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New Mexico’s largest electric utility was denied a rate rider that would have allowed it to collect millions of additional dollars from customers for allegedly exceeding what it was required to do under New Mexico’s Renewable Energy Act.
In a unanimous ruling issued by the state Supreme Court on Monday, the state’s high court rejected an appeal by the Public Service Co. of New Mexico, aka PNM, and upheld a decision by the state Public Regulation Commission.
Under the law, utilities are required to derive 20 percent of their retail electricity to come from renewable sources and increase to 40 percent in 2025, with additional benchmarks after that: 50 percent in 2030, 80 percent in 2040 and 100 percent by 2045.
The company had proposed in 2021 to retire renewable energy certificates, which are used to document compliance with the law, from 2022 to 2024 in order to exceed the law’s renewable requirements and qualify for the incentive. If permitted, it would have been claiming it reach the 40 percent standard in those years, sooner than is required by the statute.
The certificates can be “banked” for up to four years if they are not used in a given year, and then retired to meet renewable energy requirements for a particular year.
However, the court found, as had the PRC, that the company’s plan did not meet the requirements for an incentive, writing: “[The utility] seeks a reward— not an incentive — for renewable resources or energy that it already has produced or acquired beyond the REA’s demands.”
The company had sought a rate rider that would have allowed it collect $5.2 million from rate payers over three years. But the court ruled that "SPS’s supporting documentation showed that in 2020, it actually generated and purchased renewable energy in an amount that was substantially equivalent to its RPS obligation — twenty percent of its retail electricity sales.”
The ruling also upheld the PRC’s order changing the rules for administrating the law, including financial incentives used to accelerate utilities’ transition to renewable energy.
