November18, Commissioner Karen L. Montoya, Chairperson ...nmprc.state.nm.us/docs/older docs/11-18-15...

TIME: 9:30 a. m.

MINUTES OF THECASE MANAGEMENT OPEN MEETING

NEW MEXICO PUBLIC REGULATION COMMISSIONNovember 18,

201~~ PLACE: PERA Building

4th Floor Hearing Room1120 Paseo de PeraltaSanta F~, New Mexico 87501

A quorum was present as follows:

Members Present:Commissioner Karen L. Montoya, ChairpersonCommissioner Lynda Lovejoy, Vice-ChairpersonCommissioner Valerie EspinozaCommissioner Patdck H. LyonsCommissioner Sandy Jones

Members Absent:

Staff Present:Andrea Delling, Interim Chief of StaffMargaret Caffey-Moquin, Acting General CounselJudith Amer, Associate General CounselRussell Fisk, Associate General CounselRick Blumenfeld, Associate General CounselCarolyn Glick Hearing ExaminerBruno Carrera, Utility Division DirectorBryan Brock, Transportation Division DirectorPatrick L6pez, Legal Division DirectorAvelino Gutierrez, Legal DivisionCados Padilla, Public Information OfficerJohn Standefer, State Fire MarshalVernon Muller, Deputy State Fire MarshalMichael Ripperger, Telecommunications Bureau ChiefGeorgette Ramie, Telecommunications Bureau

Others PresentCarl Boaz, Stenographer

Minutes of the Case Management Open Meeting November 18, 2015

CALL TO ORDER

The Case Management Open Meeting was scheduled at 9:30 a.m., pursuant to proper notice underNMSA 1978, 10-15-1(c), and the Commission’s Open Meeting Policy. Commissioner Karen Montoya,Chairperson, called the Case Management Open Meeting to order at 9:30 a.m., in the Fourth Floor HearingRoom, PERA Building, 1120 Paseo de Peralta, Santa F~, New Mexico.

A copy of the sign-in sheet for the Case Management Open Meeting is incorporated herewith to theseminutes as Exhibit 1.

A copy of the Agenda for the Case Management Open meeting is incorporated herewith to these minutesas Exhibit 2.

A copy of the Public Comment sign-in sheet for the Case Management Open Meeting is incorporatedherewith to these minutes as Exhibit 3.

1. PLEDGE OF ALLEGIANCEISTATE PLEDGE

2. INTRODUCTION OF SPECIAL GUESTS

State Fire Marshal John Standefer introduced his deputies Randy Barela and Vernon Muller. Hedescribed the accomplishments of the Albuquerque Fire Department for achieving ISO class 1 status.

Chief David Downey introduced his three deputy chiefs who were present. He thanked Deputy MarshalBarela and Deputy Marshal Muller and others for their training, guidance and leadership in helping theAlbuquerque Fire Department achieve the ISO 1 rating. He said the Mayor is excited about the ISO score andhas emphasized the economic development impact this will have.

Commissioner Jones left the bridge and arrived in person at 9:39 a.m.

Commissioner Espinoza congratulated them on their achievement. She commended them for coming upto such a high standard and ensuring that everyone is safe and for setting the example for the rest of thestate.

Commissioner Lyons, Chairperson Montoya, Commissioner Jones, and Commissioner Lovejoy alsocongratulated them.

3. CONSIDERATION AND APPROVAL OF THE AGENDA

Commissioner Espinoza asked to postpone 15-00196-UT, item 4 until next week due to the late receipt.

Commissioner Jones asked to discuss item b under Executive Session, Supreme Court Case No. 35-377


in open session.

Ms. Amer said this matter involves litigation with PNM and SPS and some things might be privilegedcommunications.

Commissioner Jones said the other Commissioners should weigh in, but the record is clear and open.

Commissioner Espinoza agreed and said she was sure Ms. Amer would be discreet as to what could besaid.

Ms. Caffey-Moquin clarified for the minutes that when Chairperson Montoya invited the Commission toweigh privilege, that is only to the discussion that could take place in open session.

Chairperson Montoya requested a lunch break from 12:30 to 1:30 before the hearing, if the Commissionwas not finished.

Commissioner Jones asked if the Commission should also move the transportation case ahead of theclosed session. Commissioner Lyons suggested moving item 8 b to the first regular action item (EMS) and 8a, 6 to the last regular action and combine 7b with 8 a, 6.

Chairperson Montoya confirmed the changes to the agenda: Case #15-00196 complaint against CenturyLink; pull the Supreme Court Case 35-3377 out of Executive Session and put ahead of the closed sessionand the last regular action would be Case #14-00332 UT and 6 a would be combined with 7bo

Commissioner Jones moved to approve the agenda as modified. Commissioner Espinozaseconded the motion and it passed by unanimous (5-0) voice vote.

4. CONSIDERATION AND APPROVAL OF MINUTES

¯ Minutes of Case Management Open Meeting of October 28, 2015

Commissioner Espinoza moved to approve the minutes of October 28, 2015 as presented.Commissioner Jones seconded the motion which passed by unanimous 5-0 voice vote.

5. CONSENT ACTION. There were no cases

6. REGULAR ACTION AND DISCUSSION

B. Transportation Matter:

7) AMBULANCE ADVISORY COMMITTEE REQUEST FOR RE-APPOINTMENT OF COMMITTEE


MEMBERS(Bryan Brock & NM EMS Bureau) Resolution

Mr. Brock came forward and introduced EMS Bureau Chief Kyle Thornton who works out of theDepartment of Health. He said Chief Thornton had an important request on behalf of the Ambulance AdvisoryCommittee.

Chief Thomton said the Ambulance Advisory Committee wanted to thank the PRC for resurrecting theAdvisory Committee. He thanked Mr. Brock for his professionalism and his great staff working with the EMSBureau around the state.

He explained that the Ambulance Advisory provides input from stakeholders around the state as to theoperations of transport ambulances, as well as other EMS issues. The current committee is made ofrepresentatives representing different aspects of volunteer, paid, career, private and public stakeholders.

Chief Thornton said they are requesting the current member’s terms be extended for one year, at whichtime they will provide a slate of names to the Commission for consideration for the future.

Commissioner Lyons moved to approve Resolution 11-18-18. Commissioner Espinoza secondedthe motion and it passed by unanimous (5-0) voice vote.

1)

A. Utility Matters:

15-00343-UT SOUTHWESTERN PUBLIC SERVICE COMPANY=S APPLICATION FOR: (1)AUTHORIZATION TO FORM A SUBSIDIARY; (2) AUTHORIZATION TOCONTRIBUTE CERTAIN TRANSMISSION ASSETS TO THE SUBSIDIARY; (3)AUTHORIZATION TO SELL ITS INTEREST IN THE SUBSIDIARY TO XCELENERGY SOUTHWEST TRANSMISSION COMPANY, LLC, (4) APPROVAL OFAGREEMENTS WITH AFFILIATED INTERESTS; (5) DETERMINATION THATXCEL’S CHARGES TO SPS UNDER THE SPP OATT ARE ELIGIBLE FORRECOVERY IN SPS--S NEW MEXICO RETAIL RATES; AND (6) OTHERRELATED RELIEF.(Judith Amer) Order

Ms. Amer presented information regarding this matter to the Commission. She said the matter comesbefore the Commission upon SPS’s application for approval to form a subsidiary.

Ms. Amer reviewed the two Orders: to appoint Ashley Schannauer as HE and enter an Order that grantsSPS a protective order. The order would involve SPS forming a subsidiary called Hitchland Lamar LLC.

SPS will contribute transmission assets they own located in Oklahoma and Kansas to the subsidiary.


SPS will sell its interest in Hitchland Lamar to XCEL Energy Southwest Transmission Company (XEST) as awholly-owned subsidiary. Hitchland Lamar will merge into XEST and XEST will assume all of thetransmission assets of Hitchland Lamar.

SPS requested the Commission approve a fifth amended General Diversification Plan and anadministrative services agreement between XEST and SPS. SPS also requests permission to recover inretail sales, the wholesale transmission charges attributed to the assets owned by XEST on the same termsand extent that SPS recovers other charges under the SPP.

Commissioner Espinoza asked clarification of "recover the charges" and whether that would come fromprofit.

Ms. Amer said it would be under the same terms and conditions allowed under the OATT (Open AccessTransmission Tariff). She said she didn’t know those terms, but the HE would receive testimony on that.

Ms. Amer said in addition, SPS filed a standard order for protection that does not grant confidentiality toany agreements. The order merely sets a procedure for exchanging confidential documents.

Commissioner Lyons said he liked both Orders. He said they need to know if some of the costs will bepaid by the SPP rather than SPS rate payers.

Commissioner Espinoza asked Ms. Amer to explain the merger and how the assets would be contributedto Hitchland Lamar. She asked if the ratepayer would get hurt in the process.

Ms. Amer said the details are not yet totally developed. She said she did not have a full understanding ofwhy Hitchland Lamar will be created to transfer assets that merge with another corporation. She said theremight be a valid reason, but that raises questions.

She said in terms of how it affects the customer, SPS is asking to have the costs recovered in retail salesaccording to the same terms they recover charges under the OATT. That would need to be determined by theHE.

Commissioner Lyons moved to approve the Order to approve Ashley Schannauer as the HE andthe motion to grant the protective order. Commissioner Lovejoy seconded the motion and themotion passed by unanimous (5-0) voice vote.

