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New Mexico regulators deny permit for utility gas project, cite state’s 2045 100% clean power law

December 18, 2020

S&P Global Market Intelligence ($):

The New Mexico Public Regulation Commission on Dec. 16 denied a request by El Paso Electric Co. to build a 228-MW natural gas-fired plant because it will not meet the state’s 2045 net-zero goal, even though the company has already started construction on the facility.

The commission’s hearing examiner, Elizabeth Hurst, recommended denying EPE’s request because it was in the best public interest for New Mexico, and the five-member commission agreed during the Dec. 16 meeting. (PRC Docket No. 19-00349-UT)

The Public Utility Commission of Texas approved the proposal Oct. 16, as EPE’s jurisdiction is split between the two states. The Newman CT plant, also known as Newman 6, is in El Paso County, Texas, adjacent to two older plants.

EPE’s proposal does not meet requirements under New Mexico law, commission associate general counsel Russell Fisk said, noting that 80% of the company’s customers are in Texas so the utility follows the priorities of Texas.

“Any multi-jurisdiction utility must plan to comply with laws of both jurisdictions,” Fisk said. “They asked the [New Mexico] commission to simply follow a Texas decision based on Texas law” and ignore New Mexico law. “This is really troubling because Texas has different laws.”

EPE’s request to build the Newman Unit 6 plant, at a site northeast of El Paso, Texas, has an estimated cost of $159.3 million, according to the case history. The utility included the Newman 6 unit along with solar and storage resources it selected through a request for proposals to meet customer demand by 2023. The New Mexico commission in May approved two power purchase agreements the utility had proposed, one for 100 MW of solar and one for 50 MW of storage capacity, but rejected [a] third.

Building a gas turbine itself is not in violation of New Mexico law because the proposed unit would improve emissions from the current plant and work toward the state’s zero emission goal, Commissioner Jeff Byrd said. However, EPE’s proposal was misleading in terms of cost to consumers because it was based on a 40-year life unit, Commissioner Cynthia Hall said. If EPE plans to comply with New Mexico’s Energy Transition Act, the proposed gas plant couldn’t have a 40-year life. Yet, the cost was presented over a 40-year time to appear less to consumers, Hall said.

[Kassia Micek]

More ($): NM regulators deny permit for El Paso gas plant already under construction

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