MINUTES OF THE REGULAR OPEN MEETING New Mexico 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 Stephen Fischmann, 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 Joseph Maestas, 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. New Mexico Public Regulation Commission November 4, 2020 Page 1 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 New Mexico Public Regulation Commission November 4, 2020 Page 2 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. New Mexico Public Regulation Commission November 4, 2020 Page 4 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 New Mexico Public Regulation Commission November 4, 2020 Page 5 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.