PROCEEDING SHOULD CONTACT THE OFFICE OF DIRECTOR OF ADMINISTRATIVE SERVICES OF THE COMMISSION (827-4084) AS SOON AS POSSIBLE PRIOR TO THE COMMENCEMENT OF THE OPEN MEETING.


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