Dive Brief:

• The New Mexico state legislature is looking into an impeachment proceeding for three of the state's five utility regulators as tensions mount over implementation of the state's comprehensive clean energy bill.

• State Sen. Jacob Candelaria, D, on Wednesday "asked legislative lawyers to begin exploring impeachment" of Commissioners Jefferson Byrd, Valerie Espinoza and Theresa Becenti-Aguilar. The three commissioners in July voted to bypass portions of the Energy Transition Act's provisions on the San Juan coal plant, which proponents of the law say threatens the securitization provision of the bill, which would secure $320 million in previously approved capital costs.

• Last week, New Mexico Gov. Michelle Lujan Grisham, D, also frustrated with the commission's actions against the ETA​, said she intended to pursue a rapid restructuring of the state's Public Regulatory Commission, according to her office.

Dive Insight:

Energy politics have taken center stage in New Mexico after the midterm elections flipped the governor's seat to the Democrats in 2018, but tensions between regulators and lawmakers have come to a head as the state works to implement its aggressive clean energy law.

Today, I've asked legislative lawyers to begin exploring impeachment of Comm. Espinoza, Becenti-Aguilar, and Byrd. Their behavior is unlawful and an affront to our constitutional order. Their job is simple: apply the law @GovMLG @NMSenDemocrats @NMHouseDems

— SenCandelaria (@SenCandelaria) August 14, 2019

The ETA was signed by Lujan Grisham in March and requires the state to reach 100% carbon-free energy by 2045, and increases the state's renewable portfolio standard to 50% by 2030 and 80% by 2040.

The law is a big step for a state that in 2018 generated 80% of its power from fossil fuels, but drew broad support from labor groups, environmentalists and the state's largest utility, Public Service Co. of New Mexico (PNM), largely because of a provision that secures through bonds the capital costs that still need to be paid off on the 847 MW San Juan coal plant.

But the commission's July decision effectively splits the San Juan retirement plan to focus separately on abandonment and replacement of the plant. The commission placed the abandonment portion in a January docket, likely in order to preserve its ability to conduct a review of PNM's investment in the plant, which the ETA prevents, according to opponents of the law. But some lawmakers say this move is illegal precisely because it skirts the newly-implemented statute

"Just because [the commission] didn't get their way does not mean they don't have to comply with the law. That is an impeachable offense," Candelaria told Utility Dive.

The crux of the conflict between regulators and lawmakers is that the ETA removed the regulatory authority to conduct a prudence review, in other words eliminating the commission's ability to make PNM pay for any imprudent investments it may have made on the San Juan plant, Mariel Nanasi, executive director of the New Energy Economy, which opposed the ETA, told Utility Dive.

"They get 100% [of their depreciated assets] no matter if they were imprudent, no matter if they lied to the commission about the economic viability of San Juan, no matter if they lied to the commission this plant was going to run indefinitely for more than 20 years, etc." she said.

PNM "didn't want to face the scrutiny of the commission, not only on undepreciated assets, but on decommissioning, for instance. So what this law says is ratepayers are on the hook for 100% of cleanup costs regardless of what PNM has done."

The three commissioners who voted to split the proceeding did not respond to Utility Dive's request for comment. Commissioner Cynthia Hall also voted yes on the proceeding, but did so strategically to preserve her ability to seek reconsideration of the vote, she told Utility Dive in July.

The commissioners did not take a stance on the ETA when it was going through the legislature, said Candelaria, making any current opposition "irrelevant."

"Quite frankly, it doesn't matter if these three commissioners don't agree with the [ETA], they could have showed up during the legislative session to oppose it. None of them did," he said. And legislative opposition to the commission is not limited to the ETA, he added. Regulators have also delayed a transmission line stretching from the East Mountains of Albuquerque into the city that would bring in more wind power under the ETA.

"In an area where they really don't have jurisdiction, [the commission is] attempting to assert jurisdiction for the specific purpose … of preventing this wind transmission project from being built," he said. "They are perhaps one of the greatest risks to our state economy at this point."

Candelaria is meeting with the state's legislative counsel next week to request a formal statement from the regulators defending their position.

"Step one" is for the commission "to actually put down on paper why they're engaging in what appears for all intents and purposes to be capricious, politically motivated, personal vendetta-type behavior that has no sound legal support," he said.

From there, the legislative counsel will decide whether to open a committee to review the evidence and recommend articles of impeachment.

"We are not at that stage yet, though I think we may get there," said Candelaria.