MINUTES OF THE REGULAR OPEN MEETING PUBLIC REGULATION COMMISSION

November 4, 2020

TIME: 9:30 a.m. PLACE: Zoom Virtual Meeting

A quorum was present remotely as follows:

Members Present: Commissioner , Chair, District 5 Commissioner Jefferson L. Byrd, Vice-Chair, District 2 Commissioner Theresa Becenti-Aguilar, District 4 Commissioner Valerie Espinoza, District 3 Commissioner Cynthia B. Hall, District 1

Members Absent: None

Staff Present: Jason Montoya, Chief of Staff Michael Smith, Acting General Counsel Jim Williamson, ASD Division Director Judith Amer, Associate General Counsel Hans Muller, Associate General Counsel Russell Fisk, Associate General Counsel John Reynolds, Utility Division Director

Others Present , Commissioner Elect, District 3 Carl Boaz, Stenographer

CALL TO ORDER

The Open Meeting was scheduled at 9:30 a.m., pursuant to proper notice under NMSA 1978, 10-15-1(c), and the Commission’s Open Meeting Policy. Commissioner Stephen Fischmann, Chairperson, called the Open Meeting to order at 9:30 a.m. through Youtube, with remote access for the public.

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I. PLEDGE OF ALLEGIANCE/STATE PLEDGE

The Pledge of Allegiance and Salute to the New Mexico Flag were recited, led by Commissioner Hall.

Chair Fischmann congratulated Commissioner Hall on her re-election and Mr. Joseph Maestas for his election as Commissioner.

Commissioner Espinoza also congratulated him and invited him to speak.

Mr. Maestas was pleased with the outcome and his victory and as Commissioner-elect, thanked Commissioner Espinoza for her service and to all the PRC Staff for their work while things seemed dire. He commented on the appointment change in Amendment #1 to be embraced by the Executive Branch. He would not be a defender of the status quo but changes in consensus with his colleagues. He is looking forward to it and the business goes on. Hopefully, it will usher a new era for cooperation with the Attorney General and the Legislature.

Chair Fischmann talked briefly about PRC plans for this year’s legislative agenda and offered to share it with Mr. Maestas.

Mr. Maestas thanked him and did want to see it.

II. CONSIDERATION AND APPROVAL OF THE AGENDA

Commissioner Espinoza moved, seconded by Commissioner Byrd, to approve the agenda as presented. The motion was approved on a 5-0 roll call vote with Commissioner Byrd, Commissioner Hall, Commissioner Espinoza, Commissioner Fischmann and Commissioner Becenti-Aguilar voting in the affirmative and none voting against.

Commissioner Byrd noticed that item #3 was to have been removed from the agenda and the motion did not do that.

Commissioner Byrd moved, seconded by Commissioner Espinoza, to remove item 3 from the agenda. The motion was approved on a 5-0 roll call vote with Commissioner Byrd, Commissioner Hall, Commissioner Espinoza, Commissioner Fischmann and Commissioner Becenti-Aguilar voting in the affirmative and none voting against.

Commissioner Fischmann moved, seconded by Commissioner Espinoza to approve the agenda as amended. The motion was approved on a 5-0 roll call vote with

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Commissioner Byrd, Commissioner Hall, Commissioner Espinoza, Commissioner Fischmann and Commissioner Becenti-Aguilar voting in the affirmative and none voting against.

III. CONSIDERATION AND APPROVAL OF PRIOR MEETING MINUTES

• Minutes of October 14, 2020 Special Open Meeting • Minutes of October 21, 2020 Open Meeting

Commissioner Espinoza moved, seconded by Commissioner Hall to approve the minutes of October 14, 2020 and the minutes of October 21, 2020 as presented. The motion was approved on a 5-0 roll call vote with Commissioner Byrd, Commissioner Hall, Commissioner Espinoza, Commissioner Fischmann and Commissioner Becenti-Aguilar voting in the affirmative and none voting against.