2) 15-00166.UT IN THE MATTER OF PUBLIC SERVICE COMPANY OF NEW MEXICO=SRENEWABLE ENERGY PORTFOLIO PROCUREMENT PLAN FOR 2016 ANDPROPOSED 2016 RIDER RATE UNDER RATE RIDER NO. 36(Carolyn Glick) Recommended Decision(Rick Blumenfeld) Order

Ms. Glick began the presentation. She said PNM seeks approval of its Renewable Energy Plan For2016 and proposed proviso for renewable energy rider. She has listed the parties in the case in one of her


memos and exceptions had been filed to parts of her RD. She said PNM is not seeking approval of any newrenewable energy procurements as it expects to meet its 2016 RPS (Renewable Portfolio Standards).

Chairperson Montoya asked if this should be the 2015 RPS. She said she didn’t know there is a RPS for2016, it was 2015 and 2020.

Ms. Glick said PNM received approval for their 2015 RPS last year. Now the RPS percentage haschanged and is 15% for 2015 through 2019 and in 2020 becomes 20 percent. No parties objected to PNM notproposing additional procurements and PNM expects to meet all diversity requirements in 2016. Sheexplained that the RPS is the amount of renewable energy resources that a utility must include in its energysupply portfolio and is measured in megawatt hours. She has concluded that PNM’s RPS requirement for2016 is $1,104,886 MWH or RECs.

A disagreement on how to calculate the RPS was put to rest by the New Mexico Supreme Court thatcame out after the hearing bdefs were filed. There were no parties that filed exceptions to herrecommendations to the RPS requirements.

PNM is not required to incur the Reasonable Cost Threshold (RCT), when the cost of renewable energyexceeds the RPS. The RCT is 3% of the plan year total revenues. The purpose of the RCT calculation is toproject whether the cost of the utilities renewable energy procurements for the plan year would be more than3% of total revenues for the plan year. PNM’s 2016 RCT is $28,455,417 and the 2016 renewable energyplan revenue requirement is $19,242,675 or 2.1% of the plan year revenues and lower than the 3% RCT.

Ms. Glick said no party filed exceptions to her recommendations on the RCT.

She said PNM is requesting approval to increase their rider rate and most of its cost is collected throughthe renewable rider. Currently the rate is $.569.66 cents per kWh and it seeks an increase effective January1, 2016 to recover costs incurred for the year to comply with the RPS. The proposal rate would be increasedto $.59442 cents per kWh. An average PNM residential customer that consumes 600 kWh per month has acurrent charge of $3.42 and if increased would go up to $3.57. No party objected to the proposed rate.

Ms. Glick noted that if the PRC eliminated the benefit to Large Capped and Exempt customers, the riderrate would decrease to $0.56654 per kWh. The average residential customer’s charge would decrease to$3.40.

Ms. Glick said the disproportionate avoided fuel benefit for Large Capped and Exempted customers wasa disputed issue and the most significant. The REA (Renewable Energy Act) states the amount of renewableenergy procured for certain large non-governmental customers is capped, so additional cost to meet the RPSdoes not exceed each cap.

Ms. Glick said a utility’s RPS requirement is reduced to reflect the Large Capped customer and isundisputed that those customers receive what is referred to as a "disproportionate avoided fuel benefit(DAFB)."

She explained that fuel savings that result from the procurement of renewable energy flows through


PNM’s FPPCAC and the savings to Large Capped customers is therefore not capped. The Large Cappedcustomers receive a DAFB equivalent to the amount of total renewable energy they use even though they donot contribute proportionately to the cost of renewable energy that produces the benefit.

PNM estimates that in 2016 its 25 Large Capped customers will pay 2.35% of PNM’s 2016 renewableenergy procurement cost, but will receive 12.5% of the DAFB attributed to those procurements. The LargeCapped customers will receive a benefit of $1,866,321, but would only receive $351,297 in DAFB if they wereto receive proportionate to their payments for RPS compliance. The undisputed amount estimated is$1,515,024 DAFB to Large Capped customers in 2016.

Ms. Glick reviewed a diagram she passed out. She said the total collected amount from the renewablerider in 2016 is $42,431,508. The amount paid by the three groups of customers show that Exempt customerspay zero; Large Capped customers pay 2.3% and other customers pay $41,435,235.

The renewable energy purchases projected to result in total offsetting fuel savings is $14,961,820. Thefuel savings projected for Exempt customers is 2.8%, even though they contribute zero and 12.5% for LargeCapped customers. Other customers are $12,666,754 or 85% of the benefit, even though they pay 97% ofthe cost of producing the savings.

Large Capped Customers earned and unearned totals for offsetting fuel savings shows the amountactually paid is $351,297, but they receive additional fuel savings from amounts they do not pay (unearned) inthe amount of $1,515,024.

Ms. Glick noted the handout "Large Capped Customers" lists PNM’s Large Capped 2016 customers andshows Customer A will pay $110,479 toward the RPS compliance, but absent the cap would pay $3.1 million.The result of earned fuel savings is $39,000 and the unearned received is about $838,000; about $766,000less because of the Renewable Energy Act. She said all of the customers pay less under the REA thancustomers would otherwise.

Ms. Glick said last year the PRC required PNM to identify a method of eliminating the DAFB. PNM’smethod would eliminate the DAFB through the rider and decrease the amount collected from Large Cappedcustomers by $1,515,024. PNM would collect that back from those customers through the rider.

She said PNM’s witness testified that the DAFB exists for Large Capped and Exempt customers, butPNM takes no position on whether the DAFB should be eliminated. NMIEC’s witness expressed no opinionregarding whether the DAFB exists, but argued if the PRC considers eliminating it they should do so throughPNM’s next general rate case, which was not filed at the time of the testimony. The witness argued thateliminating the DAFB through the rider would be piecemeal rate making.

Staff agrees that the DAFB exists but opposes the method identified by PNM as not rigorous enough forrate making purposes. The CCAE (Coalition for Clean Affordable Energy) and WRA (Western ResourcesAssociation) support PNM’s identified method.

Ms. Glick said she found that PRC should adopt PNM’s method for elimination. She said the DAFB is awindfall for Large Capped customers and not only are they not paying the amount they would pay absent the


cap, but are receiving unearned fuel savings, which is not intended. The REA states that the amount ofrenewable energy procured for Large Capped customers is capped, so "the additional cost" of meeting theRPS to these customers does not exceed their cap. He said the legislature’s use of additional cost indicatesthat Large Capped customers pay some additional costs for PNM’s cost to comply with the RPS, not that theypay less.

Ms. Glick said NMIEC’s argument that Large Capped customers would be subjected to an additionalcharge is wrong and misleading. This would simply eliminate an unfair benefit they should not receive andreturn that amount to customers who pay for the cost that results in that benefit.

She pointed out that the PRC general policy against piecemeal rate making does not apply because 1)the PRC has approved PNM’s rider over piecemeal rate-making objections and 2) eliminating the DAFB isnarrowly related to the cost of renewable energy paid for by the Large Capped customers through the rider.

Ms. Glick said her recommendation to eliminate the DAFB for Large Capped customers is the subject ofexceptions. Under the REA, an eligible customer owning renewable energy generation is exempt from payingRPS compliance costs for a year if they certify they will expend 2.5% of that year’s projected electricitycharges. PNM has received certifications of exemption for the ABCWUA (Water Authority) and UNM(University of New Mexico) for 2016.

Ms. Glick found that Exempt customers receive the same unearned fuel benefit as Large Cappedcustomers and pay nothing toward renewable energy cost. She recommended the PRC eliminate the DAFBfor Exempt customers as well. She ordered PNM to recalculate its proposed rider rate to eliminate the DAFBfor both Large Capped and Exempt customers and re-circulate the calculation to the parties. Therecalculation would then be admitted into evidence subject to reconsideration based on any objections.

Ms. Glick said PNM Exhibit 11 projects in 2016 that one Exempt customer will receive a DAFB of$237,665 and the other $191,080. The ABCWUA and NMIEC representing UNM filed an objection of PNMExhibit 11. They claimed the two Exempt customers received no legal notice that the PRC might eliminate theDAFB for them. They argued that she was in violation to be fair and impartial by ordering PNM to do the ratecalculation.

Ms. Glick denied the objections. She found ample evidence that the PRC might eliminate the DAFB forExempt customers and discussed that at length in her RD. She found that the DAFB is unfair and a windfallfor Exempt and Large Capped customers and that the public interests requires the elimination of that benefit.

Ms. Glick said the Exempt customers’ argument that eliminating the DAFB would subject them to acharge is wrong. Under her recommendation, Exempt customers would be returning money they are notentitled to. And because of her recommendation to eliminate the DAFB for both Large Capped and Exemptcustomers, she recommended the PRC approve a decrease in the rider rate of $2.56654 per kWh~

She said this case revealed a lot of inconsistency in calculating the RPS and RCT among PNM, SPS andEPE. She recommended that her RD and PNM’s Final Order be served on SPS and EPE and that they begiven notice, going forward, that each is to follow the PRC’s rulings regarding calculation of the RPS andRCT, or show good cause why they are not complying. She attached a proposed notice to SPS and EPE to


her RD, which is also subject to exception.

Chairperson Montoya commented that Ms. Glick, as always, did an excellent job.

Commissioner Espinoza said UNM and ABCWUA produced evidence that said they did not receive legalnotice and Ms. Glick denied their objections because she had evidence they had. She asked how the Exemptcustomers were notified and where the evidence is that the PRC did notify them.

