Electricity Markets

New Mexico Utility Regulators Says Legislature Is Best Suited For Public Power Study

In a recent letter to lawmakers in New Mexico, commissioners with the New Mexico Public Regulation Commission (PRC) said that the New Mexico Legislature, and not the PRC, is the proper body to conduct a study that would evaluate shifting the state’s electric sector to public power.

A group of New Mexico lawmakers recently asked the PRC to launch a study that would evaluate shifting the state’s electric sector to public power. The PRC subsequently held a hearing related to the petition from the lawmakers.

PRC Commissioners sent a letter on Feb. 3 to several New Mexico lawmakers in which the state utility regulators responded to the idea of the PRC conducting the study.

In the letter, the Commissioners said that after reviewing New Mexico House and Senate Memorials (SM 10/HM 20) related to the study, the PRC “takes no position on the merits of a state-level public utility for New Mexico. We believe that is the proper purview of the Legislature.” 

Memorials introduced in New Mexico's Legislature do not have the force of law. Memorials can be either joint or simple and require no action on the part of the governor. Joint memorials are acted on by both houses.

The state utility regulators said they have concerns about the proposed role of the Commission in the study and suggested that the stated goals of the memorials would be better served if it were conducted by the Legislature in cooperation with an outside entity.

The PRC is particularly concerned that the role proposed for it is potentially an improper one for it to fulfill.

“We do not believe that the Commission has authority over the subject matter of the study, nor should it exercise authority given its regulatory responsibilities,” the Commissioners said.

“The statutes delegating responsibility to the Commission, particularly the Public Utility Act, implicitly presuppose the existing electric service landscape of investor-owned utilities and member-owned rural electric cooperatives and direct the Commission to regulate accordingly,” the letter noted.

The New Mexico Public Regulation Commission Act’s “apparent limitation on the Commission’s power to study/investigate, suggests that it should not conduct a study the results and recommendations of which the Commission would be unable to act upon." 

Because the results and recommendations of the studies envisioned in SM 10 and HM 20 “can only be acted upon by the Legislature, a study conducted by the Legislature, independent of the Commission but with the Commission providing data and other information under its control, would be more appropriate,” the letter went on to say.

Putting aside whether, under the current statutory framework, participating in the study is a permissible activity for the Commission, the PRC Commissioners raised a number of additional concerns and questions.

The Commissioners pointed out that the PRC’s primary statutory responsibilities are to adjudicate matters to which the utilities are parties and to issue regulations to which the utilities are subject. 

“Having the Commission potentially advocate for or against a state-level public utility before the Legislature, making recommendations either in agreement with or in opposition to the utilities it regulates would, at the very least, raise the possibility of unresolvable conflicts of interest for the Commission when presiding over future matters to which the utilities are parties.”