lee gruber rsLee GruberBy Mary Alice Murphy

The regular monthly luncheon meeting of the Silver City-Grant County Chamber of Commerce took place Thursday, July 6, 2017, for members to hear updates on the upcoming Clay Festival and to hear about the PNM rate case.

Lee Gruber, Clay Festival founder and organizer, as well as co-owner with her husband David DelJunco of Syzygy Tile, said this was the sixth year for the Clay Festival.

 

"The intent is entrepreneurial," Gruber said. "Syzygy Tile is 25 years old. Clay is a metaphor to express the state of New Mexico. It's what holds us together."

She explained that the festival is much larger than just a group of potters. "It is an 8-day event. The idea is to bring people here to stay for longer than a few days. All the workshops are already full. Western New Mexico University, which has always been supportive of the festival, this year, has offered a credit course. Thirty individuals will take the course with a master ceramicist. This event is the signature event for the Silver City Arts and Cultural District, on whose board I serve."

"This year we have created a lecture series, 'Clay Matters,'" Gruber said. "Lectures will cover geology, rock art, archaeology, among other topics. The purchase of a $10 Clay Matters button will allow access to all lectures."

She noted that artists that come to lead workshops are paid. In addition, as a part of the festival, the Silver City Museum has an exhibit with photographs by Ann McMahon of "The Disappearing Mining History."

"It is an incredible exhibition of large photographs that show the mining history of the region," Gruber said. "Dr. Virginia McLemore, a geologist, will talk about the geology in Grant County. The county has examples of every era of geology. Two tours will go to Boston Hill. Rock art history will be led by Polly Schaafsma. Cynthia Bettison will give a lecture. An exhibit will feature Anthony Howell's landscapes. Another tour will feature rock art, and also a tour will take place at the Mimbres Heritage site. And we haven't forgotten children. The three public libraries—Silver City, Bayard and Gila— will have clay activities all week. Mud fun lets kids make whatever they want to out of clay. And don't forget the Mud Pie contest. This year, we will end with a Poker Tournament on July 29."

She said the poker tournament started when someone told her the best poker chips are ceramic.

This year's fundraiser will be a Farm to Table event at The Volunteer Center. It will seat 50 people at $100 each and will include wine pairings from Gruet, a New Mexico winery. Gruber said all the produce and meat will be locally grown and harvested. The meal will be cooked by local chefs.

For more information on the Clay Festival, visit www.clayfestival.com

ron darnell rsRon DarnellThe next speaker was Ron Darnell, PNM senior vice president. "I will explain the rate case and then I want questions from you."

Darnell said he and he family moved to New Mexico in 2008. "We have backpacked in the Gila. I must say that I never had poison ivy before the Gila. I need to find out what it really looks like for next time."

On the rate case, he wanted to hear concerns.

"We have to improve reliability in Cliff," Darnell began. "For 21 hours out of 40 hours last week, the area was without electricity. That is not acceptable. The feeder needs to be repaired."

He said misunderstandings had come from the last rate increase. "We said it would be less than a 2 percent increase, and it was for most users. However, some users saw an increase of well more than 2 percent. Deming didn't undergo the large increase, but Silver City was formerly served by Texas-New Mexico Power Company (TNMP), which had a flat rate. The stipulation when PNM purchased TNMP was that PNM would gradually increase the rate to be in balance with other customers."

The first block of usage up to 450 kilowatts of electricity has a rate of almost 8 cents a kilowatt hour (kWh), the second block is about 10 cents a kWh up to 900 kWh. Usage over 900 kWh costs 15 cents per kWh.

"We filed for an overall rate increase for a total of $99 million on Dec. 1, 2016," Darnell said. "The previous October and November case got bunched with this December case. The October and November case is still at the state Supreme Court."

He said PNM and some interveners wanted to settle the case. "The reason we filed the December increase was to finally conclude with the 2010 Environmental Protection Agency case."

The 2010 case addressed the haze problem around the San Juan Generation Station. "In 2010, the EPA said: 'You, PNM and the other eight owners have to put in $1 billion to solve the haze problem by Sept. 2016.' Actually, the EPA said $400,000, but it turned into $1 billion. The issue was embedded in the Clean Air Act, with the Regional Haze rule."

The rule aims to prevent haze in national parks and national monuments, and if it exists it must be mitigated. Sixteen parks or monuments are in the area around the San Juan Generating Station.

"The agreement culminated in that we would retire two San Juan units," Darnell said. "They will come down on January 1, 2018. To replace the energy, we will be bringing in 135 Megawatt hours of nuclear energy, an emissions-free resource from the Palo Verde Nuclear Power Plant in Arizona. We already owned part of the plant, but were just selling the energy.

