Nm Prc Recusal of Montoya and Lyons 2014

8/10/2019 Nm Prc Recusal of Montoya and Lyons 2014

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BEFORE THE NEW MEXICO PUBLIC

IN THE MATTER OF THE APPLICATION

)

OF PUBLIC SERVICE COMPANY OF NEW )

MEXICO FOR APPROVAL TO ABANDON

)

SAN JUAN GENERATING STATION UNITS

)

2 AND 3, ISSUANCE O F CERTIFICATES )

OF PUBLIC CONVENIENCE AND

)

NECESSITY FOR REPLACEMENT POW ER)

RESOURCES, ISSUANCE OF AC COUNTING

ORDERS AND DETERM INATION OF )

RELATED RATEMAKING PRINCIPLES AND)

TREATMENT )

)

PUBLIC SERVICE COMPANY OF NEW )

MEXICO,

)

Applicant.

)

)

REGULATION COMM[S_SJON

Case No. 13-00390-UT

MOTION AND SUPPORTING BRIEF OF NEW ENERGY ECONOM Y FOR

RECUSAL OF PUBLIC REGULATION

COMM ISSIONERS MONTOYA AND LYONS

New E nergy Economy (NEE) requests tlhat Public Regulation Commissioners Karen Montoya

and Patrick Lyons sitting on the Public Regulation Commission (PRC) recuse themselves from

participating in o r deciding the above-captioned matter. The grounds for this M otion are as

follows:

Applicable Standard

1. New Energy Economy now takes the extraordinary step of moving for the recusal

of two members of the PRC, Patrick Lyons and Karen Montoya, because of the evidence of ex-

parte contacts during the course of this proceeding and immediately preceding PNMs filing that

in some cases directly concern issues in this case and in other cases are likely to have concerned

issues in this case. In addition, with very limited discovery of information, NEE has been able to

show that there are ongoing and regular contacts, both social and professional, between senior


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management and lobbyists of PNM and these two commissioners that create the appearance of a

conflict of interest sufficient to disqualify them. In order to further support this motion and to

understand the extent of the ex parte contacts between PNM and PRC Commissioners, NEE

served interrogatories and document requests on PNM to obtain any communications between it

and PRC commissioners but PNM refused to respond, claiming that the requests were not

calculated to lead to the discovery of admissible evidence. See NEEs Seventh Set of

Interrogatories and Requests for Production to PNM and PNMs response of December 22, 2015.

NEE has initiated first steps necessary figr a Motion to Compel, but believes that, out of caution,

it should file this motion promptly and before the hearing begins so that its position is known by

the affected commissioners and PNM.

2. PRC adjudications are governed by the same due process protections and

formalities as other administrative or court adjudications. The federal Administrative Procedures

Act (APA), 5 U.S.C. 556 & 557, prescribes the same hearing requirements for adjudications

and formal rulemakings and that both shall be "conducted in an impartial manner." See also N.M.

State Racing Commn v. Yoakurn,

113 N.M. 561,564, 829 P.2d 7, 10 (Ct. App. 1991)

citing 2

Am. Jur.2d Administrative Law 350, 162 (1962) for the proposition that "Rules and regulations

of an administrative agency governing proceedings before it, duly adopted and within the

authority of the agency, are as binding as if they were statutes enacted by the legislature.")

3.

Under New Mexico law, PRC Commissioners must meet an objective standard of

impartiality:

A. A commissioner or hearing examiner shall recuse himself in any

adjudicatory proceeding in which he is unable to make a fair and impartial

decision or in which there is reasonable doubt about whether he can make a

fair and impartial decision, including:


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(1) when he has a personal bias or prejudice concerning a party or its

representative or has prejudged a disputed evidentiary fact involved in a

proceeding prior to hearing. For the purposes of this paragraph, "personal bias

or prejudice" means a predisposition toward a person based on a previous or

ongoing relationship, including a professional, personal, familial or other

intimate relationship, that renders the commissioner or hearing examiner

unable to exercise his functions impartially

2006 New Mexico Statutes - 8-8-18; Gila Res. Info. Project v. N.M. Water Quality Control

Commn, 2005 NMCA 139, 37 ("concepts of fairness and transparency" apply to "administrative

proceedings"). The standard established by Section 8-8-18 is consistent with the Governmental

Conduct Act, NMSA 1978, Sections 10-16-1 through 10-16-18, the Financial Disclosures Act,

NMSA 1978, Sections 10-16A-1 through 10-16A-8, and 20.1.1.111NMAC

~

and "is in essence a

paraphrase of a federal statute governing the disqualification of judicial branch judges, see 28

U.S.C. 455(a) (1994) (A judge shall disqualify himself [or herself] in any proceeding in which

his [or her] impartiality might reasonably be questioned.), as well as New Mexicos Code of

Judicial Conduct dealing with disqualification of state judges, see NMRA 1997, 21-400(A) (A

judge is disqualified and shall recuse himself or herself in a proceeding in which the judges

impartiality might reasonably be questioned

....