IV. CONSIDERATION AND APPROVAL OF PROFESSIONAL SERVICES CONTRACTS • Contract with Sybatech, Inc. for Codepal Services for Fire Marshal

Director Williamson presented the proposed contract and described the purpose of the contract for the State Fire Marshal. He mentioned the grant awards made last year to New Mexico Fire Departments. The one-time cost for this software is $24,000, plus $18,000 annually for maintenance and updates. He clarified that the purchase was sole source and will be listed as such for the record.

Commissioner Hall pointed out a typo on the second line where “Public” was omitted at “Regulation Commission.”

Director Williamson said he would correct that on the document.

Commissioner Fischmann moved, seconded by Commissioner Espinoza, to approve the Professional Services Contract with Sybatech as presented. The motion was approved on a 5-0 roll call vote with Commissioner Byrd, Commissioner Hall, Commissioner Espinoza, Commissioner Fischmann and Commissioner Becenti-Aguilar voting in the affirmative and none voting against.

V. INTRODUCTION OF SPECIAL GUESTS New Mexico Public Regulation Commission November 4, 2020 Page 3

• Brian Haverly will introduce Dennis Arriola and Pedro Azagra Blazquez of Avangrid that has proposed a merger with PNM

Mr. Haverly made the introductions of Mr. Arriola and Mr. Blazquez from Avangrid.

Mr. Arriola thanked the Commission for the opportunity to speak. He described the Avangrid company which operates in two divisions. One is for utility services and owns eight utilities in the northeastern United States. The other division is called Avangrid Renewables and operates 6.6 GW of renewable energy in twenty-two different states including New Mexico in Commissioner Byrd’s district. They are completing their third installation called La Joya. He said New Mexico has a bright future with renewable energy.

Mr. Blazquez introduced himself and noted Avangrid is a global company focused on renewable energy production. He shared the scope of Avangrid in the world and in the US. He pointed out that each entity makes its own management decisions for the locality. He is looking forward to working with the PRC and meeting people in person when it becomes possible.

Commissioner Espinoza welcomed them in Spanish and both men responded in Spanish.

VI. PRESENTATION

• Presentation from David Hudson and Bill Grant from SPS Regarding SPS General Update (authorized by Commissioner Fischmann on 10/23/2020)

David and Bill presentation. Mr. Hudson thanked Chair Fischmann for the opportunity to present. He offered congratulations to Commissioner Hall and warmest regards to Commissioner Espinoza whom SPS has known for a while and her dedication to the people of New Mexico. SPS is one of four entities under Xcel and is a New Mexico corporation out of Roswell originally.

He noted a lot of major activity going on in SPS territory, including the Sagamore Wind Farm south of Portales and two coal plants at Muleshoe and Harrington Station. The map he showed was of the Texas panhandle and southeastern New Mexico.

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Mr. Bill Grant was introduced as Vice-President of Regulatory Affairs. He reported two New Mexico employees have tested positive for COVID-19. Running there are twenty-one employees positive in Texas. They are doing outreach to residential customers amid increasing balances on residential accounts. They started disconnections in Texas but are working out payment arrangements and will continue to work on those arrangements. In Texas, there are 1,700 who were subject to disconnection and only 150 with final notices.

The 522 MW Sagamore Wind facility will have 240 turbines and 121 are already up. They have lots of challenges from the Southwest Power Pool with the pandemic for sourcing materials. They expect Sagamore to be running by December. Earlier they installed 427 MW of wind energy in Texas which are performing well. Last week, they had a severe ice storm and lost 40% of capacity and are still dealing with outages. 148,000 Texas customers were out.

Commissioner Espinoza asked for outage times.

Mr. Hudson said the outages lasted about three days. They had 60 transmission lines down and the storm hit rural areas harder. There were no outages in Amarillo. Icing is one of their biggest fears.

Chair Fischmann asked if Sagamore is staying on budget.

Mr. Hudson said they are on budget and on schedule. The next rate case will be like the last rate case. We have lot of transmission investment going into rate base. A virtual dedication will be held on Sagamore and in-person once the pandemic is past.

