The fate of New Mexico’s largest wind energy project should be decided once and for all next month.
Xcel Energy will defend a proposal for the Sagamore Wind Project, a 522-megawatt wind farm that would be located 20 miles southeast of Portales, at a hearing with the New Mexico Public Regulation Commission on March 7 in Santa Fe.
The project, as well as another wind farm in Texas, are in jeopardy after NMPRC hearing examiner Elizabeth Hurst claimed a proposal by Xcel Energy was retroactive ratemaking, according to NMPRC Commissioner Patrick Lyons.
Lyons said Xcel proposed an undisclosed rate increase before the commission could file a rate case and determine the feasibility of a rate increase.
“When a company builds a facility, whether it be wind, solar, gas, or coal or anything, those rates go in effect after the rate case is filed and all the evidence is looked at — what should be included in there and not included in there — and then the PRC determines that, and we determine what should be in the rate base,” he said.
Approving a rate increase without a case is something Lyons said the NMPRC has never done, and something he isn’t sure is legal.
Xcel Energy Director of Customer and Community Relations Brooke Trammell said, however, that her company’s plans received approval by New Mexico Attorney General Hector Balderas and several NMPRC staff members.
“For a hearing examiner to determine that this arrangement is illegal is interesting, because not only did all the parties work on it in the purview of the commission’s rule and the law in the state of New Mexico,” she said, “but you also have the attorney general who has signed onto it from a customer perspective but also a legal perspective, as has the New Mexico commission staff.”
Trammell said the proposal will help recover the cost of the $1.6 billion project, and without some means of cost recovery in the period it would take to complete a rate case, the Sagamore and Hale project (in Texas) may not be able to move forward.
“Because this is a 1,000 megawatt proposal — it’s Hale and Sagamore — if New Mexico accepts the hearing examiner’s recommendation as she stated, which would allow for zero cost recovery in the interim period, it would be extremely difficult for Xcel Energy to continue with the Sagamore project, and maybe even the Hale project, as planned. This could be a deal-killer in its entirety for the project,” she said.
Before any decision is made, Xcel and Hurst will be given the opportunity on March 7 to make oral arguments defending their stances. The NMPRC’s general counsel will then make a recommendation.
While the commission may make a decision on March 7, Trammell said it is more likely they will deliberate and vote at March 14 or March 21 meetings. She added that the deadline for the commission to decide is March 22.