) City of Albuquerque v. Chavez,

1997 NMCA

54, 16. Under this objective standard:

The inquiry is not whether the Board m embers are actually biased or

prejudiced, but whether, in the natural course of events, there is an

indication of a possible temptation to an average man [or wom an] sitting

as a judge to try the case w ith bias for or against any issue presented to

him [or her].

Id., quoting Reid v. New Mexico Bd. of Exam rs in Optometry,

92 N.M. 414, 416, 589 P.2d 198,

1 20.1.1.111NMAC addressing impartiality: "No board mem ber shall participate in any action in

which his or her impartiality of fairness may reasonably be questioned..."


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200 (1979). Presiding board members ":must act like a judicial body bound by ethical standards

comparable to those that govern a court in performing the same function." Id. (emphasis added)

(quoting High Ridge Hinkle Joint Venture,

119 N.M. at 40, 888 P.2d at 486),

Los Chavez

CommunityAssn v. Valencia Cty., 277 P.3d 475,482-83 (N.M. Ct. App. 2012). Our Supreme

Court has determined it to be "imperative" that when governmental agencies adjudicate the legal

rights of individuals they "use the procedures which have traditionally been associated with the

judicial process." Reidv. N.M. Bd. of Examrs in Optometry, 92 N.M. 414, 416, 589 P.2d 198,

200 (1979). And, while such procedural matters as the rules of evidence or hearsay need not be

adhered to by administrative agencies to the same degree as in a court of law, the right to an

impartial tribunal is held to the higher standard.

The rigidity of the requirement that a tribunal be impartial and disinterested in the result

applies more strictly to an administrative adjudication where many of the customary safeguards

affiliated with court proceedings have, in the interest of expedition and a supposed administrative

efficiency, been relaxed.

Id.; see also Ohio Bell Tel. Co. v. Pub. Utils. Commn, 301 U.S. 292,

304, 57 S.Ct. 724, 81 L.Ed. 1093 (1937) (suggesting that in the adjudicative role of

administrative agencies: "All the more insistent is the need, when power has been bestowed so

freely, that the inexorable safeguard of a fair and open hearing be *483 maintained in its

integrity." (internal quotation marks and citations omitted)). Los Chavez Community Assn v.

Valencia County 277 P.3d 475,482 -483 (N.M.App., 2012) Based on the available evidence and

the objective standard of impartiality, Commissioners Montoya and Lyons should recuse

themselves.

4.

Pursuant to NMAC 1.2.2.38 B (3) "A commissioner may be disqualified for


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violation of the code of conduct adopted by the commission." Commissioners, like Board

members, must follow the codes of conduct and rules of procedure of their own administrative

bodies.

Atlixco Coalition v. County of Bernalillo,

1999 NMCA 88, 16. According to the PRC

Code of C onduct, a Comm issioner is required to:

a

Obey both the letter and the spirit of all laws and regulations; [...]

c)

While recognizing that some laws may be subject to varying interpretations,

strive nonetheless to implement the spirit and purpose of each law; [...]

f) Treat the office of Commissioner as a public trust by using the powers of the

office solely for the benefit of the pub lic rather than for any personal benefit; [... ]

Both Commissioners Montoya and Lyons took an Oath of Ethical Conduct, which in part states:

I shall scrupulously avoid any act of impropriety or any act which gives the appearance of

impropriety. See Exhibit A.

Violations of Code of Conduct

5. Exhibit 1 provides ample evidence of both acts of impropriety and acts that give

the appearance of impropriety. Exhibit 1 reveals frequent phone com munications between

Commissioner Patrick Lyons and representatives of Public Service Company of New Mexico

(PNM). Note that these records only include phone conversations between Commissioner Lyons

and PNM representatives

2

between December 2013 and July 2014, and only between

Comm issioner Lyons PRC-issued cell phone and the numbers of a few identified PNM

representatives. They do not include any phone communications between Com missioner Lyons

2 When asked at his deposition, Ron Darnell (Senior V.P. for Public Policy for PNM) was asked,

"Do you hav e a personal cell phone numb er for Karen Montoya?" M r. Darnell answered: "I have

an office number and I have a c ell number." ... "How many times have you called Karen

Montoya on her cell phone?" After an objection, Mr. Darnell answered: "Its rare." "What does

rare mean to you?" M r. Darnell answere, d: "Less than ten times a year."


