Two New Mexico utility commissioners who have received campaign cash from a solar company and have close ties to its lobbyist approved deals between that company and utilities that will lead to higher costs for customers.
In November 2017, three of New Mexico’s five utility regulators went against staff recommendations when they approved a contract for the solar company, Affordable Solar, to build 50 MW of solar farms and sell them to Public Service of New Mexico (PNM). Commissioners Lynda Lovejoy, Sandy Jones and Patrick Lyons all voted for the deal in the 3-2 decision.
Over one half of Sandy Jones’ contributions and two thirds of Linda Lovejoy’s contributions in the first quarter of 2018 came from Affordable Solar and Zia Energy, which share executives and an office. Jones has received total contributions of $31,875 as of May 14th, 2018; $10,500 came from Affordable Solar, Zia Energy and their employees in 2018 alone (Q1 2018, Q2 2018). Lovejoy has received $7,700 as of May 14th, 2018; $4,500 of that came from Affordable Energy, Zia Energy and their employees in 2018 (Q1 2018, Q2 2018).
The Santa Fe New Mexican previously reported that Affordable Solar’s lobbyist, Mark Fleisher, served as the campaign manager of both Lovejoy and Jones in 2014 and 2018. Further research shows that Jones and Lovejoy have other ties to Affordable Solar through campaign contributions by Zia Energy and its leadership. Zia Energy financial contributors to Jones and Lovejoy include Zia Energy President Ryan Centerwall, also CEO of Affordable Solar, its Directors and Vice President. Centerwall has given $2,000 to Jones and $500 to Lovejoy as of the May 14, 2018 filings.
El Paso Electric (EPE) also recently filed a request to use Affordable Solar as the developer for a $4.5 million community solar project. Santa-Fe based renewable energy advocacy group, New Energy Economy, does not support this deal because EPE chose Affordable Solar to build a new solar farm and did not undertake the appropriate measures to fully consider buying energy from an independent power producer. New Energy Economy has filed a motion in mid-May for Jones and Lovejoy to be disqualified from ruling on the EPE-Affordable Solar docket due to an “obvious appearance of impropriety” according to an attorney within the group.
Earlier this year, Jones also accepted $2,000 from the wife of El Paso Electric lobbyist TJ Trujillo.The Public Regulation Commission Act states that the New Mexico Public Regulation Commission (PRC) candidates are limited to contributions of $500 per election per person.
Close ties to lobbyist; campaign funding from developer
In the 2014 campaign, Lovejoy spent $13,000 of public funds to pay Fleisher to manage his campaign, even when she did not have an opponent. Lovejoy should have returned those funds, as is required by law.
Fleisher also received nearly $6,000 from Jones that same year as a “consultant,” and for “consultant fees.”
Additionally, Affordable Solar recently donated $3,000 to Jones and $1,500 to Lovejoy.
Consumers affected by industry ties
State Director of the Working Families Party in New Mexico, Eric Griego, replied in response to the approval of Affordable Solar’s contract with PNM, “the decisions made by the New Mexico Public Regulation Commission affect the lives of working families in our state. We should know about potential conflicts or ethical concerns involving Commissioners, lobbyists and the industries they represent. NM consumers stand to pay higher rates for their energy if PRC members put the industries they regulate over the public good.”
The contract between PNM and Affordable Solar has Affordable Solar building five solar farms totaling 50 megawatts, and then selling the farms to PNM. PNM will then be able to pass off all of the costs associated with the project to its customers, in addition to earning a profit on the project by placing the expenses in its rate base.
The Santa Fe New Mexican estimated the project cost at $73 million. PNM could instead purchase solar power from an independent party, in which case it would not be able to earn its own profit of 9.6% (15-00261-UT, p. 49) or roughly $7 million – on the solar farms.
Cheaper solar options presented but ignored
Both the hearing examiner and general counsel for the Public Regulatory Commission (PRC) had recommended that the Commissioners reject the contract because there were cheaper solar options available.
The PRC’s hearing examiner recommended that the five commissioners reject the proposed contract as it was not the most cost-effective option. A recent PNM/Affordable Solar contract for Facebook had a price for $29.98/MWh. Lovejoy, Jones, and Lyons approved a solar cost for ratepayers that is 49% higher than the solar costs for Facebook for the same 50 megawatts of power.
PNM rejected two bids from independent solar developers who presented power purchase agreements (PPAs) that were cheaper than the approved $44.63/MWh in response to PNM’s Request for Proposal (RFP) for solar resources. There were only six bids submitted in response to PNM’s request for proposals, which the PRC’s general counsel, Carolyn Glick, said was due to an unfair bidding process.
The general counsel has since recommended that the commission order PNM to immediately issue a new RFP that gives bidders 90 days to respond, and offer access to PNM-controlled sites to PPA bidders if PNM offers access to those sites to turnkey bidders.
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