May 2015

Newsbites – May 2015


Hearing Examiner Rejects PNM’s Replacement Power Proposals

A recommended decision put forth last month by the Hearing Examiner responsible for advising the state Public Regulation Commission on PNM’s replacement power proposal for shutting down two units at the San Juan Generating Station (SJGS) found that the proposal “is not fair, just and reasonable and in the public interest.” Ashley Schannauer cited concerns regarding the reliability of the aging SJGS, the future ownership of the plant after a contract expires in 2022, and uncertainty about where the plant will get its coal and how much it will cost after a supply agreement expires in 2017.

Schannauer said that the utility’s proposal could saddle New Mexico ratepayers with a lot of risk. He advised the PRC commissioners to deny PNM’s request to absorb the excess capacity in one of the two remaining units and substantially reduce the amount the utility can charge for nuclear energy it wants to bring onto the grid. He also said the commissioners should ask PNM to find alternative energy sources.

In response, PNM is expected to file extensive “exceptions,” or objections. The commissioners may vote this month to accept or reject the hearing examiner’s advice.

Earlier this year, PNM acknowledged that, due to an accounting error, the cost estimate for its plan to continue burning coal at the SJGS along with other fuels had increased by over $1 billion. This was after the utility had already introduced a rate proposal that would result in more than $100-per-year increase to the average home’s bill.


Support for PNM’s Plan Plummets

Of the nine parties that originally supported PNM’s SJGS proposal, over half have withdrawn their support. The Albuquerque Bernalillo County Water Utility Authority has publicly opposed the plan. Farmington, home city of the plant, has announced that it would not acquire an increased stake in the plant due to concerns about the plant’s reliability and costs that would be passed on to the community. On April 6, the Albuquerque City Council passed a resolution formally opposing PNM’s plans and urging the New Mexico Industrial Consumers, of which Albuquerque is a member, to withdraw its support.

Renewable-energy advocates say that PNM’s proposal would lock the utility into burning coal at the plant for years to come, subjecting air, land, water and people to soot, smog, arsenic and mercury pollution. Additionally, groups such as the Sierra Club say that dumping more money into an outdated coal plant would prevent New Mexico from taking advantage of enormous clean-energy potential. They say that the state could meet its energy needs more than 70 times over just with wind.


Hearing Examiner Rejects PNM’s Rate Hike Plan

New Mexico Public Regulation Commission Hearing Examiner Carolyn Glick has rejected PNM’s $107 million rate-hike plan as “incomplete.” Glick agreed with the two intervenors in the case, the Albuquerque Bernalillo County Water Authority and New Energy Economy, which challenged PNM’s filing as noncompliant with legal requirements to provide a transparent basis for the figures they project to legitimize rate hikes. Glick’s Recommended Decision, released on April 17, found that “PNM has not explained, supported and justified the [cost] estimates as required by the Future Test Year rule. Under these circumstances, it is reasonable to dismiss PNM’s application.”

PNM said it would file “exceptions” to Glick’s recommendations. The utility could ask the PRC to go ahead with a vote on its 12 percent rate-increase request or refile its request with more documentation.


NM Attorney General Opposes PNM Solar Fee

New Mexico Attorney General Hector Balderas is opposing a proposal by Public Service Company of New Mexico, the state’s largest utility, to charge a new grid “access fee” for customers installing new solar power systems. PNM wants to charge those customers $21 to $36 per month. The utility says that the rate request is fair because solar customers should pay a share of costs for maintaining the electric grid. A coalition of clean-energy and environmental groups say that PNM has exaggerated the costs and ignored the benefits of photovoltaic systems.


Balderas has joined the coalition in filing a motion in support of dismissing PNM’s request. The petition also has the support of the PRC’s utility division staff. Balderas is also asking the state Public Regulation Commission to evaluate the costs and benefits to the utilities and the grid of distributed-generation, customer-owned solar panels, or wind turbines on homes and businesses.


New Mexico needs an accountable plan that guarantees energy security and affordable clean energy for all New Mexicans, and that’s why I am asking the PRC to initiate this investigation into New Mexico’s utility system,” Balderas said. “New Mexicans deserve affordable clean energy in places like Mora and Hidalgo County, not just in Las Cruces and Santa Fe.”


USGS: Oil & Gas Drilling Causes Earthquakes in New Mexico

New Mexico is among a dozen once-stable regions in the United States experiencing an increasing number of earthquakes, and scientists say that the underground injection of chemical-laced wastewater from oil and gas drilling is the reason. They say that the process can activate dormant faults including those that have not moved in millions of years.


According to a new report from the U.S. Geological Survey (USGS), earthquakes of magnitudes 2.5 and greater have been detected in the Ratón Basin in the northern part of the state and in the south near Carlsbad. The Ratón Basin saw a huge increase in the number of earthquakes, beginning in 2001, after oil extraction jumped two years earlier. A 5.2 magnitude quake was recorded in 2011 near the Colorado state line, close to some of the largest wastewater-injection wells in the area.


