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Category: Front Page News Front Page News
Published: 25 October 2015 25 October 2015

By Mary Alice Murphy

"Six gas and electric companies are part of the alliance," NM USA Executive Director Carla Sonntag told those attending the lunch at The Red Barn Restaurant in Silver City on Friday, Oct. 23, 2015. "Two are in Arizona."

"Always write your elected officials when you have concerns," Sonntag advised. "We, as an organization, are focused on the companies, but keep in mind that the shareholders are also paying customers. We're most cognizant of our customers. It is key to stay balanced between shareholders and customers."

She introduced elected officials in attendance, including Public Regulation Commissioner Sandy Jones, Lordsburg Mayor Arthur Clark Smith, Grant County Commissioner Ron Hall, Silver City Mayor Pro Tem Cynthia Bettison, Lordsburg Mayor Pro Tem Alfredo Morelos, Silver City Councilor Guadalupe Cano and Silver City Mayor Michael Morones. Sonntag also introduced PNM Senior Vice President of Public Policy Ron Darnell.

"I'm from the government and I'm here to help you," Jones started his speech to laughter in the room. "I'm also going to quote from Will Rogers. My dad was a huge fan of Will Rogers. Rogers said once: 'Thank God we're not getting the government we're paying for.'

"I have such great respect for Carla," Jones said. "When I was elected, she came by and what she said was; 'I know you're going to do the right thing.' She never tells us anything that isn't true.

"There are a lot of things we can talk about in regulation," Jones continued. "Regulation organizations are going through a revolution. We have a couple of big cases—landmark cases—before the Commission. They are being watched across the nation. I see a whole different group of intervenors now coming in to testify. We used to have mostly experts in the field with matter-of-fact testimony. Now suddenly we have private individuals from a myriad of special interest groups. We should expect that dialogue, but it's gotten to the point where the expertise level is much lower. Intervenors file a motion and then run to the media to try it in the news. Facts are seldom embellished in 10-second sound bites. It makes it difficult to have a casual conversation with someone when somebody takes a photo. We need to feel free to have those conversations. I fear some are going away. I feel good when I have a conversation with a county commissioner or with a PNM executive or with someone who has trouble getting a bill sorted out. I had a farmer call me. He was having trouble getting an electrical connection. I called PNM. They were receptive and fixed it.

"Your opinions are important," Jones said. "Despite the challenges in regulation and in the media, we'll put up with getting beat up by the media."

He said he was going to quote Will Rogers again, with a slightly off-color comment. Rogers said there are three types of men, "the man who reads, the man who thinks, and the man who pees on the electric fence."

Jones said after he was elected that Hall told him "to do the right thing, and you'll be fine."

Sonntag said it was a pleasure working with Jones, because his business sense changes the perspective. "I don't intervene in cases. I'm respectful of the commissioners. They are representing you. Their job is difficult if they don't hear from you. I work with executives who are open to answering questions if they can. We would like to come more often and have these conversations."

Darnell said PNM is really privileged to have Bruce Ashburn working here on behalf of the company. He also introduced Amy Miller, PNM director of community affairs in Albuquerque, Ruidoso, Alamogordo and Silver City.

"Carla is a straight shooter," Darnell said. "She's our best friend. We are not popular when we are raising rates, but she always listens to both sides."

Darnell said in 2018 PNM would file to comply with the Clean Power Plan. "We are working with regulators in the New Mexico Environment Department for a plan that doesn't choke business. We all want to provide reliable power at an affordable and environmentally responsible way."

"We are always replacing poles and developing redundancy," Darnell said. "We've spent $4 million in just the past two years. We want to be as much of a local public utility as we can. We would like to be more of a co-op. We invest in the community. For years, we have sponsored Mimbres Region Arts Council's Fine Arts Fridays, which have expanded to Lordsburg schools. We have participated in the Deming Duck Race. We have an employee that rides in the Tour of the Gila. We have Reduce Your Use grants for non-profits."

"In Deming, we had a teacher contact PNM with a request for her students to tour the energy facility next to the school," Ashburn said. "I met with the teacher and Luna County Economic Development. We toured the energy facilities next to the school and in Animas, we visited the geothermal facility and later the solar array. Yesterday, we had an arcing demonstration, showing what happens if lines cross or if a kite flies into the lines. We taught the students how to pay attention. We took 100 students in for this experience. They will tell their friends and families how to be careful. You don't have to touch lines to get an electric shock. It can jump.

"PNM's core values, the three Es, are economic development, the environment and education," Ashburn continued. "Contact me about doing some of these events."

Sonntag said the alliance talks about electricity and gas. "It's not terribly exciting, but reliability is important. Profit is not a bad word. We have to keep the utilities healthy."

She introduced Danny "Boone" Fisher, New Mexico Gas Company operations supervisor.

"I'm an old pipeliner turned into a supervisor," Fisher said. "I've been in the company 22 years, with the last 1½ years as supervisor. We serve Bayard, Hurley, Santa Clara, Silver City, Fort Bayard and farming areas in Luna and Hidalgo counties.

"Customer service is our No. 1 priority," Fisher continued.

