Dive Brief:

• Public Service Co. of New Mexico (PNM) cannot charge general ratepayers for any portion of a new transmission line because it will only serve one customer, Facebook, state regulators affirmed last week in an order denying rehearing.
• The New Mexico Public Regulation Commission (NMPRC) in April determined PNM's proposed $85 million, 345 kV transmission line and associated facilities, known as the BB2 Project, did not qualify for ratemaking treatment.  
• The decision was based on PNM testimony that the line would only serve a Facebook data center. While the utility has since tried to correct that statement, regulators said the April decision stood because there was no request made to reopen the record.

Dive Insight:

Facebook will need to reimburse PNM for about 46% of the project's cost, or more than $39 million, NMPRC Hearing Examiner Carolyn Glick determined in a proposed order that the commission subsequently adopted.

The project would run adjacent to PNM's existing BB Line, located on lands in Santa Fe and Sandoval counties that are owned primarily by private landowners. The existing line carries 1 GW of wind energy and is fully subscribed, while the new line would be capable of carrying 362 MW and is already fully committed to Avangrid Renewables, a PNM wholesale transmission customer.

A power purchase agreement between PNM and Avangrid has already been approved, allowing for PNM to purchase 166 MW of output at the La Joya wind farm to meet Facebook's increased load. The remaining 196 MW of capacity would be used to deliver energy from future wind farms developed by Avangrid.

"The BB2 Line would be built to meet the needs of only two PNM customers: Facebook and Avangrid," Glick concluded in her proposed order, which the commission adopted. "None of the BB2 Line capacity is needed to meet the needs of PNM's other retail customers."

In corrected testimony, PNM indicated the transmission line is a "network upgrade" with broader system benefits. The Coalition for Clean Affordable Energy and New Mexico Industrial Energy Consumers had also asked the commission to reconsider its decision.

But according to Glick's order, "once electrons enter PNM's system, they cannot be traced. Therefore, while the La Joya energy may be delivered to PNM retail customers other than Facebook, that energy is not necessary to serve them, nor is the Proposed BB2 Project."

There is concern about the decision's potential impact on economic development in the state.

"This has the potential to have a real chilling effect as we attempt to bring more businesses to New Mexico," a spokesperson for Gov. Michelle Lujan Grisham told the Associated Press.