Ms. Glick said it is on pages 44-58 of her RD. She said the PRC stated in last year’s case they woulddefer action on whether to eliminate DAFB to Large Capped and Exempt customers. PNM filed directtestimony in the case and stated the benefit existed for Exempt as well as Large Capped customers. She saidMr. Carrara filed direct testimony that said the same thing. She said most significant was that both attorneysfor UNM and NMIEC asked questions on cross examination regarding how the benefit would be calculated,so they opened the door.

Mr. Blumenfeld added that the evidence is summarized on page 56.

Commissioner Lovejoy asked if avoided costs meant only avoided costs, or if it is capacity costs.

Ms. Glick said it refers to the avoided fuel costs resulting from the use of renewable energy only, notenvironmental costs.

Commissioner Lyons said in the second handout on page 2 there is a loss of $2,870 and on the next pagethe Exempt customer is aboutthe same amount of $23,000, but has a benefit of $3,792. He asked why thereis such a discrepancy.

Ms. Glick said column 3 shows the added costs each would pay absent the cap. She explained that onecustomer is getting a greater DAFB fuel savings and therefore a greater net benefit.

Commissioner Lyons understood but the amount paid is about the same. He asked why it is different inthe first two columns if it is the same amount paid for renewable energy.

Ms. Glick said it is the result of each company’s energy use amount. The capped amount is either thelower of 2% of a customer’s annual electricity charges or $110,479, the lower of 3 percent. The more theLarge Capped customer uses, the greater the avoided fuel benefits. The difference in the last column isbecause one customer is paying more, absent the cap, and receives a greater benefit.

Commissioner Lyons thanked Ms. Glick for her work. It is a very complicated issue and she put her heartinto it.

Commissioner Lovejoy asked the staff’s position on this.

Mr. Blumenfeld called the Commission’s attention to paragraph 18 of the Final Order on page 9 thatstates NMIEC claims the HE "misconstrues the evidence, falsely implies that PNM supports the notion thatthe Large Capped and Exempt customers receive a windfall that should be repaid," and does not "understand


either NMIEC’s positions or the evidence in this case."

He asked the Commission to note the language. He said he finds that language not just inappropriate, butoffensive. It is offensive to claim that any of the six HEs are lying to the Commission; it is beyond offensive, itis rank.

Mr. Blumenfeld said the record shows (paragraph 18) that the HE understands NMIEC’s positions andthe evidence. He said the Commission agrees with the Rejoinder to NMIEC’s claims in CCAE’s and WRA’sJoint Response to exceptions at page 4. The response says NMIEC further argues that the Hearing Examinermisconstrued the evidence in this proceeding and that Ms. Glick falsely implies that PNM supports the notionthat Large Capped and Exempt customers receive a windfall that should be repaid.

It is NMIEC who misconstrues the RD. The HE was addressing the issue of whether the disproportionatefuel benefit exists, not the issue of whether something should be done about it. Ms. Glick correctly concludedthat PNM recognizes that Large Capped customers are receiving a disproportionate fuel benefit. She is alsocorrect that NMIEC did not present any evidence showing that the DAFB does not exist. There is no falseimplication that PNM was taking a position on whether it should be eliminated. NMIEC is simply attempting toconfuse the issues by conflating the two.

Mr. Blumenfeld returned to the start of the Order. He said in paragraph 1 he recommends that thestatement of the case, discussion, all findings and conclusions contained in the RD and the errata notices arehereby incorporated by references as set forth in the Final Order, and are adopted, approved and acceptedas findings and conclusions of the Commission except as otherwise indicated in the Final Order.

He said Staff and AG’s exception #2 and NMIEC’s exception #3 states: "The Commission should rejectthe RD’s Exhibit 1 notice to EPE and SPS which stated that in their 2016 Renewable Energy Plans SPS andEPE shall comply with the rulings in this case as to calculating the RPS, the RCT and eliminating the DAFB orshow good cause why they should not comply."

Mr. Blumenfeld said these exceptions are well taken and the Commission should reject the RD’s Exhibit1.

Mr. Blumenfeld said it is well settled that the fundamental requirements of due process in anadministrative context are reasonable notice and an opportunity to be heard and present any defense orclaim. Neither SPS nor EPE had notice that their rights would be directly affected by the outcome of this case,and neither of them was a party.

Mr. Blumenfeld continued that although well-intentioned, the HE went too far in requiring compliance withthe rulings herein, or for a show of good cause when neither EPE nor SPS had the opportunity to be heard "ata meaningful time and in a meaningful manner." Nonetheless, parties cite Commission Orders as precedentand this case’s rulings may be cited as precedence. The Commission’s rulings in this case could be used asguidance in calculating appropriately the RCT and RPS and eliminating the DAFB in future cases. That is, ifthe Commission agrees as stated repeatedly in the RD that"to the extent possible consistency in applying theREA among the three investor owned utilities is desirable." To that end nothing prevents any HE or theCommission in future cases from requiring EPE or SPS to perform the same calculations performed by PNM


in this case, as noted at page 9 of the Joint Response of WRA and CCAE.

Mr. Blumenfeld said the ideal solution, to ensure that all three utilities are treated consistently, would be arulemaking. He said the HE cited no authority to support Exhibit 1 and to apply the rulings or to apply or showto EPE or SPS why they should not be applied. No laws or case was cited in support of Exhibit 1.

Mr. Blumenfeld said he recommends that those exceptions be granted.

Mr. Blumenfeld said on NMIEC’s Exception #2 and the Water Authority’s Exception #1; the Commissionshould strike PNM’s post-hearing Exhibits 9, 10, and 11 whose admission violated their right to due process.These exceptions repeat what NMIEC and the Water Authority stated in their joint objections to the posthearing exhibits filed on September 17.

Mr. Blumenfeld said the RD at pages 45-56 has already thoroughly and correctly rejected theseexceptions and the Commission should also reject them. The HE at the end of the hearing on September 2instructed PNM to recalculate the RPS and RCT using SPS’s method, and to revise its method for eliminatingthe DAFB as to both Exempt customers- the Water Authority and UNM and Large Capped customers likeNMIEC’s other members. The HE told PNM to provide the parties with these figures prior to filing them asPNM exhibits.

Mr. Blumenfeld said objections to the exhibits could be made in post heating briefs. Objections to thecalculations could be resolved before the brief was filed. In response to a question from WRA’s counsel, theHE also said she considered her instruction to PNM to be similar to an instruction to a utility following ahearing in a rate case to make a compliance filing based on the HE’s findings on cost of service and ratedesign.

Mr. Blumenfeld said the HE anticipated that any objections to the exhibits would be directed to themathematical calculations and could be resolved before the exhibits were filed. He said Ms. Glick directedthat"if there is some question about a calculation that I haven’t addressed explicitly, you should email me andI will tell you how to do it".

He said counsel for NMIEC and the Water Authority objected at the hearing to the inclusion of the ExemptCustomers in the DAFB calculation, but not to the RPS and RCT recalculations. The PNM exhibits were to beadmitted into evidence "subject to reconsideration based on any arguments in the post hearing briefs."

Mr. Blumenfeld said that on September 11, PNM filed Exhibits 9, 10 and 11 accompanied by thisstatement: On September 8~ PNM circulated the draft of this filing to the parties in this case for review andcomment. PNM received the comment from staff and it appeared the Exhibits were prepared consistent withthe HE’s instructions. No comments by any other party were received.

Mr. Blumenfeld said the RD on page 56 correctly noted that "NMIEC and the Water Authority did notobject to PNM’s calculations in the key exhibit, Exhibit 11 recalculation of the renewable rider rate usingPNM’s identified method to eliminate a DAFB to both Large [Cap] customers and Exempt customers." TheABCWUA claims that Exhibit 11 contains new evidence and calculations without notice and with "noopportunity to conduct discovery, make legal arguments or in any way challenge the introduction of this new


evidence short of filing post hearing motions, briefs and exceptions."

Mr. Blumenfeld likened this to having 15 vegetables in a box, 7 are carrots and the rest onions. He askedhow many onions are in the box. He said using subtraction and 15 vegetables minus the 7 carrots leavesthem with 8 onions. He said that is what had been going on in this case.

Mr. Blumenfeld said to put this in another way, at the hearing PNM’s counsel said to take the facts thathave been placed in evidence subject to cross and present them in a different form. He said he thought it ismostly mathematical and if there are objections to the math there should be a way to do that. He said if it goesbeyond what is in evidence, a party has the right to ask that it be either excluded or have an opportunity tocross-examine.

He said, for example in regard to the DAFB, they are saying to use the method they have been using forthe cap customers and add these exempt customers and do a presentation with that. He said there is nothingnew here.

Mr. Blumenfeld said on the bottom of page 7, NMIEC’s Exceptions #1a and #1c; the DAFB, if it exists,should not be eliminated as to Large Capped customers. NMIEC claims the DAFB should be addressed inthe general rate case not in this case, to avoid piecemeal rate-making.

He said when the Commission first approved PNM’s renewable energy rider in case 12-007-UT theCommission rejected a claim of piecemeal rate-making in the Final Order, August 14, 2002, paragraph 5:Piecemeal rate-making allows a utility to increase revenues without showing that they are necessary to eama reasonable return. That is, it is a change in rates for one item while ignoring all other costs of serviceelements. It is not barred by law, but the Commission has a policy discouraging it.