Regarding coal plants, Tolk, at Muleshoe, has groundwater issues. We can’t pump steam, so we need to cool it from the Ogalala aquifer. There is only enough water to run until 2026 so we plan to only run it during the four summer months out to 2032. During the 8-month shutdown period, we still need support from wind, so we turn on the generator, detached from coal and it becomes a giant shock absorber for the system. It is a low-cost way to preserve capacity for another six years and integrated. It is unconventional but both stations will be off coal after 2032 and generators can still be used long after that.

At Harrington Station near Amarillo, the county did not meet air quality standards until 2018 and was not meeting the national standards so we worked with Texas on it. The plant is over 40 years old. We put scrubbers on it to continue using coal at a cost of $100 million for each of the three units. So we

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began converting to natural gas. By the end of 2024, they will all be converted and ready for immediate use. So when there is no sun or wind, those will run on natural gas.

With oil and natural gas production in southeastern New Mexico, through the shale oil region, there is tremendous growth and still growing although not as fast, is one of the lowest cost areas in the US to produce oil. Right now there is a pause on new lines and a pull back on capital budgets. At Permian, in west Texas, we are seeing declines.

Advanced Metering Infrastructure is being implemented first in New Mexico because of all the rural accounts. Because of the cost of driving out to the meters, it means we will use these two-way devices and plan to file in March for AMI infrastructure in New Mexico

For the FERC GridLiance update, SPS bought out lines in Oklahoma and we are fighting the inappropriate cost share to customers.

Mr. Grant explained they had the hearing at FERC and filed briefs. It is now called GridLiance that did some updates and now are charging for the updates, but customers don’t benefit and SPS argued at FERC they do not qualify as transmissions. Because of the cost shift, we are fighting on behalf of customers. We think FERC agrees with us. He offered to provide more details upon request.

Mr. Grant provided renewable statistics. On May 8, 2020, 76.1% of their production came from renewables, and on monthly basis, achieved 38.9% in September and an average of 32% total energy off renewable sources.

Chair Fischmann, on AMI, asked if there will be any demand response balancing programs SPS would plan to use.

Mr. Hudson said they already have use rates and definitely will give more options for demand response. 50% of SPS generation is for oil and gas customers. Sometimes we know the outage before customers do.

Commissioner Hall asked if their resource plan would include storage in 2024. What sort of plans does SPS have for that new technology?

Mr. Hudson said SPS has a special group looking at batteries. They are not economical right now. We are the first in the nation to get 80% by 2035 and 100% by 2050. We can get 80% reduction by more advanced renewables

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including nuclear and hydrogen in the future. We know it will take a new technology and have plenty of time before 2045.

Commissioner Espinoza thanked them for the presentation.

• Presentation from Jacqueline Waite and Daren Zigich of EMNRD Regarding Energy Grid Modernization Roadmap, HB 233 (20202); Introduction of Arthur O’Donnell, Fellow from Department of Energy (authorized by Commissioner Fischmann on 10/23/2020

Ms. Waite said grid modernization is still underway. She gave a preview of the action items being considered and a timeline when the public and PRC can review. The action items are recommended actions in the roadmap. HB233 passed this year and the first two parts involve ENMRD in setting up a grant program. They have an advisory group that has met virtually almost weekly since September 3 with a final meeting scheduled on December 10. They split up into work groups, drafting white papers on the action items and will be done in December.

She highlighted where they are focused, considering the whole grid but focused on distribution lines. She referenced the Modern Distribution Guide (from 2017).

With road mapping steps, she showed where they want to go within 10 years and what needs to happen. A baseline report was organized around operational goals in the grid, and they did an analysis of other state regulators. They have identified specific action steps that will serve those operational goals. She pointed out that the road map is aspirational but not prescriptive. They are actions that have merit and show how they could happen. Some were considered for affordability and feasibility. There were 14 action items, some of which might drop out later. She bolded those she felt were of most interest to the PRC. She showed the remaining timeline going to April 2021.

Next, she showed the role of EMNRD to be accomplished with policy solutions to support recommendations; seeking funding for a grid modernization grant program; tracking changes relative to baselined metrics.

There were no questions from the Commission.