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and PNM representatives that may have occurred on one of the Comm issioners landlines or

personal cell phone. Nor do they include communications with any other staff, consultants,

lobbyists or other representatives of PNM.

Calls to or from Commissioner Lyons PRC-issued cell phone and the numbers of a few

identified PNM representatives:

July 30, 2014 - Call between PRC Commissioner Lyons and Senior Vice

President for Public Policy Ron Darnells cell (505.362.5075)

June 24, 2014 - I_,yons and Ron Darnells cell (2 separate calls); 10:50am

(PNM RCT hearing scheduled from 9am to 1:30pm) and at 5pm same day

3

June 11, 2014 - Director Strategic Affairs Mary Collins cell

(505.242.2010)

June 10, 2014 - Ron Darnells cell

May 21, 2014 - Lobbyist Ernest CdeBacas cell (505.379.3946); 2

separate calls

May 20, 2014 - Mary Collins cell

May 16, 2014 - Ernest CdeBacas cell

May 8, 2014 - Ron Darnells cell (2 calls)

April 23, 2014 - Ron Darnells cell

April 17, 2014 - Vice President of Regulatory Affairs Gerard Ortizs

office number (505.241.2561)

April 17, 2014 - Gerard Ortizs cell number (505.450.5008)

April 17, 2014 - Mary Collins cell

3 Note that two calls on June 24, 2014 occurred on exactly the same day as a formal hearing on

PNM s petition to amend the rule on Reasonable Cost Threshold (RCT ) of the renewable

portfolio standards. In fact, one call happened in the middle of the hearing itself.


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March 10, 2014 --Ron Darnells cell

February 15,201,4 - Ron Darnells cell (2 calls)

February 11,201.4 - Ron Darnells cell

January 30, 2014 - Ron Darnells cell (2 calls)

January 29, 2014 - Ron Darnells cell

January 29, 2014 - Ernest CdeBacas cell

January 28, 2014 - Ernest CdeBacas cell

January 27, 2014 - Ron Darnells cell (2 calls)

December 21, 2014 - Ron Darnell s cell

December 18, 2014 - Ron Darnells cell

December 11, 2014 - Ron Darnells cell (2 calls)

There is simply no reasonable justification for cell phone communications between a

Commissioner and a petitioner/regulated entity that average at least one per week - especially

when such calls occur within the scheduled hours of a hearing involving the regulated entity.

When asked at his deposition "how manly phone calls have you received on your cell phone from

Patrick Lyons in the last year?" Ron Darnell answered: "Again, I dont know. Its rare." Darnell

Deposition of October 7, 2014, pp. 74-75.

6.

The following Exhibits consist of email communications and attachments

between representatives of PNM and Commissioner Patrick Lyons or Commissioner Karen

Montoya or their executive assistants, Dallas Rippy and Robert Lara, respectively. In each case,

the content of the emails goes far beyond necessary communications regarding customer service,


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complaints or outages. Together, they clearly demonstrate a close relationship between these

two Commissioners and PNM that clearly violates both the letter and the spirit of the law.

a.

Exhibit 2 is an email from Ron Darnell, Senior Vice-President of Public

Policy for PNM, sent July 21, 2014 to Commissioner Karen Montoya, referencing

a phone conversation about Rule 111 (d) [itself a significant issue in this

proceeding], with an attached "white paper on 111 (d)." Exhibit 2 will be

discussed in further detail below.

b.

Exhibits 3, 4 and 5 all involve a standing weekly meeting that

Commissioner Montoya .appears to have requested with Mary Collins, the

Director of Strategic Initiatives for PNM (According to Mr. Darnell, Ms. Collins

has since left that position; Darnell deposition at p. 80). The email exchanges are

between Mr. Lara and Ms. Collins, including a request (Exhibit 3) from Mr. Lara

that the meetings take place at an Albuquerque Starbucks location rather than the

PNM offices. Exhibits 4 and 5 include personal health information that Ms.

Collins freely offers to Mr. Lara and Commissioner Montoya.

c. In Exhibits 6, 7 and 9, Mr. Lara seeks input and advice from PNMs

Collins to assist Commissioner Montoya in giving panel presentations to an

upcoming conference on regional transmission organizations and distributed

generation. Commissioner Montoya is identified as a member of a panel of

regulators and legislators providing "Regulatory and Legislative

Perspectives

(Exh. 6). Another panel, consisting of industry representatives, was to provide

"Industry Perspectives." Yet Commissioner Montoya turned to PNM to provide

here with the materials for her presentation. Commissioner Montoyas assistant,


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Mr. Lara, provides draft :notes and a PowerPoint presentation to Ms. Collins

(Exhibits 8, 10 and 11), and specifically indicates (p. 5 of Exhibit 8): "Your

thoughts on this debate and its impact on this new method of power generation

and transmission I think would dovetail well into this panel." In other words,

Commissioner Montoya, who was to provide a regulatory perspective, turned to

PNM - a member of"the industry" - to assist her on settling on what her

regulatory perspective should be.

d.

