Commercial, Utilities, Sourcing Renewables  -  April 22, 2019

Facebook hit with $39M utility bill in NM

Facebook will be billed $39 million by PNM, nearly half the cost of a new $85 million transmission line, according to a ruling from the Public Regulation Commission (PRC) in New Mexico.

A report by the Albuquerque Journal says this decision could be seen as reneging on previous PRC commitments, which could have a negative effect on efforts to bring business from large companies to the state. Facebook is currently building a new data center in Los Lunas and has said the decision could affect its operations in New Mexico.

The Commission voted unanimously to approve the order on the grounds that the line from the transmission project “will not benefit retail customers, only Facebook and wholesale electric operators who need the transmission capacity to supply renewable energy to other markets.” The proposed high-voltage line would transmit electricity from a 166-megawatt wind farm being built by Avangrid Renewables to supply Facebook’s data center.

“This new issue is a significant deviation of our understanding of the terms and conditions of our (special service contract) with PNM and its financial implications, creating uncertainty around the long-term costs of our operations in New Mexico,” Bobby Hollis, head of energy and site selection for the Facebook subsidiary Greater Kudu LLC, wrote in a March 29 letter to the PRC. “… (This) contrary interpretation fundamentally restructures the transaction upon which we relied when we decided to locate in Los Lunas.” One of Facebook’s criteria for locating in New Mexico was that its data center could be powered by 100 percent renewable resources.

According to the Albuquerque Journal report, PNM has 30 days to file a motion for a rehearing, or it could appeal the PRC decision to the state Supreme Court.

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