PRC: Facebook pays for infrastructure

A recent ruling by the Public Regulatory Commission—about the cost of constructing a new electrical substation and transmission lines to accommodate wind energy generation in Torrance County—requires PNM to seek around $39 million from Facebook.

PRC chair Valerie Espinoza told The Independent that “there is a contract between PNM and Facebook, and PNM needs to honor that contract.”

Normally a portion of the cost of improvements to electrical infrastructure is recouped from ratepayers, Espinoza said, but in this case, with a contract in place, consumers shouldn’t have to pick up the cost. “We’re protecting the ratepayer,” she said.

Attorney and hearing examiner for the PRC, Carolyn Glick, told The Independent, “PNM was asking permission to recover that $39 million from all of its retail customers in a future rate case, and what the commission said was no. The only retail customer it can recover that $39 million from is Facebook.”

The BB Substation. Photo by Thomas Campbell.

The new electrical substation, dubbed BB2, would be built next to an existing substation, BB, that lies about five miles north of Clines Corners along U.S. 285, according to maps in the Recommended Decision prepared by Glick. The transmission lines from BB2 would be constructed parallel to the existing line.

Glick explained the total cost of the project would include a portion that is charged to wholesale customers. She cited Avangrid Renewables, who developed the El Cabo wind facility and is planning the La Joya wind project in Torrance County, as a wholesale customer, “Avangrid does purchase transmission capacity from PNM to move its energy over PNM’s lines.”

Asked if Avangrid’srates for transmission could go up to recover the cost of BB2, Glick replied, “Yes,” though adding that the PRC has no jurisdiction over wholesale electrical commerce and that recovery of that part of the cost would be up to the Federal Energy Regulatory Commission.

According to the decision recommendation, “The Commission approved a Special Service Contract (SSC) between PNM and Facebook that requires PNM to procure sufficient renewable energy to meet Facebook’s load as it increases over time at its Data Center in Los Lunas. The Commission approved a purchased power agreement (PPA) between PNM and Avangrid for PNM to purchase the output of the 166 megawatt La Joya wind facility, to be owned and operated by Avangrid, to meet Facebook’s increased load.

“The BB2 Line is necessary to move power from the La Joya facility to PNM’s system. Of the total 362 MW of capacity of the Proposed BB2 Line, 166 MW would be used to deliver wind energy from the La Joya wind farm. The remaining 196 MW of capacity would be used to deliver energy from future wind farms developed by Avangrid.”

The decision recommendation goes on to say, “The BB2 Line would be built to meet the needs of only two PNM customers: Facebook and Avangrid.”

Glick said if PNM is unsatisfied with the unanimous decision, they can file a motion within 30 days to request a re-hearing. Their other option would be to appeal the decision to the New Mexico Supreme Court, she added.

The Director of Corporate Communications for PNM told The Independent, “Right now we are in the process of having conversations with Facebook and our other stakeholders,” adding he will have more information this Friday, April 26. The information will be added to this story at The Independent’s website, edgewood.news, as soon as it appears.

Myra Pancrazio, Executive Director of the Estancia Valley Economic Development Association said there are other wind projects coming and “transmission is really important in the state of New Mexico. We lack transmission.”

She said current projects, the Sandia transmission line, Western Spirit transmission line and the BB2 line, all go through the Estancia Valley.

Addressing the PRC decision, Pancrazio said, “I believe it will get resolved. I believe in all of our agencies and all of the projects.”

Mark Stacy, director of Business Development for Avangrid Renewables said he just hopes they can maintain their schedule. He said he wants to begin work on La Joya this September.

A Facebook spokesperson had not responded to a request for comment as of this writing. Any comment forthcoming will supplement the online story.

In a related story, Torrance County commissioners unanimously approved, without comment, the issuance of an Industrial Revenue Bond for $675 million on Wednesday for Avangrid Renewables LLC. to finance the building of the planned La Joya wind generating facility southwest of Encino.