Sunday, April 2, 2017

Did County Commission Do El Paso Electric a Favor?

El Paso Electric made an interesting announcement recently: its plan to request a rate hike in 2018 in southern New Mexico will be delayed.

It's going ahead as planned in El Paso; but not here.

We owe gratitude to Merrie Lee Soules, Positive Energy Solar, Allen Downs, Rocky Bacchus of One Hour Air-Conditioning, and Steve Fischmann; but also to the City of Las Cruces and the County of Doña Ana. All those folks filed as intervenors in EPE's most recent cases; they questioned and rebutted EPE's “facts” with a clarity the PRC wouldn't have managed without them; and EPE apparently doesn't want to see them again real soon.

So when you pay your electric bill each month, thank these folks that it isn't higher.

Sadly, the County Commission moved to make it a little harder for the County to intervene next time around – and there's always a next time with EPE. A publically-traded corporation exists to make a profit. The current system means EPE gets paid off for capital expenditures. So EPE will do its damndest to built new power plants on very flimsy excuses.

Tuesday the Commission passed a resolution under which each time there's a new rate case, it'll require a vote by the commission to intervene. That sounds innocuous enough, and maybe it won't be a problem; but it's odd. These are 4,000-page cases. I'm doubting the commissioners will wade through that.

The general interpretation of Tuesday's action was that it was meant to pull County Manager Julia Brown's chain. The effect is that if EPE's timing is tricky or it can influence a couple of commissioners, our county commission will fall silent when the utility tries to rip us off.

Commissioner Billy Garrett said the intervenors saved county residents $7.5 million recently. He and Brown pointed out that in complex rate cases things change rapidly, and that Tuesday's change could cause the County to miss important deadlines. I completely agree.

Interestingly, when Garrett proposed an amendment, under which the Commission would have been informed in detail every two weeks and could instruct Brown accordingly, Commissioner John Vasquez (who had proposed the resolution) saw the wisdom in that. Three others didn't. Commissioner Ben Rawson then moved Vasquez's original version, which passed 4-1.

The three new commissioners want to send Brown a message – but their chosen method could end up costing us money. One observer said Rawson might be trying to use the anti-Brown sentiment to help tilt the playing field to ease the utility's course. But Rawson, who voted for the 2015 resolution delegating the matter to Brown, said that when he asked about one matter there was confusion among county management about whether or not the County had intervened. Thus he felt the commission should tighten up control.

It seems sad, coming just days after folks at a Progressive Voters Alliance meeting had congratulated some of the intervenors, including the City and County. I hope the commissioners weren't acting in concert with the utility. I wonder if EPE will spend considerable sums to influence the results of local elections here. Electing commissioners and councillors who'd back off this intervention business could be real profitable.

Meanwhile, the Commission also looks poised to let Bowlin's sell fireworks. I hope Vasquez and Isabelle Solis recuse themselves from that vote. They might mean well, but collecting $2,500 in campaign money from Bowlin's, then voting for a dumb measure that would benefit Bowlin's, wouldn't look real good. 

During a local election in a rural county, $2500 is a lot of money. I hope EPE won't be asking what it buys.

[The above column appeared in the Las Cruces Sun-News this morning, Sunday, 2 April, 2017, and also on the newspaper's website and KRWG's website.  KRWG also broadcasts a slightly shortened spoken version twice on Wednesday.]

[With regard to EPE's situation and rate-hike requests, see also Steve Fischmann's recent column
published in the Sun-News several days ago.  Some of the intervenors prepared a summary of issues with El Paso Electric.   This is the summary from February.  As that summary notes,
"EPE is a sophisticated, publicly traded corporation valued at nearly two billion dollars.  It has enormous resources at its disposal and a shareholder expectation that corporate managers will maximize profits. This is what EPE is doing, relentlessly and without shame, in every position it takes throughout the regulatory process."

Maximizing profits is, of course, exactly what a corporation's job is.  So EPE's highly-paid lawyers and press people are doing their job, full-time, to spin stories their way and camouflage or ignore facts that don't fit their version of events.  That's what they are supposed to do.   Meanwhile the PRC is not necessarily a group that will investigate fully and discover the well-hidden holes in EPE's reasoning.  The PRC does have staff; but it's important than when a $2 billion corporation is spending time and resources to make things look one way, we ought to have at least someone to examine the corporation's version of events and point out errors that could save customers money.  We'd sure like the County to continue participating in that effort.]

[With regard to Commissioners Soils and Vasquez and the fireworks issue, I do not mean to cast aspersions.  I'm not accusing them of anything.  I do not contend that they are legally required to recuse themselves.  On the other hand, it doesn't seem unreasonable to ask public servants to go above and beyond the minimum legal requirements with regard to ethics.  I understand we'll never consistently get that level of ethical conduct from folks running for higher office; but we could try to ask it of local office-holders.]

[NOTE: Allen Downs has pointed out that while my column "focuses on County intervention in rate cases, but the point we interveners tried to make at the County Commission meeting is that it is important for the County to be involved in the cases that precede a rate case. It is during these other cases (renewable energy, Energy efficiency, IRP, CCN) where the decisions to spend money are made.  By the time a rate case rolls around most of the spending decisions have been made and the issue being decided is which expenses can be charged to rate payers and which rate group will pay what share of the increase (in the last rate case it was also determined that rate payers should NOT pay some of the expenses EPE was asking for, thus reducing the overall increase amount)."  In other words, the issue is much wider than merely rate cases; and (in my view) the fact that there are a variety of other varieties of cases, some of which may superficially appear insignificant, heightens the importance of allowing for the more flexible procedure in which the County can intervene without a formal commission vote.  County manager must report at each meeting of any intervention-related developments.  Commission retains control, of course.  If the commission disagrees with an intervention, it can vote to withdraw the intervention, limit it to particular aspects of the case, or simply not to file any substantive papers after the notice of intervention.  Much safer.]

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