Mr. Blumenfeld said the Statute 62-16-6A states in part: A public utility that procures or generatesrenewable energy shall recover through the rate making process the reasonable cost of complying with theRPS. He said the law requires that PNM recover these costs whether by rider or in a rate case. Other costsavings are irrelevant.

Mr. Blumenfeld said in both its exceptions and response to WRA’s exceptions, NMIEC refers to theelimination of the DAFB as a rate increase or an additional charge. It is neither. The RD at page 41 accuratelydescribes these claims as incorrect and misleading. NMIEC’s claim is akin to that of a utility customer that hasnot been billed for service for three months and is properly back billed for the unpaid amount and thenannounces, "Whoa! The utility has increased my rates." He said they were not paying what they weresupposed to be paying so they back billed them.

He said in addressing the elimination of the DAFB for Large Capped customers, the parties and the HEanalyze the Statue 62-16 4A2 amended in 2007. That statute does not address or mention the DAFB, butthere is no dispute that it exists. WRA’s post hearing brief at page 7 said the DAFB issue exists regardless ofhow the Commission interprets additional costs. The AG and staff’s response to exceptions say, "Contrary toNMIEC’s assertion whether there is a DAFB or not is not a matter of statutory interpretation." The statute issilent.


Mr. Blumenfeld said the Commission can act to eliminate the DAFB. NMIEC disagrees and says thestatute does not authorize the Commission to correct the DAFB and the legislature did not intend that LargeCapped customers pay more than they currently do.

Mr. Blumenfeld said the legislature did not intend to create the windfall that is the DAFB, so it cannot beargued that the legislature did not intend that the windfall be eliminated by the Commission. He said thiswould not mean that PNM would be increasing the Large Capped customers’ rate or charging them above thecap. Stated another way, NMIEC is correct that the Attorney General vs. New Mexico Public RegulationCommission 2015-NMSC-032 confirms the "cost protection of Section 62-16 4 A2."

He said however, the case like the statute is silent as to eliminating the DAFB. The Supreme Court didnot bar the Commission from ordering that it be eliminated. He said just because the Commission may act toend the DAFB does not mean it is required to do so.

Mr. Blumenfeld said as stated by PNM witness O’Connell, the legislature’s creation of the cap to serve asa customer protection mechanism is quite different from the reality of some customers receiving a windfall.He said "Cap customers should not receive fuel savings associated with renewable energy that they do notpay for."

Mr. Blumenfeld said CCAE and WRA joint response on page 3: the elimination of the DAFB does not leadto an absurd result as claimed by NMIEC. Eliminating the DAFB for Large Capped customers is consistentwith the Public Utility Act (PUA) which requires the Commission to balance the interests of the public,customers and PNM to achieve a fair, just and reasonable result.

Mr. Blumenfeld said the next set of exceptions is listed at the bottom of page 12. NMIEC’s Exceptionsnumber lb, ABCWUA’s Exceptions numbers 2 and 3 and the lone exception filed by WRA and CCAE. Hesaid the DAFB should not be eliminated as to Exempt customers.

Mr. Blumenfeld said the Commission should reject these exceptions. Eliminating the DAFB in this casewould not be piecemeal rate making.

Mr. Blumenfeld said in addressing the elimination of the DAFB for Exempt customers the parties and theHE analyzed Section 62-16- 4 A3 amended in 2014. He said this contrasts with the previous statute as toLarge Capped customers, which stated "on and after January 1, 2006 the kilowatt hours of renewable energyprocured for the Large Capped customers shall be limited so that the additional cost of the RPS to eachcustomer does not exceed the lower of 1% of that customer’s annual charges or $49,000." That has beenadjusted as the years go by for inflation.

He said in the response to exceptions on page 2, CCAE and WRA assert that the use of the termadditional cost indicates the legislature’s intent that "Large Capped customers pay some additional costtoward the cost of PNM’s compliance with the RPS". He said its absence from 62-16-4 A3 means Exemptcustomers are not to pay such costs. Like 62-16-4 A2 for Large Capped customers and 62-16-4 A3 forExempt customers does not mention or address the DAFB, nor bar the Commission from eliminating theDAFB for Exempt customers, just as the Commission should for Large Capped customers.


Mr. Blumenfeld said this argument was addressed by the RD on page 57: "Eliminating a windfall does notresult in charging Exempt customers for cost of PNM’s RPS compliance; it removes credits that Exemptcustomers are not entitled to in the first place. It eliminates unfairness because PNM’s Exempt customers donot pay for any of the cost of PNM complying with the RPS. They, like Large Capped customers, should notreceive fuel savings resulting from other customers’ payment of that cost."

Like NMIEC throughout its exceptions, ABCWUA refers to the elimination of the DAFB as a new chargeor rate. It is neither. It would serve to return the amount of the Exempt customers unearned avoided fuelcosts to PNM’s small uncapped and nonexempt customers, you and me; money to which the Exemptcustomers are not entitled.

Mr. Blumenfeld said those opposed to the elimination of DAFB for Exempt customers argue it will removethe incentive in the statute for large governmental entities and universities to "expend 2 ½% of that user’sannual electricity charges to continue to develop within 24 months’ customer owned renewable energygeneration." He said it will not do so.

He said according to ABCWUA it has spent approximately $20 million in the past two years on renewableenergy projects. According to PNM the Water Board’s DAFB is $237,665 (PNM’s Exhibit 11, page 2, columnD). He said elimination of the DAFB should have little impact on such projects and will not terminate thestatutory incentive. He said moreover, Exempt customers’ generation of renewable energy does notcontribute to PNM’s RPS compliance as conceded by WRA in its exceptions in paragraph 5. He said thebenefits don’t go to the rest of us; they are kept by the Water Authority or UNM.

Mr. Blumenfeld said page 15, in the middle, staff and the AG’s Exception #1: eliminating the DAFBthrough the renewable energy rider is improper and unlawful. Staff and the A G argue that the rider is notdesigned for collecting these specific costs of the DAFB, meaning that such a use would be outside the scopeof PNM’s renewable energy rider as approved and as written.

He said instead, staff believes that recovering these cost to the fuel clause would be a better solution. Hesaid although staff witness Carrera concluded that PNM’s proposal relied on speculative projections ofrenewable energy and offsetting fuel savings, he also concluded that no solution considered in this case wasrigorous enough for rate making. Mr. Blumenfeld said that was in his [Mr. Carrera’s] direct testimony and atthe hearing.

Mr. Blumenfeld said there is nothing in the record to support an alternative such as the fuel clause usingthe rider to collect the DAFB. CCAE and WRA support using the rider to recover the DAFB and suggested ifthe Commission were to order that the rider be redesigned to provide for such recovery, staff’s and the AGconcerns would be met.

Staff and the AG also object to the lack of a true-up because PNM could over recover the DAFB, but staffalso notes there is already a true up and reconciliation true up and re-conciliation mechanism in place for therider. And that there is "no exemption from the reconciliation, reporting and true up provisions of PNM’s riderfor amounts collected through this rider to eliminate the DAFB."


PNM witness Chan in response to NMIEC’s questioning at the hearing agreed "there would be a true upof that (the DAFB) along with everything else in the rate rider 36."

Mr. Blumenfeld said because there is nothing in the record to support an alternative to using the rider tocorrect the DAFB, and because as acknowledged by staff and the AG that there is already a true up in place,the Commission should reject this exception.

Before going on he addressed what he discovered yesterday afternoon. He sent an email and providedhard copies to the Commission this morning of an additional finding and an additional Decretal paragraph.

Mr. Blumenfeld said he would read those two paragraphs because what the two Exempt customers filedwas not for 2016, where they say at least 2½% of their bill would be spent on renewable energy and theyspent more than that. He said that that was for past years or only half of 2016, not for the whole year. That hasto be fixed for both UNM through NMIEC and the Water Utility.

Mr. Blumenfeld read the two paragraphs to be added to the Final Order and findings:

"It appears to the Commission that the certifications and exemption filed by ABCWUA and UNM with theState Auditor may be deficient. The plan year for which PNM seeks approval is 2016. Incorporated intoPNM’s plan year 2016 RPS and RCT calculations are exemptions for ABCWUA and UNM from payingcharges for PNM’s 2016 Renewable Energy Procurements.

Qualifying Exempt customers must certify to the State Auditor that they will expend 2½% of that year’sannual electricity charges to continue to develop within 24 months, customer owned renewable energygeneration. That is the incentive talked about earlier, Statute 62-16 4 A3 for the Exempt customers.Attached to the direct testimony of PNM witness Shane Gutierrez is Exhibit SG 5 which Mr. Gutierrez sayspresents the information received from ABCWUA regarding their claimed exemption for the plan year.

Exhibit SG 5 is the Water Utility’s letter to the State Auditor dated December 30, 2014 to certify its rateexemption under the REA. However, ABCWUA bases its exemption on its projected electricity charges forthe fiscal year (FY) 2014, July 1, 2014 to June 30, 2015 and its expected expenditures in its FY 2014.

Mr. Blumenfeld said the law and the Commission wants 2016.

He said UNM’s letter certification to the State Auditor bases its exemption on its projected electricitycharges for calendar year 2015 and its expected expenditures in its 2015 fiscal year. UNM states that the24-month period referenced in the statute will end July 1, 2017.

Mr. Blumenfeld said neither ABCWUA nor UNM provided the correct data to certify they are exemptionsfor PNM’s plan year 2016. Each must certify it will expend 2½% of its calendar year 2016 projected electricitycharges to continue to develop within 24 months by December 31, 2017 customer owned renewable energygeneration.