Exhibits 12 through 19 involve another presentation Commissioner

Montoya needs PNM, tbxough Ms. Collins, to help prepare, this time for the Law

Seminar International "Energy in the Southwest" Conference.

e.

Exhibit 12 is an email exchange between Commissioner Montoyas

assistant, Mr. Lara, and PNMs Collins where Mr. Lara indicates "the

Commissioner asked that I get with [Ms. Collins] to assemble some background

research on a few topics so she can lead the discussion." These topics include

distributed generation and the diversity portfolio. The initial request further asks

whether it would "be best to get together to go over some of these topics or do

you [Ms. Collins] want to send me [Mr. Lara] stuff." Ms. Collins responds that

she will "pull together so:me information" and then they can "get together to

review." The remainder of the exchange is about scheduling the "study session"

with Commissioner Montoya. PNMs views on the topics discussed are in most

cases adverse to the views of environmental groups and to the views of many

thousands of members of the public. What is of such concern regarding this and

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the previous interchanges is the implicit assumption that PNMs views and

Commissioner Montoyas views are essentially the same.

f.

Exhibit 13 is a follow-up email exchange where Mr. Lara inquires about

Ms. Collins progress, and Ms. Collins responds, "I have been working on it." She

also attaches graphics specifically for use in the presentation (Exhibits 14 -

17;

Exhibit 15 is a photo of PNMs solar project).

g. Weeks before the presentation, Commissioner Montoya sends Ms. Collins

the PowerPoint presentation, presumably for her input. The email and

PowerPoint presentation are attached as Exhibits 18 and 19). The powerpoint

discusses regional haze and the San Juan closure and includes, as part of

Commissioner Montoya s presentation, what are really PNMs views on a number

of topics, including, for example, PNMs supposed need to recover lost revenue

from roof-top solar installations. ["Priority Three: Action Priorities" Exh. 19]. In

other words, it states PNMs perspective including PNMs disdain for solar

distributed generation and the alleged disadvantages of PNM for customer owned

solar. It also highlights PNMs legislative talking points, which were the subject

of other emails.

h.

In December 2013, Ms. Collins emails Commissioner Montoya a link to

the campaign website of Merrie Lee Soules, a candidate for Commissioner of

PRC District 5 (Exhibit 20). Commissioner Montoya responds appreciatively.

i.

During the 2014 legislative session, Commissioners Lyons and Montoya

are each engaged in email exchanges with PNM representatives about a

legislative measure being aggressively advocated by PNM. Exhibits 21 and 22

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are an email and attachment sent by Ron Darnell to Commissioner Montoya about

legislation that had not yet been introduced. The attachment (Exhibit 22) includes

both PNM talking points and a legislative draft of what would become HB296

when it was introduced approximately one week later. After the bill was

introduced, Mr. Darnell fbrwarded a favorable news article on the bill to

Commissioner Montoya (Exhibit 23) and a link to the legislative website entry for

HB 296 to Commissioner Lyons (Exhibit 24).

j.

In a June 2013 email from Ms. Collins to Commissioner Montoya (Exhibit

25), PNM actually provides the Commissioner with confidential personal

information about one of their customers. Ms. Collins even acknowledges that in

her message, requesting that Commissioner Montoya not share the content of the

email.

k. In November 2013, Ms. Collins sends Commissioner Montoya a press

release (Exhibit 26) hailing the decision of Arizonas public utility commission to

amend their net metering policies to discourage distributed generation of solar

energy.

1. On two occasions in 2014, Mr. Rippy, assistant to Commissioner Lyons,

emails Gerard Ortiz, PNM Vice-President of Regulatory Affairs, for his cell

phone number (Exhibits 27 and 28).

m. Ms. Colllins also appears to be aggressively lobbying Commissioner

Montoya on net metering and PNM concerns with "distributed generation and the

impact on PNM," which is an issue in the case herein and now an issue in front of

the PRC in PNMs current rate case, 14-00332-UT. She sent several emails to

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Commissioner Montoya that contained information hostile to distributed

generation and net metering (Exhibits 29 through 33).

n.