Chair Fischmann introduced Arthur O’Donnell who will be working with the PRC, who applied to DOE for a fellowship to work on getting solar in place more cheaply. The fellowship he got is focused on designing rules for more efficient

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vehicle charging around New Mexico. It is also to coordinate across the grid modernization effort (this project). He will check in with the Commission periodically. As a Fellow, he works for all of us so he will interact with all Commissioners. The Fellowship is for one year.

Mr. O’Donnell introduced himself and shared his hope that with his work as a facilitator and researcher, the PRC can prepare to deal with the issues. He will bring them to the PRC and allow the PRC to decide which polices they want to consider. He would be a resource for the Commission. He is already working on the Advisory Group with Ms. Waite on distributive resources and updating the resource manual and helping authorities see what is on the grid. He would develop a white paper on the roadmap as it moves forward. His start date is December 1 and will work for 12 months on it, based on Albuquerque.

Chair Fischmann thanked the presenters and said he is looking forward to great results.

Chair Fischmann reminded the Commissioners about the CE event on Nov 11 through LANL on energy storage.

VII. PUBLIC COMMENT

None signed up for public comment.

VIII. CONSENT ACTION ITEMS

A. Transportation Matters: NONE

B. Utility Matters:

1) 20-00202-UT IN THE MATTER OF THE IMPLEMENTATION OF THE FEDERAL 988 NATIONAL SUICIDE PREVENTION LIFELINE Russell Fisk POTENTIAL INITIAL ORDER

2) 20-00193-UT IN THE MATTER OF THE FORMAL COMPLAINT OF ROBIN SLAY AND JAQUELINE SLAY AGAINST PUBLIC SERVICE COMPANY OF New Mexico Hans Muller POTENTIAL ORDER DISMISSING COMPLAINT

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Commissioner Byrd asked Mr. Muller on the complaint with PNM case if anyone has done meter readings.

Mr. Muller said yes, and they checked the meter which is in compliance. PNM made sure it complies. And they adjusted the bill to the actual usage. The actual use was over the estimate.

Ms. Amer read the captions for both consent cases.

Commissioner Byrd moved, seconded by Commissioner Fischmann, to adopt the orders for these consent cases as presented. The motion was approved on a 5-0 roll call vote with Commissioner Byrd, Commissioner Hall, Commissioner Espinoza, Commissioner Fischmann and Commissioner Becenti-Aguilar voting in the affirmative and none voting against. So Ordered.

IX. REGULAR ACTION ITEMS

A. Transportation Matters: NONE

B. Utility Matters:

3) 19-00286-UT IN THE MATTER OF POTENTIAL AMENDMENTS TO STATE RURAL UNIVERSAL SERVICE FUND RULE 17.11.10 NMAC Hans Muller POTENTIAL ORDER ADOPTING FINAL RULE

This item was removed from the agenda under Approval of the Agenda.

C. PRC Matters:

4) 20-00190-PRC IN THE MATTER OF THE ADOPTION OF AN IMMEDIATE EMERGENCY RULE AMENDING RULES OF PROCEDURE 1.2.2 NMAC TO PROVIDE FOR ELECTRONIG FILING Judith Amer POTENTIAL ORDER CHANGING CASE CAPTION COMMENCING RULEMAKING, ISSUING PROPOSED REVISIONS TO 1.2.2 NMAC AND ISSUING NOTICE OF PROPOSED RULEMAKING

Ms. Amer presented information regarding this matter to the Commission and explained the reasons because of the lingering pandemic. She said it was brought to our attention that the transfer did not comport with actual practice and some rules were out of date, having not been amended for last ten years. She offered to go through each one, but

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the order would just set a notice for rulemaking with a new caption to promulgate permanent amendments. The time frame she proposed was October 15, 2020 for the 180 days allowed, until April 15, 2021. With the deadlines she set out, the record would close on February 26, 2021 and the final order made in March after the end of the Legislative Session. The Public Hearing would take place on February 9, 2021.

The Commissioners had no questions.

Commissioner Hall moved, seconded by Commissioner Espinoza, to issue notice of the proposed rulemaking as presented. The motion was approved on a 5-0 roll call vote with Commissioner Byrd, Commissioner Hall, Commissioner Espinoza, Commissioner Fischmann and Commissioner Becenti-Aguilar voting in the affirmative and none voting against. So Ordered.

