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PNM again asks regulators to reverse order to bill Facebook for power line

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PNM again asks regulators to reverse order to bill Facebook for power line

The Public Service Co. of New Mexico asked the New Mexico Public Regulation Commission to reopen a case in which commissioners ordered PNM to bill Facebook Inc. $39 million for a transmission line that will help deliver power to a Facebook data center.

The PRC's decision to order the PNM Resources Inc. subsidiary, known as PNM, to bill Facebook for nearly half the costs of the proposed $85 million, 345-kV transmission line upset state economic development officials and sparked a debate about whether ratepayers should foot infrastructure costs that will benefit mainly the technology giant. The hearing examiner in the case recommended that PNM bill Facebook subsidiary Greater Kudu LLC for partial costs of the line after a PNM official testified that 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."

Saying it bungled its initial request to bill ratepayers for the costs of the line, PNM went back to the PRC. But commissioners unanimously rejected PNM's request to reconsider its order, saying that PNM failed to officially introduce new evidence into the record.

Undeterred, PNM on May 21 filed a motion asking the PRC to reopen the entire proceeding and admit evidence into the record that the company says will show that all retail customers, not just Facebook, will benefit from the line. (Case No. 18-00243-UT)

PNM and Greater Kudu never intended that a special services contract between them be interpreted to allow direct assignment of network upgrade costs to Greater Kudu, the PNM motion said. The PRC previously approved that contract. The PRC should permit PNM to include capital costs of constructing the the BB2 transmission line in base rates, the company argued, because the project is a network upgrade to PNM's overall transmission system.

PNM spokesperson Ray Sandoval said in a statement that the BB2 line is essential for the company to comply with New Mexico's recently passed clean energy bill, which requires 100% carbon-free electricity generation by 2045, and to meet PNM's own goal of 100% carbon-free power by 2040.

"Because of the importance of the BB2 line to an affordable transition to renewables for our customers and the economic impact to our entire state … we filed a motion to ask the commission to use their authority to reopen the BB2 proceeding and consider new evidence that the BB2 transmission line will directly benefit all PNM customers," Sandoval said.

The final order places at risk the development of resources to help meet the new renewable portfolio standard in New Mexico, including the 140-MW La Joya II wind facility, phase two of the La Joya Wind Plant, PNM said.

"Because of the uncertainty created by the Final Order and ratemaking treatment related to the cost of the BB2 project, PNM and the project developer have not reached final agreement on the power purchase agreement," PNM's motion said.

Greater Kudu is building the data center, which is partially complete, in the town of Los Lunas, N.M., about 45 miles from the La Joya plant. Avangrid Inc. subsidiary Avangrid Renewables LLC is building the wind plant in Socorro County, N.M. Iberdrola SA is Avangrid's parent company.

PNM asked for an expedited hearing be scheduled no later than June 6.