By Carla J. Sonntag
Executive Director, New Mexico Utility Shareholders Alliance

Reliable electricity is the backbone of society and will make a difference in how we move this state out of a lingering recession. That's why the Recommended Decision (RD) in the PNM rate case, which could effectively eliminate nuclear produced electricity as an option for New Mexico's future, was so stunning. If adopted, it could be the precursor to higher rates and a dilemma for electricity production in our future.

PNM is a regulated monopoly, which means it is the sole provider of electricity in its service territory. The New Mexico Public Regulation Commission (PRC) is charged with oversight of monopolies to ensure New Mexicans get a fair deal and it is specifically required, by statute, to balance the interests of consumers, investors and the public.

Unfortunately, the process at the PRC seems to be moving away from one that is fair and balanced. This is evident in the RD for PNM's rate case and, if not corrected by commissioners, will have a huge bearing on our future.

Last fall, after several years of discussion and planning, the PRC approved a plan for PNM to close two of its four coal plants. That closure will reduce the plant's usage of coal, water and carbon emissions by fifty percent. In exchange for these environmental gains, PNM had to seek additional generation sources to replace the lost power. To maintain affordable, reliable service that is available 24 hours per day, PNM sought to diversify its energy portfolio to include more natural gas and nuclear energy. Solar and wind will help make up part of the lost generation, but they are unable to provide the round the clock service that we've all come to rely upon.

The problem with the RD in this case is that the Hearing Examiner disallowed all cost recovery for leases at Palo Verde Nuclear Generating Station. Electricity generated at Palo Verde is our most reliable, economical, carbon-free source of generation.

What is the true cost of the RD, if the PRC fails to set it aside and do the right thing for New Mexicans?

For starters, PNM would be faced with the unsavory decision of whether or not to sell its interest in Palo Verde to recover its costs.

Second, this bad decision would set precedence where PNM and other utilities in New Mexico would probably not invest in nuclear energy again for fear of not recovering all of the associated costs. In 2023, PNM will have the opportunity to purchase Palo Verde capacity that it is now leasing. PNM has stated it will not purchase any more leased capacity when opportunities arise, if this RD stands.

And what would fill the gap of lost nuclear power? It would have to be another type of base load generation, such as natural gas, because of reliability issues with solar and wind. Unfortunately, natural gas is also under attack by the G