Additionally, each in its certification must show that its expenditures are in the 24-month period and willfund development of renewable energy that meets the definition of renewable energy under 62-16 3E of theAct and Rule 17.9.572.7D NMAC.

He said it is not evident from looking at the Exhibits that the project identified by the Water Board inparagraph 4 of the Exhibit, qualifies as renewable energy. ABCWUA and UNM should be required to submitrevised certifications of exemptions to the state auditor for PNM’s plan year 2016 to ensure they meet thestatutory and rule requirements for exemption. And PNM should be required to file an affidavit stating whetherthe requirements for the exemption have been met.

Mr. Blumenfeld said he would add in the Decretal paragraphs: "On or before November 30, 2015,ABCWUA and UNM through NMIEC shall each:

a) submit revised certification of exemption to the State Auditor for PNM’s Plan Year 2016b) file the revised certification in this case andc) serve the revised certification as required by the official service list in this case.

He said on or before December 7, 2015, PNM shall file an affidavit in this case stating whether theABCWUA and UNM have each met the requirements for exemption in PNM’s Plan Year 2016. If PNM’saffidavit states that either of the Exempt customers has not met the requirements for exemption in 2016, thiscase shall be reopened.

Mr. Blumenfeld said going back to the rest of the Decretal paragraphs contained in the RD as fully setforth herein adopted, approved and accepted as Orders of the Commission, except for Decretal paragraph L,which is not adopted, approved or accepted by the Commission. The joint motion to hold a limited portion ofthis case in abeyance and the motion for extension of time, both filed on October 23, 2015, are denied. ThisFinal Order is effective immediately. This docket is closed.

Mr. Blumenfeld said this has to be filed with the State Auditor and with the Commission. He stood forquestions.

Commissioner Lyons asked if Mr. Blumenfeld knew if anything of this magnitude is in PNM’s rate casejust filed.

Mr. Blumenfeld said this is not in their general rate case. Their renewable cost associated with the windfarm is covered in rate base but the other renewable costs are covered through the rider and they are in thiscase.

Commissioner Lyons asked if Mr. Blumenfeld wanted SPS and EPE to be able to respond to this in thesame way PNM did on their Large Capped and Exempt customers.

Mr. Blumenfeld said when their cases come up, yes.

Commissioner Lyons said in the Final Order they are talking about $1.8 million and instead of a $.17increase that would be a $.15 increase as Ms. Click stated.


Mr. Blumenfeld said no, the $1.8 million is correct, but if the DAFB is eliminated according to the HE’scalculations the rider will go down by two cents.

Commissioner Lyons confirmed the amounts and said he agrees with this.

Commissioner Jones said he thinks they have the Order right in concept but he disagreed on orderingSPS and EPE to comply. He said it is reasonable to have it in the Order and they do all the time, but if forsome reason when SPS files they do not agree with this they can say why. He said, "We see waivers all thetime when people file. Everyone is watching these cases so it isn’t like we are surprising them about what theCommission is doing." He said it is perfectly reasonable to let the industry know that the Commission wantseverything consistent. He said, "Let’s get it out in this Order and not go through another case like this whenyou file, because we are probably going to come back with this again."

Commissioner Jones said he doesn’t think it unreasonable to put that in the Order and signal the industrythat that is what the Commission is going to do. He said he would like to see that.

Mr. Blumenfeld said they may have been in the room but were not parties to the case. He said he haslearned they do not do rulemaking in adjudicated cases. He said we have a case that is cited by the peoplewho brought these exceptions. He said the Supreme Court nailed them on something like this in the TWTelecom case. It was held that the PRC did not give the telecommunication company an opportunity topresent evidence and cross-examine witnesses regarding findings, and the evidence from the findings in anearlier case were not entered into the record in the next case.

He said in the next case the HE or the Commission could say "SPS or EPE "nice application, it iscomplete but do the figures over like we did in 15-166 and put on testimony to support that and cross-examinestaff and the AG’s witnesses, because we know you didn’t have a chance to do that in 15-166".

Mr. Blumenfeld said he does not want to be nailed by the Supreme Court again. He said let’s do this andwhen they file their next case they will be free to put on their witnesses and cross-examine the opponent’switnesses. He said the Commission can say we are not going to calculate the RCT this way, or this is niceyou’ve done the RPS this way but we want you to do it the way PNM did it.

Mr. Blumenfeld said that is putting the cart before the horse and violating the command of the SupremeCourt.

Chairperson Montoya asked that Mr. Blumenfeld read the command of the Supreme Court decision.

Mr. Blumenfeld read the paragraph: The PRC violated the company’s right to procedural due process ina case involving calculation of its rates and charges where the PRC adopted findings involving pricingmethodologies from an earlier case in which the telecommunication company did not participate. PRC did notgive the company an opportunity to present evidence and cross-examine witnesses regarding such findingsfrom the earlier case and evidence supporting such findings from the earlier case was not entered into therecord.

Chairperson Montoya asked if correct that Mr. Blumenfeld is assuming that in future cases they would


have a due process claim because the Commission did not tell them now.

Mr. Blumenfeld said no, he is saying in the future cases, like parties do, the Commission, OGC and theHE does, we can cite this case as precedent. Their due process will be violated if this exemption is deniedbecause the Commission is saying this applies to those cases. They were parties in this case and they didn’thave a chance to put on their evidence about the RCT or the RPS. They did not have a chance tocross-examine PNM’s witnesses.

Mr. Blumenfeld said just because the HE said you have to do this or show why you shouldn’t have to dothis is not good enough. They still did not have the opportunity.

Commissioner Jones said let’s be specific about what the findings really were in the TW Telecom case.They were not procedural findings; they were factual cost findings. He said Mr. Blumenfeld’s case holds waterthere, but this is a procedural issue. When talking about an application if the Commission says consistentlythis is how we want an application, the company could say here is our application but we cannot comply, orwe don’t agree with this and this is why. The Commission considers that and goes on.

He said by not doing that the Commission ends up with another fairness case that they hear all overagain. He said the Commission decided those issues and decided it is not fair to exempt the customer underthis program and that is what the HE said, and the Commission is likely to agree.

Mr. Blumenfeld said one of these two companies does not have Exempt customers and it is a differentstory. The DAFB is not in the statute and how it is calculated was PNM’s proposal. He said let the other twofile what they want and if the Commission, the HE and other parties are okay with it, fine. If not there will betestimony and this case could be cited as precedent.

He said to tell these companies now to comply or show us why you should not; we don’t do that.

Commissioner Jones said from a business man’s point of view, knowing the rules make it a lot easier tofile the application. He said he has better things to do than to go through life filing an application and endingup with this, because time is money. It costs money to put the application together and is a huge amount ofwork involved and statistical analyzation, so why not just tell them what it is going to be. Then they wouldknow what to expect and if they don’t like it they can file, maybe not in this case but certainly on theirapplication.

He said if the Commission adopts the Order, at least it saves everyone a lot of money and the industryknows what the Commission expects. He said it is almost deceitful if the Commission doesn’t tell them.

Mr. Blumenfeld said he was sure they would read this opinion and file their applications and know therules. He said for the Commission to tell them these are the rules to the other two that was applied based onPNM’s calculations, could waste a lot of time and money in an appeal.

He said they are following what the PRC said to do in the PNM case. He did not think the Commissionshould command them or say show us why they should not.


Commissioner Lyons said as a business he wants to know. He said part of this (pages 44-53) said theywere not notified and the HE said they were.

Commissioner Lyons said Mr. Blumenfeld said this would only apply to one of the companies, SPS.

Mr. Blumenfeld said he thought he read in one of the pleadings that one of the two utilities does not haveExempt customers. He said this will be posted on our web site and if they choose not to follow this case asprecedent then the Commission or HE could refer them to what PNM did. He said you’re going to haveproblems under the law if you tell them what we have ruled here applies to them or they have to show why itshould not. He said he would look at some of the things in the Order that he omitted in his oral presentation.

Commissioner Lyons thought it would end up in the Supreme Court anyway.

Mr. Blumenfeld said the amount of money outlined by the HE is not that much and is spread out over 25years.

He read from the TW telecom case: The ideal solution is to have a rulemaking. Over the years thecommentators, judges and justices have shown unanimity in extolling the virtues of the rulemaking processover the process of making rules through case by case adjudication.

Mr. Blumenfeld said he cited the case law; he cited the treatise and so have the exceptions. The HE citedno legal authority for doing this and did not cite any Commission cases for doing this. If you don’t cite authorityfor doing something, you assume there is none.

Commissioner Espinoza asked if it was correct that the dder does decrease.

Mr. Blumenfeld said it does if you eliminate the DAFB; it goes down by 2 cents according to the HEcalculations.

Commissioner Espinoza asked if anyone like UNM or NMIEC presented alternatives as to how to make acorrection to the windfall.

Mr. Blumenfeld said NMIEC does not take a position on it and does not believe it exists. They don’t feelthey should be subject to it and would not propose an alternative to collect the windfall.

Commissioner Espinoza said Mr. Blumenfeld is concerned about the two things Commissioners Lyonsand Jones proposed. She asked if there was a way they could move to approve the Order.

Mr. Blumenfeld said he thought the objection was to grant the first exception.

Commissioner Espinoza said that they both agreed. She said she wondered if both would end up back inthe Supreme Court.

Mr. Blumenfeld said he was not conjecturing, but saying with the law the way it is, it is violating the law.