A number of emails from Ms. Collins to Commissioner Montoya (Exhibits

34 through 39) consist of connections to conferences, listserves, and webinars, all

of which appear to align with PNMs regulatory interests. Apparently,

Commissioner Montoya accepted Ms. Collins invitation to the NARUC

Conference. Conference attendance by Commissioner Montoya with PNM,

including dinner together, was admitted to in Ron Darnells sworn deposition

testimony: "Q. Has she gone with Karen Montoya on any type of retreat or

conference or vacation? A. Karen Montoya, Mary Collins, myself, we certainly

have attended NARUC conferences." Darnell Deposition at p. 75 "Q. When you

say that you and Mary Collins and Karen Montoya attended this conference,

where was it and when was it? A. The last conference that I recall Mary and

Commissioner Montoya being at with myself- I believe it was last February in

Washington D.C." Supra,, at p. 76 "Q. And when you were at that conference did

you and Mary Collins and Commissioner Montoya have any meal together? A.

We had dinner once." Supra, at p. 77

o.

Commissioner Lyons has also attended conferences and socialized with

PNM. According to Ron Darnells testimony:

"A. Patrick Lyons has gone to - hes gone to the Dallas NARUC conference in

Denver the summer of- I think the summer of 13. Those are the only NARUC

conferences that I know of that PNM people and Patrick Lyons were at. And then

I was not at - I believe its the - probably not exactly right but like the Western

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Commissioners Conference held in Seattle in early June ....

was not there. Pat

Vincent was on a panel as well as some other CEOs, and I believe Mark Fenton

was at that meeting."

"Q. When youve been at the same conference, a NARUC conference at the same

time with Patrick Lyons,. did you also share any meals together? A. Yes, certainly

we have shared some meals together. Q. And do you know if any PNM people

when they went to the Seattle conference that Patrick Lyons was at, if he shared

meals with PNM employees at that time? A. I believe he did." Darnell deposition,

pp. 78, 79

p.

In Comm issioner Montoyas calendar, attached as Exhibit 40,

Comm issioner Montoya is scheduled to meet with Mr. Ortiz on June 20, 2013 and

with Mr. Darnell at his office in Albuquerque for two hours on July 25, 2013 and

again on August 30, 20134.

q.

Comm issioner Montoya has repeatedly attended sporting events with M s.

Collins: "You know , I think Mary [Collins] might have gone to a baseball game

with Karen to help her out w hen she was on crutches." "I believe Mary C ollins

has golfed in a foursome with Karen Montoya."

80.

ro

Darnell Deposition, at pp. 79,

Commissioner Lyons also attended sporting events with PNMs senior

management: "Patrick and I went to a baseball game in Arlington stadium at the

4 Before PNM filed its Application, on October 29, 2013, Mariel Nanasi and D avid Van W inkle,

of New Energy Economy m et with Cormnissioner Montoya, and discussed general opposition to

further reliance on coal and nuclear and a preference for solar and wind. Unknow n to Nanasi and

Van W inkle were the contents of PNM s filing, other than what was disclosed at public IRP

meetings, and New Energy E conomy had not yet determined to intervene in the case herein.

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summer conference this last summer ....

. Can you tell us about the baseball

game that you and Patrick Lyons went to in Arlington, Texas? A. Sure. It was - a

friend of mine is a former Colorado commissioner. Ray Gifford knows Tony

Clark very well. Tony Clark is a FERC commissioner, and Ray thought it would

be a good idea for Tony to meet Pat so we went to the game. It was hot and

miserable and Patrick and Commissioner Clark hit it off." Damell Deposition, at

pp. 81, 82.

Prohibited Acts

6.

As quasi-judicial officials, Commissioners are held to a higher standard than most

other elected officials. Section 8-8-19 NMSA 1978 addresses acts prohibited of Commissioners

and Commission candidates.

C. A candidate for election to the public regulation commission shall not

solicit or accept:

(1) anything of value, either directly or indirectly, from a person

whose charges for services to the public are regulated by the commission. For the

purposes of this paragraph, "anything of value" includes money, in-kind

contributions and volunteer services to the candidate ...

D. A commissioner or employee of the commission shall not:

(1) accept anything of value from a regulated entity, affiliated

interest or intervenor. For the purposes of this paragraph, a commissioner may

accept allowable campaign contributions when campaigning for reelection. For

the purposes of this paragraph, "anything of value" does not include:

(a) the c, ost of refreshments totaling no more than five dollars

($5.00) a day or refreshments at a public reception or other public social function

that are available to all guests equally;

7. Without discovery from PNM, it is not possible to know the extent to which these

provisions have been violated. However, all of the m aterials, resources and guidance Ms.