"So $35 million of the $99 million is for regional haze compliance," Darnell said. "$9 million is for the power plant across the river from San Juan, the Four Corners plant, of which PNM owns a small part. It has retired three of its five units."

"$44 million is for compliance to keep the power plants running; $20 million for the backbone maintenance of the grid, which will address the major problem at Cliff," Darnell said. "Another $20 million is for loss of load. A utility is a fixed cost. The variable is fuel. When customers use less electricity, the fixed costs stay constant, but the denominator decreases. So we have to raise rates. The reason for loss is energy efficiency, some of which is driven by us. Whatever electric appliance you replace an older one with will be more efficient. The economy in New Mexico hasn't recovered. We sell less now that we did in 2007. Solar on residences takes off from our variables, but not our fixed costs."

He cited five miscellaneous changes to the rate increase. "We had a profit of 9.575 percent. We asked for 10.1 percent. We are very cognizant of increases in expenses. We have kept expenses flat. But if we don't have money to invest in the system, we will have more outages. If we have money to spend on maintenance, we prevent outages. The optimum amount we asked for was $99 million. We settled for $62 million. We will figure out how to live within our means. We have the obligation to provide power 24/7. We would rather settle than litigate. We will began to charge half of the $62 million starting Jan. 1, 2018 and the other half beginning on Jan. 1, 2019."

The average of electric bills in New Mexico is $80 a month, he said. "We have the lowest bills in the nation, even after the increase. We gave up on the 10.1 percent increase and kept the 9.575 percent profit."

Darnell said the Public Regulations Commission doesn't regulate profit. "This lunch comes out of this pot. Our reinvestment goes back into assets, and also dividends. People buy stock for dividends. If you can't pay dividends, no one will buy the stock. The executive pay comes out of the profit. Most, including charitable investments, comes out of the shareholder profit."

He said the interveners, who agree to the settlement, were the most diverse group ever. They included elected officials, environmental groups and consumer advocates. Some of them were the Albuquerque-Bernalillo Water Utility Authority, the Bernalillo County Coalition for Clean Affordable Energy, the city of Albuquerque, Krogers, the Attorney General, New Mexico Industrial Energy, the Sierra Club out of San Francisco, Walmart, Western Consumer Advocates and PRC staff.

"We sell the product as a variable cost," Darnell said. "The flat cost is about $7 per customer. The rest is variable."

He said at a meeting in Las Vegas a woman, who represented a group concerned about poverty, was upset, because PNM had proposed raising the flat cost from $7 to $13 and poor people didn't have that extra $6. "We kept in place the subsidization of residential customers. Commercial users subsidize residential customers."

Darnell said it is a three-part rate structure and "we have tried to collapse the structure, but if we do the bottom rate has to go up. The assumption is that low-income people use less. It's a huge issue. The PRC staff has to be fair to all, including the utility. We agreed to keep the three-part structure in place."

"Why did the environmental group agree?" he rhetorically asked. "We found it will be cost-effective to retire the other two San Juan plants in 2022. We will collect $3 million over the years, because of the economies around natural gas, due to fracking, which we've had for decades, and horizontal drilling. Coal generation cannot compete with natural gas. When the first two San Juan units go down, the impact will be our costs will be 40 percent less. Even on Jan. 1, 2018, the book value of the units goes to zero."

The bad part of this is that San Juan County will have nothing to tax against," Darnell said. "They are now looking at 2022 when the rest of the plant goes down. In 2031, the Four Corners plant will likely go down. It impacts the state budget, because the revenue from coal goes away in 2018 and the rest in 2022."

He said, by the rules, PNM can only look at costs of creating energy. "It doesn't take into account the loss of revenue to the region and the state. Our portfolio will be cleaner, but it will cause havoc to the economy in the Four Corners."

Another way to improve efficiencies is through Smart Cities, which includes city infrastructure, water and electricity.

"We have to figure out how to make the grid better," Darnell said. "Smart meters allow you to know where the problem is on the line. It can also offer time of use. It's a great way to manage bills. States that have smart meters, help low-income people know how much they are using and spending. PNM is the only Fortune 500 Company in New Mexico. We want to be seen as having responsibility to the customers we serve."

Rep. Rodolpho "Rudy" Martinez asked if PNM is required to use 20 percent renewables by 2020 and 30 percent by 2030.

"Yes, we will be able to meet that threshold," Darnell said. The cost cap is 3.5 percent. If we have that much renewables, we have to have enough natural gas so the plants run 24 hours. We are not there yet."