Commissioner Espinoza said if they move to approve the Order as submitted and presented, theCommission would not be violating the law.

Chairperson Montoya said there is a disagreement between the two attorneys.

Chairperson Montoya moved to approve the Order and adopt the RD and adopt Mr. Blumenfeld’stwo paragraphs that were added at the end.

Commissioner Lyons asked if page 16 of the Order in Paragraph L would be left in.

Chairperson Montoya read paragraph L: "The Decretal paragraphs contained in the RD as set forth inExhibit A are incorporated by reference as fully set forth herein."

Commissioner Jones said the exception was on page 2 and Commissioner Lyons replied it was in theDecretal Paragraph A on page 16.

Mr. Blumenfeld recommended the RD be approved entirely except for paragraph L that tells EPE or SPSwhy this will apply or to tell us why it should not. He clarified that he is saying to adopt all of the RD exceptparagraph L in the RD - that violates due process and is not practical.

Chairperson Montoya disagreed. She asked if deleting Paragraph A would do it.

Commissioner Jones said it would not.

Ms. Caffey-Moquin said it is just to clarify the response to Commissioner Jones’ inquiry about what was atstake in the TW Telecom case.

Mr. Blumenfeld read the Supreme Court decision again about importing findings from the competitiveresponse case Final Order into the AFOR 3 Final Order.

Mr. Blumenfeld said the PRC also adopted the finding from the competitive response case that "Qwestdoes not need to file imputation studies in support of its rate test because the analysis should focus on Qwestcost and revenues, rather than on those incurred by the local exchange carriers such as TW Telecom."

He said it was a criticism of not just bringing in numbers, but calculations into this case where thecompany did not have a chance to challenge it. It is not just the numbers but the analysis and methodology.

Chairperson Montoya asked if they would not have the right to challenge it within the case as they open it.They file their case and argue and challenge at that point.

Mr. Blumenfeld agreed. Without the Commission saying these are going to apply to you or you need totell us why not.

Chairperson Montoya said she didn’t understand the illegality of giving notice and asking them to tell the


Commission why the PRC is wrong. She said these processes are for that and for the Commission toencourage the process to say why this is inaccurate does not seem illegal. They are not asking them to do itin this case.

Mr. Blumenfeld said there is precedent to consider and what if there is a complaint against a tow truckcompany and 300 motor carriers say they want notice, like the Commission imposed on the other two utilities.There are certain things the Commission does not want to set precedent for.

Chairperson Montoya said she disagreed. She would like to adopt the Order with that in it and needs helpwith that.

Mr. Blumenfeld suggested taking out"except for Decretalparagraph L" and say the Commission adoptedthe entire RD. He said he would then say on page 2 that the exceptions are not well taken.

Commissioner Jones suggested "they are denied" instead. He said but they are also adding the twoparagraphs to this.

Commissioner Espinoza seconded the motion which passed by unanimous (5-0) voice vote.

3) 15-00087-UT IN THE MATTER OF JEMEZ MOUNTAINS ELECTRIC COOPERATIVE, INC.’SCOMPLIANCE FILING RELATED TO TRIBAL RIGHT-OF-WAY RATE RIDERSURCHARGE RECONCILIATION ADJUSTMENTS.(Margaret Caffey.ioquin) Order

Ms. Caffey-Moquin presented information regarding this matter to the Commission. She said onSeptember 30, the Commission adopted the Final Order in this case. She recommends reopening the case toconsider a motion for rehearing that was filed on time by David and Priscilla Neal.

Ms. Caffey-Moquin said the case at hand involves a reconciliation rider that would reconcile andessentially recalculate several right-of-way riders already approved by the Commission in Case #13-202.This is essentially a compliance case. She said to the extent that the application to reconcile these rate riderscould have resulted in a rate change, the Commission entertained a number of private protests filed at thePRC with regard to the reconciliation rider (Advice Notice 77). The Commission found in its September 30Order that there were enough protests to warrant an examination of whether there was good cause to embarkon a rate hearing process.

Ms. Caffey-Moquin said the PRC found the protests did not state grounds for a finding of good cause andprovided the reasoning in the September Order.

The Neal’s filed on October 30 a motion for rehearing. There is a statutory time frame because this casecomes under the Public Utility Act. The Commission must either act on a motion for a rehearing or decline toact upon the motion, in which case it would be deemed denied by law under the statute.


The Commission issued a bench request directing the co-op and the Commission Utility Division Staff tofile statements of position to the motion to a rehearing. The bench request provided that in the alternative, thestaff and co-op could file a formal response, which is what happened. The responses were timely filed.

This morning she was handed an additional filing made yesterday at 4:16 p.m. by the Neal’s of a requestfor leave to reply to staff’s response. That includes the reply that staff proposed for the Commission’sconsideration. She noted that the Commission’s rehearing rules prohibit replies from being filed unless leaveis granted. The Commission would have to grant leave for this reply to be considered.

Ms. Caffey-Moquin said the motion for rehearing is cogent and sets forth points that the Neal’s feel isimportant. She has not had an opportunity to review this completely and is not proposing discussion.

Commissioner Espinoza asked if the Neal’s provided a hard copy to each of the Commissioners.

Ms. Caffey-Moquin said they did not. She did not see a certificate of service provided and was not certainit was served on Staff or the co-op. For those reasons it is superfluous for her presentation this morning. Sheoffered to discuss the matter after the break with the Commission.

She would like to focus on the motion for rehearing and the responses at this time. She complimentedthe Neal’s for the quality of the briefing supplied in support of their motion. However, she recommended amotion to deny the rehearing or declining to act and to allow the Order to stand. Under the PUA andCommission rules if the rehearing is granted, the Final Order on September 30¯ would automatically bevacated. That would result in the reconciliation rider that was approved and effective November 1 to bevacated and halted.

Then the Commission would have to go back and address that as well as the protests filed prior to theSeptember 30 decision. The motion for rehearing raises contentions made under federal law having to dowith the jurisdiction of Native American governments over non-members of the tribal entity that reside withinboundaries of Native American governments lands.

Ms. Caffey-Moquin said these are important arguments, but the Commission does not have jurisdiction toaddress most of them. The arguments were made in addition in 13-0202, so to the extent the arguments arebeing repeated, the motion for rehearing does not raise new arguments or introduce new evidence for theCommission on any of the September 30 Order.

Ms. Caffey-Moquin said the JMEC response to the motion for rehearing emphasizes that aspect anddescribed the history of the rate rider and pointed out that the Commission’s prior Orders have been held tobe lawful. The Commission recognized that in their September 30 Order in this case.

Commissioner Espinoza asked which case Ms. Caffey-Moquin referred to as not being appealed.

Ms. Caffey-Moquin said case #13-00202 and others leading up to it having to do with similar right-of-waycollections with regard to other Native American governments. She said she failed to mention at the outsetthat this motion for rehearing involves the right-of-way regarding the San Ildefonso Pueblo. None of the Final


Orders leading to this case were ever appealed. Parties have 30 days to file a notice to the State SupremeCourt if they are aggrieved by a Commission Final Order, after which the Order has the force of law.

She said the protest in the present motion for a rehearing asserts that the Commission’s Final Orderswere unlawful and focuses on the methodology used to calculate the rates to customer members of theco-op.

Ms. Caffey-Moquin said Staff response is broader than the co-op’s and emphasizes that theCommission’s prior Orders were lawful. It also addresses that the Commission does not have jurisdiction toaddress many of the contentions made by the Neal’s and the previous protesters. She reiterated that theconcerns raised are well stated and are obviously concerns the protesters care deeply about, but nothing thatthe Commission can address.

Ms. Caffey-Moquin said she recommends the Commission either enter an Order denying the motion forrehearing or decline to act on it and let the existing Order stand.

Commissioner Lyons agreed with Ms. Caffey-Moquin.

Commissioner Lyons moved to approve the Order as presented by Ms. Caffey-Moquin.Commissioner Lovejoy seconded the motion and the motion passed by majority (3-2) vote.Commissioner Espinoza and Chairperson Montoya voted against. So Ordered.

Chairperson Montoya asked why this couldn’t be addressed so that it doesn’t come up over and over andat some point give people some relief and answers.

Ms. Caffey-Moquin said there are avenues in federal court to give the relief the Commissioners seek.The motion for rehearing cites federal litigation that has begun with regard to certain easement issuesbetween Santa F~ County and San Ildefonso Pueblo. Most of the law cited in the motion for rehearing isfederal law and those decisions would apply to the Commission.

The Commission does not have the jurisdiction to address that issue. The Commission’s purview is toestablish rates. They have no power to reject or address right-of-way fees agreed upon between the NativeAmerican government and the utility, or approved by the BIA with or without the consent of the utility passedon to customers.

Commissioner Espinoza said that is why she had asked Chairperson Montoya for the history from beforeshe arrived to the present. She had hoped to have the decisions from the previous board to the present day.

Ms. Caffey-Moquin said she will be providing the Commission with that report. She was just informed byHE Glick that the BIA has issued its final rule on right-of-way fees. She said does not know what the final rulecontains and will report back to the Commission.

Ms. Glick said she could tell them that challenges were made arguing that the BIA minimum should usefair market value as the most that should be charged by Native American governments. The BIA rejected thatand said the Native American governments have the right to charge more than fair market value.


Chairperson Montoya asked if it was brought to BIA’s attention that not only the Native Americans arebeing affected. She said a lot of times they give the Native Americans the ability to govern themselves. But inthis case they are governing people who are not necessarily on their pueblo.