Collins provided to C omm issioner Montoya constitute "value," especially since "anything of

value" in the previous paragraph is defined as in-kind and volunteer services. Given the specific

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F. pending adjudication means any matter docketed, or, in the case of a party

represented by counsel, any matter that an attorney representing such party reasonably believes

will be docketed, before the commission, including, but not limited to, formal complaint

proceedings, show cause proceedings, investigations, notices of inquiry other than no n-

adjudicatory notices of inquiry, application proceedings, petitions, and any matter other than a

rulemaking or a non-adjudicatory notice of inquiry requiring decision or action by the

commission.[ 1.2.3.7 NMAC - N, 7-15-04; A, 9-1-08]

EX PARTE COMMU NICATIONS PROHIBITED:

A. A comm issioner shall not initiate, permit, or consider a comm unication directly

or indirectly with a party or his or her representative, outside the presence of other parties,

concerning a pending rulemaking after the record has been closed or a pending adjudication.

11. Exhibit 2 is an email from Mr. Damell, sent July 21, 2014 to Commissioner Montoya, that

references a phone conversation about Rule 111 (d) and attaches a white paper on 111 (d), the

federal greenhouse gas rule that is a critical issue of debate in PNMs case at the PRC on its

proposed replacement power plan. In the email and attachment, Mr. Darnell is clearly trying to

improperly influence Commissioner Montoya about PNMs point of view about the rule, which

is included here as Exhibit 42. There is no doubt that the Clean Power Plan, aka Rule 111 (d), is

an issue in the case herein. Numerous witnesses have referred to this issue, with PNMs

witnesses arguing that the company is "well-positioned" to address it because the company is

shutting down two of the four coal units at San Juan, while New Energy Economy has

vociferously argued that it is risky for PNM to acquire any more coal, a source of energy subject

to progressively tighter regulatory standards and provided at unacceptably high costs to

ratepayers in terms electricity costs and cost to health and the environment.

5

s A few examples to references in PNMs testimony: "Edward Cichanowicz, an independent

consultant providing engineering and analytical services to the electric and energy industries,

addresses the Clean Power Plan Rule and the Coal Combustion Residuals Rule currently under

consideration by the U.S. Environmental Protection Agency ("EPA) and the implications of

these proposed rules for San Juan." Rebttttal Testimony in Support of Stipulation and Response

Testimony on Reserved Issue, Ortiz, p. 5; "As discussed in more detail by Mr. Cichanowicz in

his rebuttal testimony, based on the proposed Clean Power Plan, which I note is focused on state

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12. Exhibit 43 contains an email from Ms. Collins to Commissioner Lyons assistant,

Mr. Rippy in June 2013 requesting to set up a meeting between Commissioner Lyons and Mr.

Darnell "to discuss San Juan." Exhibit 44 is an email about two meetings between PNM and

Commissioner Montoya taking place during exactly the same time frame; it is reasonable to infer

that those meetings were also about San Juan.

13. The Public Regulation Commission has broad powers that affect the daily lives of

all New M exicans. It is absolutely crucial that the Comm ission be held to the highest standards

of integrity, and that New M exicans have faith that their interests are being faithfully represented

by their elected officials.

14. In California, coziness between regulators and regulated entities has led to b oth

federal and state civil investigations.

6

It seems clear from the above-referenced communications

compliance rather than individual utility compliance-a fact that is confused in Mr. Dirmeiers

analysis when he discusses PNMs compliance with the proposed rule-New Mexico is in good

shape to meet the targets established for it, given compliance with the Revised SIP." Rebuttal

Testimony in Support of Stipulation and Response Testimony on Reserved Issue, Ortiz, p. 30,

31. "It is simply not reasonable to assume that there will not be additional costs associated with

greenhouse gas emissions during the twenty-year planning period." (Direct Testimony of Patrick

OConnell, December 20, 2013, p. 18) And, New Energy Economys David Van Winkle testifies

in his Direct Testimony in Opposition to the Stipulation:

PNM claims that it will be "well-positioned to meet anticipated environmental regulations,"

but fails to definitively state that they will meet the requirements of EPAs Clean Power

Plan. (Olson, supra, at p. 60) In fact, PNMs Executive Director of Environmental Services,

Maureen Gannon testifies in her deposition that "in the context of what EPA has proposed

for its state standards under the Clean Power Plan, [PNMs emissions] gets the State very

close to the proposed standard." ... "New Mexico will get within 10% of the Clean Power

Plan." Gannon Deposition of August 22, 2014, pp. 75-76). In other words, they dont make

it with the current proposed replacement plan. Van Winkle, at p. 16

6 http://www.utilit~/dive.c~m/news/federal-pr~secut~rs-t~-investigate-pges-re~ati~nship-with-

cpuc/317855/

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that members of New Mexicos PRC are similarly cozy with PNM - to the potential detriment of

the states consumers, whom the Public Regulation Comm ission is charged with protecting.

