AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• The Public Regulation Commission (PRC) granted Southwestern Public Service Company’s (SPS) application to include a prepaid pension asset in its rate base to earn a return on this asset and to obtain a renewable energy cost rider to recover approximately $22 million of renewable energy procurement costs from non-capped customers. The Attorney General appealed the PRC’s final order, arguing that the approved rates are unjust and unreasonable because the inclusion of the entire prepaid asset in the rate base is not supported by substantial evidence, and the PRC acted contrary to law in allowing SPS to recover the aforementioned renewable energy costs from non-capped customers (paras 1, 24).

Procedural History

• [Not applicable or not found]

Parties' Submissions

• Appellant (Attorney General): Argued that the approved rates are unjust and unreasonable because the inclusion of the entire prepaid pension asset in the rate base is not supported by substantial evidence, and the PRC acted contrary to law in allowing SPS to recover renewable energy costs from non-capped customers (para 1).
• Appellee (New Mexico Public Regulation Commission): Supported the inclusion of the prepaid pension asset in SPS’s rate base and the recovery of renewable energy costs from non-capped customers (paras 8, 35).
• Intervenors-Appellees (Southwestern Public Service Company, Occidental Permian Ltd., and Coalition for Clean Affordable Energy): Supported the PRC’s decision to allow the inclusion of the prepaid pension asset in the rate base and the recovery of renewable energy costs from non-capped customers.

Legal Issues

• Whether the inclusion of SPS’s entire prepaid pension asset in the rate base is supported by substantial evidence and consistent with law (para 8).
• Whether SPS may recover its renewable energy costs in excess of the large customer cap from non-capped customers, and if such recovery is consistent with the purposes of the Renewable Energy Act and lawful under the PRC’s regulations (paras 24, 35).

Disposition

• The Supreme Court of the State of New Mexico affirmed the PRC’s final order, allowing the inclusion of the prepaid pension asset in SPS’s rate base and the recovery of renewable energy costs from non-capped customers (paras 55-56).

Reasons

• CHÁVEZ, Justice:

  Affirmed that SPS is entitled to earn a reasonable rate of return on the investor-funded prepaid pension asset, finding that the inclusion of the entire prepaid pension asset in the rate base is supported by substantial evidence and consistent with law (paras 9-23).

  Held that SPS may recover its renewable energy costs in excess of the large customer cap from non-capped customers. This recovery mechanism is the only viable method of cost recovery consistent with the purposes of the Renewable Energy Act, as it ensures SPS can recover its reasonable costs of complying with the renewable portfolio standard. The allocation of large customer cap costs to non-capped customers does not violate the principle of cost causation and is not precluded by the Renewable Energy Act or the PRC’s regulations (paras 24-54).
  Concurrence:

  VIGIL, Chief Justice; MAES, Justice; DANIELS, Justice; GARCIA, Judge: Concurred with Justice CHÁVEZ’s opinion, agreeing with the reasoning and conclusions regarding the inclusion of the prepaid pension asset in the rate base and the recovery of renewable energy costs from non-capped customers (para 56).