JOURNAL EDITORIAL: PRC can’t allow hardline extremists to put us all out in the cold

“PRC examiner backs PNM coal plant pullout,” read a Nov. 21, 2021, Journal headline.

“PRC denies PNM Four Corners coal plant exit,” read a Dec. 15, 2021, Journal headline.

The Public Regulation Commission and its hearing examiner have been at odds before, like a Hollywood couple going through a defamation lawsuit. So Thursday’s Journal headline, “Examiner: No to NM Gas Co. facility,” should be taken with a grain of salt, as chilling as it may be.

The idea of a state-of-the-art liquefied natural gas facility in Rio Rancho to stabilize prices and increase local natural gas supplies was born in the aftermath of Winter Storm Uri that blew through New Mexico in February 2021, causing blackouts that impacted over 9.9 million people in the U.S. and Mexico.

The Arctic chill from the storm caused natural gas prices to skyrocket to unprecedented levels, forcing New Mexico Gas Co. to shell out $107 million to pay for extra, extremely expensive gas purchases on wholesale markets. Those costs, of course, were passed down to its customers.

To buffer the impact on customer bills, the PRC authorized NM Gas to recover those fuel costs from ratepayers over a 30-month period that began in July 2021. Customers finally stopped paying a surcharge for those high Winter Storm Uri costs last month.

The PRC also asked NM Gas to explore alternative fuel storage options to give the utility more control over its gas supplies and safeguard consumers from steep price hikes during future weather-related emergencies. And it did.

NM Gas in December 2022 asked the PRC to approve a “certificate of public convenience and necessity,” allowing the utility to build and run a $180 million LNG facility in Rio Rancho.

The company currently has no storage facility of its own, relying instead on another company that manages underground salt caverns in West Texas where NM Gas stocks up excess fuel for withdrawal as needed in cold winter months. By building its own LNG storage facility locally, NM Gas can provide more gas-supply reliability for its customers, while also buffering price spikes. The company would use the facility to stock up with cheap natural gas in summer months and then draw on those supplies as needed in winter when prices are much higher.

But not so fast when profit-making is involved. This is New Mexico, where environmental extremists are in the mainstream.

Under pressure from well-organized and well-funded extremist groups who want to “keep it in the ground,” PRC hearing examiner Anthony Medeiros folded like a North Korean won on Wednesday and issued a recommendation advising state regulators not to allow NM Gas to build its proposed LNG facility.

Medeiros sided with extremists like Santa-Fe-based New Energy Economy, whose executive director said NM Gas shouldn’t invest in “new fossil fuel infrastructure.”

Medeiros based his recommendation against affordable gas bills on a flimsy argument that the LNG plant wouldn’t provide the public benefit necessary to justify the facility. He said the gas company didn’t sufficiently investigate alternatives and didn’t prove how the LNG plant would be cost-effective for its customers, especially in light of benefits shareholders would get.

Bingo, there it was in a nutshell: Medeiros would prefer that we all to pay dramatically higher gas bills than allow out-of-state shareholders of NM Gas stock to get a return on their investment. Kim Jong Un must have been proud of the anti-capitalist sentiment.

Medeiros added state regulators should also consider all the organized public opposition to the LNG plant, as if it were based on reality. The out-of-touch Bernalillo County Commission stoked the flames of hysteria in October when it passed a resolution by a 4-1 vote asking the PRC to shoot down the gas plant like a Chinese spy balloon.

Opponents of the LNG plant have also expressed concerns that it could blow up and wipe the Metro, even as some 100 LNG storage plants operate safely in two dozen states. NM Gas proposes to build the 25-acre plant in a low-lying area of a 160-acre parcel just north of Double Eagle II Airport to allay concerns of a catastrophic explosion, but who knew hot showers and warm beds in the wintertime could be so controversial.

Given the doomsday scenarios, it’s going to be up to the three PRC commissioners to be the adults in the room.

NM Gas, which operates in 27 of New Mexico’s 33 counties, has a legal responsibility to have enough natural gas on hand to meet peak demands. It currently does not. Having its own LNG storage facility near Albuquerque would give the company direct access, allowing the utility to immediately withdraw fuel as needed for distribution to local customers within an hour. An in-house storage facility would also eliminate operational costs associated with storing and transporting natural gas from Texas to New Mexico.

The majority of the utility’s 540,000 residential and commercial customers are located in Albuquerque, making rapid access to a local, company-owned storage facility a significant asset.

“Cold winter days are when customers count on us the most, and that’s what this facility is designed to address,” says NM Gas Vice President for External Affairs Gerald Weseen.

The PRC commissioners are expected to make a decision on the LNG plant in March. We hope they don’t let politics stand in the way of progress and that they firmly reject the hearing examiner’s deeply flawed recommendation.

They’ve done it before, they can do it again. Many a New Mexican household budget is counting on it.

And a little lesson on energy realism from Gov. Michelle Lujan Grisham, who appoints the PRC commissioners, wouldn’t hurt.