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NM regulators stand by order that PNM bill Facebook for transmission line

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NM regulators stand by order that PNM bill Facebook for transmission line

Members of New Mexico's Public Regulation Commission on May 16 denied a request by Public Service Co. of New Mexico to reconsider an order that the company bill Facebook Inc. for partial costs of a transmission line that would deliver power to a Facebook data center.

Commissioners had previously ordered the utility, known as PNM, to bill Facebook for roughly half the costs of the proposed $85 million, 345-kV transmission line, a decision that upset state economic development officials.

PNM planned the line, called the BB2 project, to deliver electricity from the 166-MW La Joya Wind Plant, which is under construction in Socorro County, N.M., to the data center in the town of Los Lunas, N.M., about 45 miles. Facebook subsidiary Greater Kudu LLC is building the data center, which is partially completed.

The PRC in 2018 approved three power purchase agreements through which PNM will supply power to the data center, and the additional transmission capacity was deemed necessary. When PNM applied for approval of the line, it said retail rates would likely not increase because its costs would be recovered through increased wholesale transmission revenues. As the commission noted in its order approving the PPAs, a PNM witness in that case said, "Facebook does not wish, and has not requested, that the cost of the electric service for its data center be subsidized by any other customer." (PRC Case No. 16-0091-UT)

Yet the PNM Resources Inc. subsidiary later said it bungled its initial filing, and on April 29, it asked the PRC to reconsider its request to recover $39 million from ratepayers for the transmission line. (PRC Case No. 18-00243-UT)

In newspaper columns and in a motion asking for a rehearing, PNM argued it did not accurately explain the purpose of the proposed 345-kV line; PNM now says the line will not only benefit Facebook, but that it is also a network upgrade to the company's overall transmission system that will benefit all customers.

But PRC members on May 16 denied PNM's request for a rehearing, saying that the company did not formally present new evidence into the record.

Commissioner Stephen Fischmann said if the record were reopened and PNM presented new facts, he would consider reversing the order.

But, Fischmann added, "If there's no change in the record, no change in the facts, I have a difficult time of opening it up."

Asked if the company would appeal, PNM spokesman Ray Sandoval said in an email on May 16 the company is reviewing its options.

"We are deeply disappointed in the commission's decision today," Sandoval said. "We understand that we created initial confusion but after clarifying the information, we believe the law and precedent should have led the commission to modify their decision."

Avangrid Inc. subsidiary Avangrid Renewables LLC is developing the La Joya Project. Iberdrola SA of Spain is Avangrid's ultimate parent company.