He explained that a Canadian company, Emera, had bought TECO Energy, the parent company of NM Gas Co. "We're right in the middle of a PRC filing. TECO entered an agreement to be purchased for $10.4 billion, with the closing expected mid-2016. NM Gas will remain headquartered in Albuquerque. We will maintain the same wages and benefits. The combined filing by NM Gas, TECO and Emera was on Oct. 15, 2015, including provisions that NM Gas will maintain its name. Rates will be frozen through 2017. TECO will continue to own NM Gas for at least 10 years. It will increase economic development and charitable efforts to $800,000 a year. Emera will establish a board of directors for NM Gas, with representatives from Emera, NM Gas, TECO and community officials and members.

"I deal more with the county folks in Deming and Lordsburg, but I'm in the office here," Fisher said. "Call me, come by the office."

Sonntag noted that if one doesn't follow cases, they might not know that a company in a filing is limited in what it can say. "What Boone said was public information."

"Do you have questions?" she asked. "It's not every day you get a PRC commissioner here."

Smith said: "We appreciate having utilities offices in the local communities. If PNM closes its local offices, it will be hard on seniors."

"We have no plan to close the local offices," Darnell said.

Jones chimed in and said: "You lose five jobs in Albuquerque, you don't feel it. You lose five in Lordsburg, it's a significant impact. We are going through a lot with the telephone company, CenturyLink. As corporate offices move away, I tell them: 'You need a community presence. You need a sign on the baseball field. You need to go to Rotary club meetings. Those things are important to local folks. When people know you, they are not as likely to cuss you."

WNMU President Joseph Shepard said PNM is working to get computers in the Lordsburg campus. "It's important. That's what community partnership is about. You have become part of the community. You help out and we appreciate it."

Jones said: "You may send press releases to the local papers, but it's important for the commissioners to know what's happening, too. We got hammered on the radio. El Paso Electric is advertising and supporting Aggie football. There are those who think that's wrong. I explained that it's stockholder money, and we expect the companies to be corporate citizens."

"The piece of revenues called earnings is our business," Darnell said. "The board of directors decides how to spend the money. It pays executive bonuses and advertising. We look at the three Es. The giving is directed by the board of directors."

Ashburn said Darnell is a senior executive, but "he showed me a lot about PNM. He made it a priority to spend the better part of yesterday's event with a bunch of fifth graders. It makes people realize that senior leadership is as tied in as we are."

"I have a small pool of money," Fisher said. "I made the commitment that it goes to the kids for baseball, the county fair and kids' fair sales."

"I want to thank Sandy," Shepard said. "You care. You don't have to be here, but it's good how frequently you get out into the communities."

"The PRC doesn't have satellite offices, but we probably touch everyone," Jones said.

Miller said the company incentivizes employees to get out into the community. "If they make a donation, the company matches it. They serve on boards. If they volunteer a certain number of hours for an organization, the company makes a donation."

Smith said communication has expanded greatly since Ashburn has been part of the company. "We never had anything before Bruce. He is great."

Ansel Walters, Silver City resident, asked: "Due to the environmental directives, what direction will coal, natural gas, solar, nuclear and wind take and how will it impact profits? And when will solar come close to producing enough energy?"

"As far as coal goes, we are in good shape as a state environmentally with the Clean Power Plan," Darnell said. "We invested $320 million to cut pollution, especially particulate pollution, at the San Juan Generating Station. San Juan County has the second cleanest air in the country. As natural gas moves lower in price, coal will have to follow. In 2018, we will file two plans, one with coal remaining in the portfolio and one without coal. By 2018, we will know the price of coal. If we take out coal, we will need natural gas for reliability. For the first time, solar is proving to be cost-effective. If you put panels on sun trackers, you get 30 percent more value. We will be bringing on solar, with natural gas for peaking times. We invest in capital growth, which is a good thing for shareholders. Wind is a challenge. In New Mexico, it primarily blows at night and in off-peak seasons. We have some wind in our portfolio. We may see wind be developed to send it to California. We have more renewable energy available than we have customers. We need to send wind out of southeast New Mexico to California.

"The more we can invest in growing our asset base, because of growing the economic base, it will impact our revenues," he continued.

Jones pointed out that utility companies only get revenue from their investments.

"Do you take a return on investment in that case?" Walters asked.

"That is part of the rate case," Jones said. "When they bring the case, they bring the costs. They are entitled to 100 percent of proven costs by statute. Then the regulators look at future investments. This is how much it costs, and how it will be used, but it has to be useful."

Shepard asked who owns the transmission lines.

"The merchant lines are owned by the companies," Jones replied.

"Here in New Mexico, the lines are primarily owned by the utilities," Darnell said. "SunZia, proposing a private transmission line, will have to comply with the Federal Energy Regulatory Commission."

Darnell notes that PNM owns transmission lines, but it gets revenue from them, because 55 percent of them are used by partners. "There has been little to no investment in transmission. But the issue will have to be addressed."

Jones said the federal government sets the tariff rates. "As long as utilities are willing to pay the rate, then can use it as long as there is capacity. PNM is balancing its usage."

"If a merchant gets wind development and wants to ship it to California, PNM will have to do the investment on the transmission," Darnell said.

Scott Terry, Silver City-Grant County Chamber of Commerce director, asked Fisher if she sees any growth in the area.

"Growth is stagnant in Grant County," Fisher said. "The biggest growth is in Luna County farming in areas moving from electricity to natural gas. There are no new subdivisions planned here."

Sonntag said she appreciated all those who attended the luncheon.