Ms. Glick agreed. She noted the BIA said they received a lot of comments from New Mexico including apetition submitted by Senator Udall.

Commissioner Lovejoy said that is where Congressman Lujan’s jurisdiction comes in, not the states.She said the new decision does not change a sovereign government’s jurisdiction and just addresses the fairmarket value.

A member of the public asked for permission to speak.

Ms. Caffey-Moquin said if the Commission is willing to entertain Mr. Neal’s comment she would trust thathe had signed the public comment sheet. She was not sure if the Staff counsel was present.

Chairperson Montoya confirmed that it would not be an issue to hear from Mr. Neal.

Mr. Neal said unfortunately he did not have the 12-page document that he submitted yesterday, but hechecked with the attorney and he did get it in on time. He said they were not arguing anything the Commissionhad just ruled on. They are arguing that due process was violated and has nothing to do with jurisdictionalissues or the rider. He said they just want the Commission under due process to reopen the case.

Mr. Neal said now that the Commission has voted to turn down his request it does not make a lot ofsense, because they have not read the paper yet. He could come back and file again, but they were notprotesting the jurisdictional issues that have been cited. They are protesting the way they were decided. Hesaid they don’t care what the decision is but are just asking for it to be reheard.

Mr. Neal said there are grammatical errors in their writing, but the idea behind it is that the Supreme Courthas ruled over and over that even the JMEC is required to comply with the law under the FourteenthAmendment. That is where it broke down in the beginning and what they are protesting.

Mr. Neal said it is unfortunate that Commission has already ruled, because he met the deadline and didwhat was asked and the Commission ruled against without listening to what was submitted.

4) 15-00196-UT EDMUND PEREA FORMAL COMPLAINT AGAINST CENTURYLINK(Margaret Caffey-Moquin) Order

This matter was tabled to the next meeting under approval of the agenda.

5) 15-00355-UT IN THE MATTER OF A COMMISSION INQUIRY INTO PUBLIC UTILITIESCONSTRUCTING AND OWNING DISTRIBUTED GENERATION DEDICATED TO


SERVING ONE OR MORE RETAIL CUSTOMERS(Commissioner Sandy Jones) Order

Commissioner Jones said this opens the NOI for a narrow focus to pursue the benefits and barriers toinvestor utility owned rooftop solar. He said, "They know that solar is popular with the rich guys and theremight be barriers for those who may not be able to finance a solar program."

Commissioner Lyons asked if this will affect Holloman.

Commissioner Jones said no, Holloman was used as a model.

Commissioner Lyons said he is looking for EPE to file on Holloman and doesn’t want it to be affected.

Chairperson Montoya moved to approve the Order as presented. Commissioner Espinozaseconded the motion which passed by unanimous (5-0) voice vote. So Ordered.

A. Utility Matters (continued):

6) 14-00332.UT IN THE MATTER OF THE APPLICATION OF PUBLIC SERVICE COMPANY OFNEW MEXICO FOR REVISION OF ITS RETAIL ELECTRIC RATES PURSUANTTO ADVICE NOTICE NO. 507(Judith Amer) Order

B= SUPREME COURT CASE NO. 35,377, PUBLIC SERVICE COMPANY OF NEW MEXICO v. NEWMEXICO PUBLIC REGULATION COMMISSION, Appellee, AND ALBUQUERQUE BERNALILLOCOUNTY WATER UTILITY AUTHORITY, Cross.Appellant.

Ms. Amer presented information on this matter to the Commission. She said she is before theCommission to discuss a case that was closed, PNM rate case 14-00332, which was subsequently appealedto the New Mexico Supreme Court.

She said Ms. Caffey-Moquin handed her an Order that is part of the public record in the New MexicoSupreme Court and compiled in the public record E docket at the PRC as 14-00332 in the PNM appeal.[Moved from Executive Session to Open Meeting for consideration.]

Ms. Amer explained this is the remand back request and two weeks after it was remanded theCommission considered reopening. The Supreme Court consolidated the New Mexico Gas Company appealand last week New Mexico Gas Company said they were withdrawing.

Secondly, they granted SPS’s motion to intervene as a party appellant in the PNM appeal. There are twoseparate appeals, the PNM and the SPS appeal. PNM has filed an amicus in the SPS appeal and SPS hasfiled a motion to intervene in the PNM appeal.


The Order further orders that the PNM appeal be stayed for 30 days for the limited purpose to allow theCommission to reconsider its Final Order in Case #14-00332. This was issued on November 9 and it wasreceived in the office on November 12 and immediately put on the agenda.

Ms. Amer said she has prepared a proposed order that would reconsider this matter on a date that couldbe chosen by subsequent single signature order or right now.

Chairperson Montoya suggested they choose the date now.

Ms. Amer said the reconsideration in the Final Order of the PNM rate case is scheduled for November 30unless the Commission calls a special meeting.

Chairperson Montoya moved to approve November 30, 2015 be put on the agenda to reconsiderthe Commission’s previous vote. Commissioner Espinoza seconded the motion, which passed byunanimous (5-0) voice vote. So Ordered.

=EXECUTIVE CLOSED SESSION PURSUANT TO NMSA 1978, SECTION 10-15-1(H)(2) ANDSECTION 10-15-1(H)(7), RESPECTIVELY, TO DISCUSS:

LIMITED PERSONNEL MATTER REGARDING SELECTION OF GENERAL COUNSEL POSITION

8. ACTION RE: SELECTION OF GENERAL COUNSEL POSITION

Chairperson Montoya asked to adjourn at this time. She said she would like a list of five questionstomorrow or Friday and interview candidates next week. She said if they interview and don’t find a suitablecandidate out of the nine, they could always re-advertise.

Commissioner Lyons asked to remove two candidates.

Chairperson Montoya asked if acceptable to Commissioner Lyons to tell her after the meeting which twothe Commission should not interview and she will submit the remaining list to Ms. Kepler.

Commissioner Jones suggested they table the Executive Session or move it until the end of the day.

Chairperson Montoya moved to table the Executive Session. Commissioner Jones seconded themotion and the motion passed by a unanimous (4.0) voice vote. Commissioner Lovejoy was notpresent for the vote.

The meeting was recessed at 12:16 until 1:30 p.m.

The Commission had no quorum at the scheduled time for the hearing. Chairperson Montoya andCommissioner Jones were present. Commissioner Lovejoy arrived at 1:43 making a quorum.


14. HEARING AND POSSIBLE ACTION:

7) 14-00147-UT IN THE MATTER OF THE PETITION OF STAFF FOR AN ORDER TO SHOWCAUSE WHY JOSE LEON ROMERO D/B/A NEW MEXICO WATERWORKS,INC. (A CANCELLED NEW MEXICO ENTITY) AND LION ENTERPRISES, LTD,(A CANCELLED NEW MEXICO ENTITY), DAN SERRANO AND NMWATERWORKS, LLC SHOULD NOT BE FOUND TO HAVE VIOLATEDVARIOUS PROVISIONS OF STATUTORY AND REGULATORY AUTHORITIES

The Commission went on the record at 1:43 p.m.

This hearing was transcribed by a court reporter and is not part of these minutes.

During the hearing, Commissioner Espinoza arrived at 1:47 p.m. and Chairperson Montoya joined thebridge at 2:20 p.m. after leaving the premises. Commissioner Lovejoy left the meeting at approximately 3:00p.m. Commissioner Espinoza left the meeting at 3:13 p.m. Commissioner Montoya left the bridge at 3:14 p.m.leaving only Commissioner Jones present at the hearing.

There was a 5-minute break at 3:45 until 3:52 p.m.

The hearing was completed at 4:22 p.m. and the Commission went off the record.

There was no longer a quorum for conducting Commission business.

9. MISCELLANEOUS ANNOUNCEMENTS

Not considered.

10. PUBLIC COMMENT

Not considered.

11. COMMUNICATIONS WITH GENERAL COUNSEL, MICHAEL C. SMITH

Not considered.

12. COMMUNICATIONS WITH INTERIM ACTING CHIEF OF STAFF, ANDREA DELLING

Not considered.


13. COMMUNICATIONS WITH COMMISSIONERS

Not considered.

15. ADJOURNMENT

Due to Jack of a quorum, the meeting was adjourned at 4:22 p.m.


ATTEST:

Carl Boaz, Stenographer

APPROVED:

-’RSON

SANDY JONES, COMMISSIONER


NEW MEXICO PUBLIC REGULATION COMMISSION

OPEN MEETING; CASE MANAGEMENT MEETINGDate: NO~/e~q ~ \~ ) :2-0 [~

NAME COMPANY NAME(if any)

PHONE NUMBER

P

Thank you for attending this meeting.

EXHIBIT 1PRC - November 18, 2015

NEW MEXICO PUBUC REGULATION COMMISSION

OPEN MEETING: CASE MANAGEMENT MEETINGWednesday, November 18, ZOlS

9".30 a.m.PERA Building, 4m Floor Hearing Room

1120 Paseo de Peralta, Santa Fe, NM 87501

AGENDA

2.

3.

4.