Martinez asked what percentage of the work force would be impacted by the loss of the two San Juan units.

"Most at the San Juan units will transition to retirement," Darnell said. "The job losses at the plant are not the issue. Three hundred-fifty jobs are going away at San Juan, but the loss of the mine will be 700 jobs. Coal-fired generation requires a lot of maintenance and capital expenditures. That is often supplied by contractors, so that loss will be significant."

"What about peak plants?" Martinez asked.

"The plant in Luna County is intermittent," Darnell said. "The one in Lordsburg is a peak plant."

Tom Vaughan asked about the use of geothermal energy resources.

"Animas has the only geothermal resources right now," Darnell said. "We pay a high cost for them at 20 cents per kWh. We like geothermal because it is always there, unlike wind and solar, but it's still expensive. "

He answered a question by saying that PNM meets its renewable requirement by owning 15 solar arrays and a contract with wind energy providers.

In announcements, Kevin Cook said Chino Mines would have a new manager, Chad Fretz. "We have full approval to build the Cobre Mine haul road. We will have an open house July 21 at the Hanover Outpost. And I wanted to congratulate Tom Vaughan for having a hummingbird photo that made National Geographic."

County Assessor Raul Turrieta said he has two openings in his office. And Saturday from 6-9 and Sunday from 1-4 would be auditions at WNMU's Parotti Hall for a talent show.

Sandy Feutz announced some art events, including a new exhibit at Copper Quail Gallery, with an opening reception on July 22 from 2-5 p.m. The Silver City Art Association will have an art walk on July 20, from 5-8 p.m. and entries to the Grant County Art Guild Purchase Prize annual show are due by Aug. 2. FeVa Fotos, owned by her and Vaughan, will have a show, "Silver City is a state of mind," in August.

Bea McKinney of the Silver City Museum Society announced the Silver City Museum is holding its 50th anniversary exhibit and will be partnering with the Clay Festival.

Bruce Ashburn said PNM grants would be decided toward the end of July. "We have ongoing projects with not-for profits. The money comes from the PNM Foundation."

 

 

 

Content on the Beat

WARNING: All articles and photos with a byline or photo credit are copyrighted to the author or photographer. You may not use any information found within the articles without asking permission AND giving attribution to the source. Photos can be requested and may incur a nominal fee for use personally or commercially.

Disclaimer: If you find errors in articles not written by the Beat team but sent to us from other content providers, please contact the writer, not the Beat. For example, obituaries are always provided by the funeral home or a family member. We can fix errors, but please give details on where the error is so we can find it. News releases from government and non-profit entities are posted generally without change, except for legal notices, which incur a small charge.

NOTE: If an article does not have a byline, it was written by someone not affiliated with the Beat and then sent to the Beat for posting.

Images: We have received complaints about large images blocking parts of other articles. If you encounter this problem, click on the title of the article you want to read and it will take you to that article's page, which shows only that article without any intruders. 

New Columnists: The Beat continues to bring you new columnists. And check out the old faithfuls who continue to provide content.

Newsletter: If you opt in to the Join GCB Three Times Weekly Updates option above this to the right, you will be subscribed to email notifications with links to recently posted articles.

Submitting to the Beat

Those new to providing news releases to the Beat are asked to please check out submission guidelines at https://www.grantcountybeat.com/about/submissions. They are for your information to make life easier on the readers, as well as for the editor.

Advertising: Don't forget to tell advertisers that you saw their ads on the Beat.

Classifieds: We have changed Classifieds to a simpler option. Check periodically to see if any new ones have popped up. Send your information to editor@grantcountybeat.com and we will post it as soon as we can. Instructions and prices are on the page.

Editor's Notes

It has come to this editor's attention that people are sending information to the Grant County Beat Facebook page. Please be aware that the editor does not regularly monitor the page. If you have items you want to send to the editor, please send them to editor@grantcountybeat.com. Thanks!

Here for YOU: Consider the Beat your DAILY newspaper for up-to-date information about Grant County. It's at your fingertips! One Click to Local News. Thanks for your support for and your readership of Grant County's online news source—www.grantcountybeat.com

Feel free to notify editor@grantcountybeat.com if you notice any technical problems on the site. Your convenience is my desire for the Beat.  The Beat totally appreciates its readers and subscribers!  

Compliance: Because you are an esteemed member of The Grant County Beat readership, be assured that we at the Beat continue to do everything we can to be in full compliance with GDPR and pertinent US law, so that the information you have chosen to give to us cannot be compromised.