BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION IN THE MATTER OF AN INQUIRY INTO ) THE STATUS AND EFFECT OF PUBLIC SERVICE ) COMPANY OF NEW MEXICO’S SHUTDOWN ) Case No. 18-00085-UT OF SAN JUAN GENERATING STATION UNIT 1) ORDER REQUIRING RESPONSE THIS MATTER comes before the New Mexico Public Regulation Commission (Commission) on the April 12, 2018 on the Joint Petition for Investigation Regarding San Juan Generating Station Unit 1 Explosion (Petition) filed by New Energy Economy (NEE), 350 New Mexico, Dine Citizens Against Ruining Our Environment (Dine CARE), Barth Care, Food & Water Watch, League of United Latin American Citizens (LULAC), Physicians for Social Responsibility-NM, and Tewa Women United, (collectively, Petitioners). Having reviewed the Petition, the Commission FINDS: 1) The Petition secks the initiation of a formal investigation into the facts and circumstances of the March 17, 2018 coal silo collapse and resulting explosion and fire at Public Service ‘Company of New Mexico (PNM) San Juan Generating Station Unit 1 (SIGS 1) and specifically, an order requiring PNM to provide a narrative explanation, cost/benefit analysis and alternatives assessment supporting PNM’s determination that the Unit 1 incident did not constitute a “material event” under 17.7.3.10 NMAC and PNM’s decision to repair and continue operation of Unit | rather than replace the Unit 1 capacity with an altemative generation resource. 2) In support of the request, Petitioners note that Commission Rule 17.9.16(A)(3) provides that a utility shall maintain a summary of all accidents arising from its operations and make such summary available to the Commission “upon request.” Order Requiring Response Case No. 18-00085-UT Page 13) Petitioners further argue that the Commission should investigate whether the incident constitutes and should be construed as a “material change” to PNM’s proposed Integrated Resource Plan. Petitioners rely on Rule 17.7.3.10 NMAC titled “OBLIGATION TO NOTIFY OF MATERIAL CHANGES AND UPDATE ACTION PLAN” which states: “The utility shall promptly notify the commission and participants of material events that would have the effect of changing the results of the utility’s IRP had those events been recognized when the IRP was developed. As part of this notification, the utility shall explain how this event(s) has changed the action plan.” 4) Petitioners assert it would be unreasonable for PNM to spend additional funds to repair the damage to SIGS 1 in light of its poor operating performance and that PNM’s decision to make such expenditure should be based on a proper identification of the most cost effective resource among feasible alternatives rather than an improperly motivated desire to earn a return on the expenditure through inclusion in rate base, 5) Petitioners assert PNM should be required to consider all feasible alternatives to making an additional capital investment in SIGS 1 by performing repairs in the same manner that the Commission has required PNM to support its decisions to select or continue the use of generation resources. ©) The Commission finds that PNM should be required to file a response to the Petition within thirteen (13) days of this order. ‘The Response should provide a factual statement of the nature and cause of the coal silo incident as well as the anticipated need for and schedule of repairs required to restore SIGS Unit 1 to operation. In addition, the response should address the necessity and appropriateness of the Petition’s request for a cost/benefit analysis, altematives assessment and request for further proceodings. Order Requiring Response Case No. 18-00085-UT Page 27) The Commission further finds that the Commission’s Utility Division staff (Staff) should file a pleading addressing both the Petition and PNM’s response within thirteen (13) days of the filing of PNM’s response. 8) The Commission further finds that the current caption of this action should be revised to read: IN THE MATTER OF AN INQUIRY INTO THE STATUS AND EFFECT OF PUBLIC SERVICE COMPANY OF NEW MEXICO’S SHUTDOWN OF SAN JUAN GENERATING STATION UNIT 1. All subsequent pleadings in this matter shall bear this caption. IT IS THEREFORE ORDERED: A. PNM shall file a response to the Petition within thirteen (13) days of this order. The Response shall provide a factual statement of the nature and cause of the coal silo incident as well as the anticipated need for and schedule of repairs required to restore SIGS Unit 1 to operation. PNM’s response shall also address the necessity and appropriateness of the Petition’s request for a cost/benefit analysis, altematives assessment and request for further proceedings. PNM shall address the effect of the shutdown of Unit 1 on fuel costs in its response. B. The Commission’s Utility Division Staff shall file a pleading addressing both the Petition and PNM’s response within thirteen (13) days of the filing of PNM’s response to the Petition, C. A copy of this Order shall be served on all parties listed on the certificate of service from PNM case 17-00174-UT via email, if the email addresses are known, and only if not known by regular mail. D. This Order is effective immediately. Order Requiring Response Case No, 18-00085-UT Page 3ISSUED under the Seal of the Commission at Santa Fe, New Mexico, this 25th day of April, 2018. NEW MEXICO PUBLIC REGULATION COMMISSION ‘TELEPHONICALLY APPROVED » VICE CHAIR: VALERIE ESPINOZAJCOMMI: PATRICK H. LYONS, COMMISSIONER TYNDA LOVEJOY, COMMI: Order Requiring Response Case No. 18-00085-UT Page 4BEFORE THE NEW XICO PUBLIC REGULATION COMMISSION IN THE MATTER OF AN INVESTIGATION INTO THE PUBLIC SERVICE COMPANY OF NEW MEXICO’S COAL SILO COLLPASE AND EXPLOSION AT THE SAN JUAN GENERATING STATION UNIT 1 AND IT’S FINANCIAL IMPACT FOR PUBLIC SERVICE COMPANY OF NEW MEXICO RATEPAYERS Case No. 18-00085-UT CERTIFICATE SERVICE 1 HEREBY CERTIFY thet a true and correct copy of the foregoing Order Requiring Response issued by the New Mexico Public Regulation Commission on April 25, 2018, was sent via email on April 25, 2018, to the following parties: Mariel Nanasi Mariel@seedsbeneaththesnow.com; Ryan Jerman Ryan jerman@pnmresourees.com; Stacey Goodwin Stacey. goodwin@pnmresources.com; Joseph Yar ivan@nmag.cov; Cydney Beadles Cydney beadles@state,nm.us; Bradford Borman Bradford.borman@state.nm.us; Michael C. Smith Michaele.smith@state.nm.us; Dated this 25" day of April, 2018. NEW MEXICO PUBLIC REGULATION COMMISSION