Public Service Company of New Mexico is challenging a directive from state regulators that it buy more wind power for its electricity customers.
A PNM spokeswoman initially said the utility would comply with a state Public Regulation Commission order by spending up to $6 million annually for wind power from a New Mexico plant.
But the company, which is a unit of Albuquerque, N.M.-based PNM Resources Inc., changed course last week and now says it will fight the commission's order.
PNM is the state's largest electricity supplier with about 500,000 customers. It and other state utilities are bound by state law to diversify its energy portfolio by providing solar, wind and other alternatives to coal and natural gas.
Utilities can meet renewable energy directives by buying the power directly or purchasing renewable energy certificates from another company that has exceeded state requirements.
PNM wants to buy the certificates, But regulators rejected that tack.
But the commission, led by Democrat Jason Marks, said it would not accept more paper certificates from PNM. It wanted wind power.
"Paper compliance does not achieve the goal of generating more renewable energy," Marks told the Farmington Daily Times.
PNM executives say they were following the law, and should not be ordered to change course to suit the commissioners' desires.
The company wants Marks and the other commissioners to reconsider the order, approved on a 5-0 vote. Even the commission staff said the company's original energy plan complied with the law.
If the commission holds firm, the company could appeal to the New Mexico Supreme Court. Such legal battles typically take more than a year.
PNM's decision to challenge the commission's order that it buy wind power is different from other legal skirmishes between utilities and the state, said Roy Stephenson, director the commission's utility division.
In this case, both sides agree that the company is in compliance with state law. Marks said the question becomes whether an elected commission, trying to diversify the state's energy supply, has the discretion to order a utility to revise its business practices.
On a related topic, the commission is split over the best approach for mandating renewable energy.
Republicans Ben Hall and Patrick Lyons say companies should be free to supply the cheapest form of renewable energy, which now is wind.
What is best for the companies' bottom line is also least expensive to ratepayers, said Lyons, the commission chairman.
Marks' stand is that solar power cannot be ignored by utilities simply because wind is cheaper for the moment.
The cost of solar will continue to drop as the technology expands, Marks said.