15. The substance of Article VI, Section 18 has been part of the New Mexico

Constitution since statehood. "[T]he disqualification of judges for certain causes, raising a

presumption of partiality, has been ever present in our Constitution

....State ex rel. Hannah v.

Armijo, 38 N.M. 73, 83, 28 P.2d 511,516 (1933). The purpose of this provision is based on due

process considerations--"to secure to litigants a fair and impartial trial by an impartial and

unbiased tribunal."

State ex rel. Bardacke v. Welsh,

102 N.M . 592, 603,698 P.2d 462, 473

(Ct.App. 1985) (internal quotation marks and citation omitted). The recusal grounds listed in

Article VI, Section 18 of the New Mexico Constitution are "recognized dangerous sources of

partiality" and were included in the Constitution so as to prevent "the possibility of legislative

detraction in any legislative scheme of disqualification of judges on account of partiality."

Hannah,

38 N.M. at 82, 28 P.2d at 515-16. New Mexico law binds quasi-judicial

decisionmakers to "ethical standards comparable to those that govern a court in performing the

same function." ACP, 2008-NMSC-025, 33, 144 N.M. 99, 184 P.3d 411 (internal quotation

marks and citation omitted). As recently explained by the appeals court, ".... [B]asic safeguards

established by standards set out in the federal and state constitutions, as well as in New Mexico

statutes and rules, all have one goal--to ensure that the decision-maker is not biased. There is no

principled reason to apply the prohibitions in Article VI, Section 18 of the New Mexico

Constitution to judges but not to board members who are acting in an adjudicatory capacity." Los

Chavez Com munity Assn v. Valencia County

277 P.3d 475, 482 -483 (N.M.App., 2012)

16. The PRC and Commissioners Montoya and Lyons have the responsibility,

delegated by the People of New Mexico, to decide what is undoubtedly one of the most

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important energy decisions to face New Mexico, a decision that will have far-reaching

consequences for energy generation over the next 20 to 30 years. NEE has produced evidence

that rises, at the very least, to "an appearance of impropriety" if not evidencing improper conduct

and bias by Commissioners Lyons and Montoya toward PNM, a party in a pending matter before

the PRC Commission. Because of ongoing relationships between these Commissioners and

certain PNM officials and start; evidenced by email and telephonic communications, the sharing

of meals, familiarity with family members and personal health matters, invitations to attend and

joint attendance at entertainment and sporting events, and PNMs assistance in preparing reports

and presentations for Commissioner Montoya, to say nothing of ex parte contacts relating to

matters at issue in this case, both in anticipation of this case and during this case, there is

reasonable doubt that Commissioners Montoya and Lyons will be able to make a fair and

impartial decision regarding approval of PNMs Stipulation. Having deliberately crossed a time-

honored, bright-line boundary that exists between the PRC and a regulated entity with business

before the PRC, there is reason to suspect that these Commissioners at least give the appearance

of bias. This is sufficient ground to require their recusal. The law requires no less.

17. PNMs refusal to provide documents evidencing ex parte communications with

commissioners makes this motion more compelling and, at a minimum, requires that complete

discovery be conducted to establish the nature and extent of ex parte communications between

PNM and Commissioners Lyons and Montoya:

An ex parte comm unication occurs when a board member comm unicates, directly or

indirectly, in connection with a matter before the board, with any person or party, except

upon notice and opportunity for all parties to participate. See Iowa Code 17A . 17(1).

Thus, ex parte com munications, by their very nature, happen outside the record. The

record before the Board is insufficient to address the issue of whether the Boards

decision was illegally tainted by ex parte communications.

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18 The parties positions in the case are as follows:

Southwest Generation Operating Co., LLC takes no position.

No other parties provided their position before this Motion was filed.

WHEREFORE, pursuant to basic principles of justice and fairness, New Energy

Economy respectfully requests that the PRC require Commissioners Montoya and Lyons to

recuse themselves from deciding the case herein.

Respectfully Submitted,

New Em ~omy

Esq.

t43 East Alameda St.

Santa Fe, NM 87501-2229

(505) 469-4060

[email protected]

/S/John W. Bovd

FREEDMAN BOYD HOLLANDER

GOLDBERG URIAS & WARD, P.A.