PLEDGE OF ALLEGIANCE/STATE PLEDGE

INTRODUCTION OF SPECIAL GUESTS

CONSIDERATION AND APPROVAL OF THE AGENDA

CONSIDERATION AND APPROVAL OF MINUTES:Minutes of Case Management Open Meeting of October 28, 2015

CONSENT ACTION: No cases

REGULAR ACTION AND DISCUSSION

A. Utility Matters:

1) 15-00343-UTJudith Amer

Open Meeting: Case Management MeetingAgendaWednesday, November 18, 2015Page I of $

SOUTHWESTERN PUBMC SER~3CE COMPANY’SAPPUCATION FOR: (1) AUTHORIZATION TOFORM A SUBSIDIARY; (2) AUTHORIZATION TOCONTRIBUTE CERTAIN TRANSMISSION ASSETSTO THE SUBSIDIARY; (3) AUTHORIZATION TOSELL ITS INTEREST IN THE SUBSIDIARY TO XCELENERGY SOUTHWEST TRANSMISSIONCOMPANY, LLC; (4) APPROVAL OF AGREEMENTSWITH AFFIUATED INTERESTS; (5)DETERMINATION THAT XEST’S CHARGES TO SPSUNDER THE SPP OATT ARE EUGIBLE FORRECOVERY IN SPS’S NEW MEXICO RETAIL RATES;AND (6) OTHER RELATED REUEF

EXHIBIT 2PRC. November 18, 2015

2)

4)

s)

15-00166-UTCarolyn Glick andRick Blumenfeld

15-ooo87-UTMargaret Caffev-Moquin

15-00196-UTMargaret Caffey-Moquin

15-00355-UTCommissioner Sandy Jones

SOUTHWESTERN PUBUC SERVICE COMPANY,

APPLICANT.

ORDER

IN THE MATTER OF PUBUC SERVICE COMPANYOF NEW MEXICO’S RENEWABLE ENERGYPORTFOUO PROCUREMENT PLAN FOR 2016AND PROPOSED 2016 RIDER RATE UNDER RATERIDER NO.36

ORDER

IN THE MATTER OF JEMEZ MOUNTAINSELECTRIC COOPERATIVE, INC.’S COMPUANCEFLUNG RELATED TO TRIBAL RIGHT-OF-WAYRATE RIDER SURCHARGE RECONCIUATIONADJUSTMENTS

ORDER

EDMUND PEREA FORMAL coMPLAINT AGAINSTCENTURYUNK

ORDER

IN THE MATTER OF "A COMMISSION INQUIRYINTO PUBUC UTILITIES CONSTRUCTING ANDOWNING DISTRIBUTED GENERATIONDEDICATED TO SERVING ONE OR MORE RETAILCUSTOMERS

ORDER

EXECUTIVE CLOSED SESSION PUR;UANT TO NMSA 1978, SECTION 10-15-1(HX2) ANDSECTION 10-15-1(H)(7), RESPECTIVELY, TO DISCUSS:

Open MeeXinB: Case ManaBement Meetin8AgendaWednesday, November 18, 2015Pase 2 of 5 EXHIBIT 2

PRC- November 18, 2015

Ae UMITED PERSONNEL MATTER REGARDING SELECTION OF GENERAL COUNSELPOSITION; and

SUPREME COURT CASE NO. 35,377, PUBUC....SERVICE COMPAN.Y..OF .NEWMEXICO v. NEW MEXICO PUBUC REGULATION COMMIS.SIO..N, Apl)ell~., ANDALBUC[UERCLUE BERNAULLO COUNTY WATER UTIUTY AUTHORITYf Cross-A_p~ellant.

ACTION: RE: SELECTION OF GENERAL COUNSEL POSITION

REGULAR ACTION AND DISCUSSION (�ont’d|

Utility Matters (cont’d):

14-00332-UTJudith Amer

IN THE MATTER OF THE APPUCATION OF PUBLICSERVICE COMPANY OF NEW MEXICO FORREVISION OF ITS RETAIL ELECTRIC RA1T_SPURSUANT TO ADVICE NOTICE NO. 507

ORDER .....

Transportation Matter:.

Brian Brock andNM EMS Bureau

AMBULANCE ADVISORY COMMITTEE REQUESTFOR RE-APPOINTMENT OF COMMITTEEMEMBERS

RESOLUTION

10.

11.

13.

MISCELLANEOUS ANNOUNCEMENTS

PUBUC COMMENT

COMMUNICATIONS WITH GENERAL COUNSEL, MICHAEL C. SMITH

COMMUNICATIONS WITH INTERIM ACTING CHIEF OF STAFF, ANDREA DELUNG

COMMUNICATIONS WITH COMMISSIONERS

Open Meeting: Case Management MeetingAgendaWednesday, November 18, 2015Page 3 of $ EXHIBIT 2

PRC - November 18, 2015

14. HEARING AND POSSIBLE ACTION:

7) ] 14-00147-UT

I 1:30 p.m. (Tima ~j~,~ toI completion of the above

agenda itms)

IN THE MATTER OF THE PETITION OF STAFF FORAN ORDER TO SHOW CAUSE WHY JOSE LEONROMERO D/B/A NL:W MEXICO WATERWORKS,INC. (A CANCELLED NEW MEXICO ENTITY) &LION ENTERPRISES, LTD. (A CANCELLED NEWMEXICO ENTITY}, DAN SERRANO AND NMWATERWORKS, LLC SHOULD NOT BE FOUND TOHAVE VIOLATED VARIOUS PROVISIONS OFSTATUTORY AND REGULATORY AUTHORITIES

15. ADJOURNMENT

To obtain a copy of this agenda please log in the Commission’s website at

The Commission will make reasonable efforts to post the agenda on the Commission’swebsita at least 72 hours before the open rneeting, but the inability to do so within the 72hours prior, will not require the Commission to delay the meeting or to refrain from takingaction 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 todiscuss matters not subject to the New Mexico Open Meetings Act. The Commission mayrevise the order of the agenda items considered at this open meeting~

Notice is hereby given that the Commission may request that any party answer clarifyingquestions or provide oral argument with respect to any matter on the agenda. If theCommission makes such a request, any party present at the meeting, either in person or bytelephone, shall have an equal opportunity to respond to such questions or argument. In theevent a party whose case is on the agenda chooses not to appear, the absence of that partyshall not cause such discussion or argument to become ex-parte communications.

PERSONS WITH DISABILITIES

ANY PERSON WITH A DISABILITY REQUIRING SPECIAL ASSISTANCE IN ORDER TO PARTICIPATEIN THIS PROCEEDING SHOULD CONTACT THE OFFICE OF DIRECTOR OF ADMINISTRATIVE

Open Meeting: Case Management MeetingAgendaWednesday, November 18, 2015Page 4 of 5 EXHIBIT 2

PRC - November 18, 2015

SERVICES OF THE COMMISSION AT (505) 827-4042 AS SOON AS POSSIBLE PRIOR TO THECOMMENCEMENT OF THE OPEN MEETING.

PUBUC COMMENT

All members of the public wishing to provide public comment must sign a sign-up sheetprior to the start of the meeting and identify their name and the name of the organization theyrepresent (if any), and the topic or issue on which they desire to comment. The portion of theagenda allocated for public comment at any one open meeting shall be limited to a maximumof 30 minutes for all persons wishing to provide comment. The order of speakers will be basedon the order in which speakers sign up, but public officials may be taken out of order. If aspeaker is not present at the time he or she is called to provide comment, that speaker shallforfeit their opportunity to speak. Public comment by an Individual or entity shall be llmited tono more than three (3} minutes unless the Commission acts to extend the period. If thenumber of individuals on the sign-up sheet desiring to provide comment would exceed theallotted 30-minute period, the Chairman may limit individual remarks to a shorter time period.Individuals represented by or representing a common organization or assodation may be askedto select one individual to act as spokesperson to speak for the group. Individuals who sign upto comment, but either fail to do so or choose to speak for less than their allotted time, maynot cede or yield their time to another speaker. Written comments of individuals who cannotbe physically present may not be read aloud at the meeting but may be submitted to theCommission.

The subject matter of public comments shall be relevant to matters within theCommission’s jurisdiction. Public comment will not be permitted on matters that should beaddressed appropriately as the subject of an informal or formal complaint before theCommission or on pending rulemaking proceedings before the Commission once theopportunity for public comment in those proceedings has closed. Public comment by parties toa proceeding or adjudication pending before the Commission will not be permitted where thecomment concerns matters at issue in such proceeding. The Chairman shall retain the right tostop any speaker who raises an issue that is not under the Commission’s jurisdiction or issubject to the restrictions above. Public comment will be received without Commissioncomment or response. However, individual Commissioners may at their option seekclarification or additional information from speakers through the Chairman. No speakers willbe accommodated after the public comment portion of the agenda has closed. The Chairmanretains the right to exercise discretion in the implementation of this policy and may overridethe above rules in case of emergency or other unforeseen drcumstances.

Speakers providing comment shall at all times conduct themselves in accordance withproper decorum. Profane or vulgar language or gestures will not be tolerated. Audiencemembers shall not disrupt an open meeting by speaking without being recognized by theCommission and shall not incite others to do so. The Commission retains the right to removedisruptive attendees and individuals who fail to conduct themselves in accordance with theseprovisions from the Commission meeting.

Open Meeting: Case Management MeetingAsendaWednesday, November 18, 2015Page S of S


NEW MEXICO PUBLIC REGULATION COMMISSION

OPEN MEETING: CASE MANAGEMENT MEETINGDate:

NAME PHONE NUMBER TOPIC

Thank you for attending this meeting.


November18, Commissioner Karen L. Montoya, Chairperson ...nmprc.state.nm.us/docs/older docs/11-18-15...

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