The USGS’s National Seismic Hazard Modeling Project mapped 50 years of earthquake activity in 17 “induced seismicity zones” across eight states. The areas highlighted are all located near deep fluid-injection wells or other industrial activities. The USGS will begin incorporating manmade earthquake risks into disaster maps used in building codes, insurance rates, emergency preparedness plans and other applications.


As the oil and gas industry and hydraulic fracturing (fracking) keeps booming, researchers think the small quakes will become more frequent and will pose a much greater risk to people living nearby.


In response to these reports, the New Mexico Oil and Gas Association emphasized that the industry is a major part of the state’s economy. The association has recently launched a $250,000 public-relations campaign in New Mexico.


Another new study, this one from Johns Hopkins University, found that buildings throughout Pennsylvania, located in suburban and rural areas near fracking sites, have an overall radon concentration 39 percent higher than those located in nonfracking areas. The study found that a major increase in radon correlated with Pennsylvania’s fracking boom, suggesting that fracking may be releasing radon from bedrock that sits on gas-rich shale. Radon is an odorless radioactive gas formed by the decay of uranium in rock, soil and water. It is the second leading cause of lung cancer worldwide, after smoking.
Clean Water Advocates Compromise with the Dairy Industry

New Mexico’s dairy farms, which are mostly located in the southern part of the state, account for $1.4 billion in economic impact statewide, according to New Mexico State University. Those dairies generate a lot of waste and are subject to the dairy rule, which governs the industry’s disposal of wastewater. The state Environment Department is charged with enforcing the rule.

Last month, thanks to six days of negotiations prior to what was expected to be a week of hearings, the state’s dairy industry and clean-water advocates reached a settlement with the state in only 4-1/2 hours. Points of contention had included the number and locations of monitoring wells, the frequency of inspection reports and the use of synthetic liners in wastewater lagoons. The agreement permits, in certain circumstances, the use of a two-foot clay liner, which is about half the cost of plastic. It also requires dairies to be responsible for cleaning up pollution they cause.

The proposed agreement potentially brings to an end several years of litigation over regulations. This month, the Water Quality Control Commission will vote on whether to approve the agreement.


Santa Fe County Seeks to Transfer Top of the World’s Water Rights

In the late 1990s, Santa Fe County bought nearly 600 acre-feet of water rights from Top of the World Farm near Costilla in northern Taos County and tried to move those rights south. That proposal met a torrent of opposition. Then, in 2006, the county spent $5 million to buy the farm and its remaining water rights, to be used to bolster the Aamodt water rights settlement, which was created to protect groundwater and irrigators in the Pojoaque Basin by building a pipeline system that would divert water from the Río Grande and send it 80 miles downstream to serve residential and commercial users north of Santa Fe.

In January 2015, Santa Fe County and four neighboring pueblos asked the state for permission to transfer 1,752 acre-feet of water rights tied to wells at the farm. Santa Fe County projects that its share of the water rights will not be needed for decades. In the meantime, the county has leased the rights to a company owned by Taos County residents Ed and Trudy Healy, who bought the Top of the World property from the county in March.

The transfer would mean Top of the World could no longer pump water from the Sunshine Valley aquifer. That would essentially dry up the farm, which cultivated hundreds of acres of diverse crops in the 1950s and continued production of barley and alfalfa into recent years. Some argue that halting groundwater pumping would improve the aquifer health and create a healthier river corridor, which runs through the adjacent newly established Río Grande del Norte National Monument.

Last month the Taos County Commission unanimously voted to protest the proposed transfer. The commissioners are concerned that allowing the transfer would open the door for developers in urban areas to buy other highly valued water rights in northern New Mexico, including water the traditional acequia systems rely on. They think that Top of the World water rights should remain in Taos to support potential economic development.


Nonprofits Receive USDA Grant to Promote Healthy Food Choices

Several Santa Fe-based nonprofit organizations will benefit from a $100,000 U.S. Department of Agriculture grant to make it easier for low-income people to have access to fresh, healthy food. The grant is part of the Food Insecurity Nutrition Incentive that was part of last year’s farm bill. The funding will also support established programs that provide education related to healthy eating for families who receive food assistance.

The New Mexico Farmers’ Marketing Association and the Santa Fe Community Foundation’s MoGro (mobile grocery) program were awarded the funding through the Supplemental Nutrition Assistance Program (SNAP). Farmers’ markets around New Mexico accept SNAP payments and offer discounts to SNAP recipients. The Santa Fe Community Foundation’s Healthy SNAP Program provides fresh produce to members of Santo Domingo and Jemez pueblos. La Familia Medical Center clients will also benefit from the funding. La Familia offers integrated cooking and nutrition workshops in collaboration with a dietician and health workers.


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