20 First Plaza, Suite 700

Albuquerque, NM 87102

(505) 842-9960

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BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION

IN THE MATTER OF THE APPLICATION OF

PUBLIC SERVICE COMPANY OF NEW M EXICO

FOR APPROVAL TO ABANDON SAN JUAN

GENERATING STATION UNITS 2 ,AND 3,

ISSUANCE O F CERTIFICATES OF PUBLIC

CONVENIENCE AND NECESSITY FOR

REPLACEMENT POWER RESOURCES,

ISSUANCE OF ACCOUNT ING ORDERS AND

DETERMINATION OF RELATED RATE-MAKING

PRINCIPLES AND TREATM ENT.

PUBLIC SERVICE COMPANY OF NEW M EXICO,

Applicant.

)

)

)

)

)

)

)

)

)

)

)

)

)

)

Case No. 13-00390-UT

AFFIDAVIT OF M ARIEL NANASI

STATE OF NEW MEXICO

)

) ss

COUNTY OF BERNALILLO )

1. My name is Mariel Nanasi.

2.

New Energy Economy received the documents attached to the

Motion and

Supporting Brief of New Energy Economy for Recusal of Public Regulation Commissioners

Montoya and Lyons from the

Rio Grande Sun

pursuant to an Inspection of Public Records

request to the Public Regulation Commi:ssion (PRC).

3.

Upon being duly sworn according to law, under oath, deposes and states: That I

have read

Motion and Supporting Brief of New Energy Economy for Recusal of Public

Regulation Commissioners Montoya and Lyons and believe the contents therein to be true and

correct and to the best of my knowledge and belief.


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Subscribed and sworn to before me by Mariel Nanasi on this the _ ~, ~

2014.

My Commission Expires:

Notary Public

My Comm Expires/~/~ ~/I ~


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NEW MEXICO PUBLIC REGULATION COMMISSION

R~solution No. 01-03-13

2013 Commission Code of Conduct

WHEREAS this duly elected body, on this 3

rd

day of January, 2013, does

hereby recognize the fundamental principle that a public office is a public trust.

This Commission Code of Conduct sets out standards of ethical conduct intended

to foster public trust and proraote confidence in the integrity of government by

avoiding even the appearance c,f self-interest, personal gain or benefit; and

WHEREAS

ethical leaciership sets a good example whereby all citizens are

treated with respect;

THEREFORE, BE IT RESOL VED,

That the Commission shall adopt this Commission Code of Conduct, and

that each Commissioner shall:

a

Obey both the letter and the spirit of all laws and regulations;

b Abide by the law in their personal lives, as well as in their

professional duties, and thus set a good example for all New Mexico citizens;

c) While recognizing that some laws m ay be subject to varying

interpretations, strive nonetheless to implement the spirit and purpose of each law;

d) Facilitate open discussion within the Commission to the maximum

extent permitted by law;

c) Comply with the rules governing the conduct of Commission

meetings;

f)

Treat the office of Commissioner as a public trust by using the powers

of the office solely for the benefit of the public rather than for any personal benefit;

and

BE T FUR THER RESOLVED,

That Commission employees should be encouraged to develop detailed

ethical standards, including procedures for training and compliance; and


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ISSUED under the Seal of the Com mission at Santa Fe, New Mexico this 3rd day of

January, 2013.

NEW MEXICO PUBLIC REGULATION COMMISSION

THERESA BECENTI-AGUILAR, V ~E

CHAIR

).~,r~-i-... i

BEN L. HALL, COMMISSIONER

VALEI~IE

ESPIN~3E,~ COM M~SIONER

KARES L MO~IOIA OOMMIIIIOSE~


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ST.ATE OF NEW MEXICO

PUBLIC REGULATION COMMISSION

January 3, 2013

OATlt OF ETHICAL CONDUCT

, Patrick H. Lyons, duly elected member of the New Mexico Public Regulation

Commission from District 2, do I~ereby recognize the irrefutable principle that a public

office is a public trust and do solem nly swear that:

5. I

shall faithfully support the United States Constitution and the Constitution of

the State of New Mexico.

6.

shall ethically and witl~ integrity discharge the high responsibilities placed

upon me by the Constit~ation of the State of New Mexico and the voters of my

district.

7.

1 shall abide by the spirit as well as the letter of this Oath taken on .January 3,

2013.

8o 1 shall not use my office for personal gain, and shall scrupulously avoid any act

of impropriety or any a.~t which gives the appearance of im propriety.

~PATRICK il. LYONS

~"

COMMISSIONER DISTRICT 2

Nm Prc Recusal of Montoya and Lyons 2014

Documents

Transcript of Nm Prc Recusal of Montoya and Lyons 2014