X. PUBLIC COMMENT: NONE.

XI. COMMUNICATIONS WITH CHIEF OF STAFF • Discussion with John Reynolds re Statewide Independent Evaluator of Energy Efficiency Programs (Evergreen Economics) Contract Extension

Mr. Reynolds requested support to extend the contract with Evergreen Economics for two years. He had included a memo in the packet on the statutory requirements for evaluation of the programs and the Commission’s task is to choose an independent evaluator. The six utilities affected (3 electric and 3 gas) together spend the ratepayers’ money on these programs. The evaluator is to verify that money is well spent by utilities and how the programs can be improved. The amount of spending on evaluations is $770,000 per year. At this point it is 1.7% of program spending which is relatively low because many other states’ utilities’ costs are 2-4%. Evergreen is in their fourth year and on behalf of the Commission, this is not a PRC budget item. The Evaluator answers to the Commission but the costs are from the six IOUs who cover those through energy efficiency. Evergreen will report in the spring on the 2020 evaluation. A new evaluator was to begin in 2021 but due to the pandemic, Mr. Reynolds asked the contract to be extended two more years. He briefly explained the process used to select the independent evaluator. He reached out to the utilities who were supportive, and they all do support it.

Chair Fischmann asked if Mr. Reynolds is asking for an informal support for that.

Mr. Reynolds said yes and an absence of opposition. New Mexico Public Regulation Commission November 4, 2020 Page 10

Commissioner Hall asked why for two years instead of one. She wanted to make sure the procurement was compliant with State statutes for the contract.

Mr. Reynolds said he recommended two years because of the uncertainty. One year would be okay but this is one that is unique at the Commission. He was open to a change if the Commission wanted.

Commissioner Hall said she trusted Mr. Reynolds’s judgment in these matters.

Chair Fischmann felt the working relationship with Evergreen is superior with what was going on in the past. He asked Mr. Reynolds if that was true.

Mr. Reynolds replied that the prior evaluator did the evaluations for eight years. Evergreen has skills with communicating at the Staff level and has been quite good and they are pleased with Evergreen’s approach. They are particularly strong on analytical skills. Some of it is just a process to evaluate what is working. Unfortunately, with the pandemic, their personnel have not been able to travel as much, but they came in the summer of 2019 and he asked them to come next summer for a statewide perspective on what is going on.

Chair Fischmann announced unanimous consent among Commissioners for another two years.

Mr. Montoya was happy to report that all Staff are doing fine as the pandemic spreads quickly throughout the state. He urged those out doing inspections to continue best practices. The meeting next week is canceled. The next meeting is on November 18 and he is working on a presentation which will be presented virtually at the LFC. He said the transition has been smooth thus far and he is still working on access to the servers.

XII. COMMUNICATIONS WITH GENERAL COUNSEL

Mr. Smith had no communications.

XIII. COMMUNICATIONS WITH COMMISSIONERS

Chair Fischmann added from the earlier discussion about the list of policies or legislative actions we support as the PRC, that he had eight items on which all Commissioners had said yes, one was vetoed and five new items were suggested. He would send those out and then put them on the agenda for November 18, prior to the LFC presentation to discuss.

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Commissioner Espinoza recommended working with Joe Maestas on it. She would provide his email address.

XIV. ADJOURNMENT

Having completed the agenda with nothing more to consider, the meeting was adjourned at 11:10 a.m.

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ATTEST:

/s/ Carl Boaz, electronically signed Carl Boaz, Stenographer

APPROVED: December 16, 2020

/s/ Cynthia B. Hall, electronically signed CYNTHIA B. HALL, COMMISSIONER

/s/ Jefferson Byrd, electronically signed JEFFERSON L. BYRD, VICE-CHAIRPERSON

/s/ Valerie Espinoza, electronically signed VALERIE ESPINOZA, COMMISSIONER

/s/ Theresa Becenti-Aguilar, electronically signed THERESA BECENTI-AGUILAR, COMMISSIONER

/s/ Stephen Fischmann, electronically signed STEPHEN FISCHMANN, CHAIRPERSON

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