Hearing Examiner Recommends PRC Deny New Mexico Gas Company’s proposed Liquefied Natural Gas Plant in Rio Rancho

Santa Fe, NM – February 21st, 2024 – Today PRC Hearing Examiner Anthony Medeiros issued his Recommended Decision in Case No. 22-003039-UT, recommending that the Public Regulation Commission (PRC) deny a Certificate of Convenience and Necessity (CCN) for New Mexico Gas Company’s proposed Liquefied Natural Gas (LNG) plant, and stating that “the preponderance of the evidence weighs decisively against approving a CCN for the LNG Facility.” (RD p. 142.)

New Energy Economy was joined by NM Department of Justice, Western Resource Advocates and Coalition for Clean Affordable Energy in intervening to oppose NMGC’s application, and today our work together on behalf of New Mexico residents was successful.

In considering whether to grant a CCN, a project must be proven to provide a “net benefit to the public,” and the utility must also show that it has considered alternatives, confirming that the resource it is proposing is the most cost-effective among feasible alternatives.

The Hearing Examiner affirmed New Energy Economy’s arguments, finding that NMGC failed to provide convincing evidence of either standard, and that “NMGC failed to perform the rigorous investigation that a prudent utility should perform prior to making a significant resource decision.” (RD p. 143.)

The Recommended Decision states “the evidence indicates that the proposed LNG Facility is not required for NMGC to provide reliable service” and that “while the record shows a substantial benefit to Emera shareholders in terms of after-tax return on equity (ROE) and enhanced earnings with the LNG Facility in rate base, NMGC neglected to provide a corresponding quantification of benefits to ratepayers and, crucially, failed to show that the Facility would be cost-effective for ratepayers.” (RD p. 3,4.)

Internal documents obtained during the case revealed the true intent behind NMGC’s proposed LNG plant – an explicit plan to expand the use of gas and increase ratebase from $833 million in 2023 to $1,229 billion in 2027 “primarily resulting from the construction and ownership of the LNG storage facility[.]” (See attached below.)

New Energy Economy successfully argued that a heightened standard of scrutiny should be applied in this case because the evidence showed that the project was discretionary – i.e. the Facility is not necessary for the provision of adequate service, and not required by any rule or mandate.

Under that scrutiny the strength of public opposition, including the Bernalillo County Resolution opposing the proposed siting of the LNG Facility, the joint letter of opposition signed by over a dozen legislators, and the significant safety and environmental impacts raised by intervenors during the case weighed against approval of the LNG Facility.

Said Mariel Nanasi, Executive Director of New Energy Economy, “Today the people of New Mexico can breathe a sigh of relief. We commend the Hearing Examiner’s diligence and careful application of the law, and look forward to the Commission’s affirmation of the Recommended Decision.

The Hearing Examiner affirmed that a prudent utility must perform a rigorous investigation of alternatives before making a significant resource decision. We say again – now is not the time to be investing in new fossil fuel infrastructure.

Now is the time to invest in efficiency and alternative clean energy sources that will reduce our dependence on fossil fuels and protect New Mexicans from the ravages of climate change.”

LTF – Long Term Forecast, NEE Exhibit 4.