BEFORE THE NEW MEXICO PUBLICREGULATION COMM[S_SJON

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 OF CERTIFICATES )
OF PUBLIC CONVENIENCE AND
)
NECESSITY FOR REPLACEMENT POWER)
RESOURCES, ISSUANCE OF ACCOUNTING
)
ORDERS AND DETERMINATION OF
)

Case No. 13-00390-UT

RELATED RATEMAKING PRINCIPLES AND)

TREATMENT
)
PUBLIC SERVICE COMPANY OF NEW
MEXICO,
Applicant.

)
)
)

MOTION AND SUPPORTING BRIEF OF NEW ENERGY ECONOMY FOR

RECUSAL OF PUBLIC REGULATION
COMMISSIONERS MONTOYA AND LYONS
New Energy Economy (NEE) requests tlhat Public Regulation Commissioners Karen Montoya
and Patrick Lyons sitting on the Public Regulation Commission (PRC) recuse themselves from
participating in or deciding the above-captioned matter. The grounds for this Motion 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 exparte 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

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:

(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 members 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 woman] sitting
as a judge to try the case with 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 member shall participate in any action in
which his or her impartiality of fairness may reasonably be questioned..."

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

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 Conduct, a Commissioner is required to:
Obey both the letter and the spirit of all laws and regulations; [...]
a)
While recognizing that some laws may be subject to varying interpretations,
c)
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 public 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 communications 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 representatives2 between December 2013 and July 2014, and only between
Commissioner Lyons PRC-issued cell phone and the numbers of a few identified PNM
representatives. They do not include any phone communications between Commissioner Lyons
2 When asked at his deposition, Ron Darnell (Senior V.P. for Public Policy for PNM) was asked,
"Do you have a personal cell phone number for Karen Montoya?" Mr. Darnell answered: "I have
an office number and I have a cell 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?" Mr. Darnell answere, d: "Less than ten times a year."

and PNM representatives that may have occurred on one of the Commissioners 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 day3
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
PNMs 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.

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,

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,

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

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

10

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

11

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
12

Commissioners Conference held in Seattle in early JuneI....

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 Commissioner Montoyas calendar, attached as Exhibit 40,

Commissioner 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.

Commissioner Montoya has repeatedly attended sporting events with Ms.

Collins: "You know, I think Mary [Collins] might have gone to a baseball game
with Karen to help her out when she was on crutches." "I believe Mary Collins
has golfed in a foursome with Karen Montoya."Darnell Deposition, at pp. 79,
80.
ro

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 David Van Winkle,
of New Energy Economy met with Cormnissioner Montoya, and discussed general opposition to
further reliance on coal and nuclear and a preference for solar and wind. Unknown to Nanasi and
Van Winkle were the contents of PNMs filing, other than what was disclosed at public IRP
meetings, and New Energy Economy had not yet determined to intervene in the case herein.
13

Q. Can you tell us about the baseball

summer conference this last summer ....
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 materials, resources and guidance Ms.
Collins provided to Commissioner Montoya constitute "value," especially since "anything of
value" in the previous paragraph is defined as in-kind and volunteer services. Given the specific
14

definition in subsection 8-8-19(D)( 1 ), Commissioner Montoya solicited, and PNM

provided,research, editing, and other presentation assistance through Ms. Collins Ms. Collins, all
which has value. The precise value is unknown but one could determine the figure quite easily
by simply multiplying Ms. Collins average hourly compensation by the number of hours she
spent assisting Commissioner Montoya. Similarly, the cost could be calculated on the basis of
what an outside consultant would have charged Commissioner Montoya for the same assistance.
8.

Exhibit 41 is a September 25, 2014 email from Cindy Edwards, Assistant to Mr.

Darnell, to Mr. Rippy, Assistant to Commissioner Lyons. The email references a dinner Mr.
Darnell had the previous month with the Commissioner and the Commissioners sister and
brother-in-law and requests the names of the Commissioners relatives.
Ex Parte Communications
9.

The Fourteenth Amendment of the United States Constitution protects citizens

from state action that leads to "deprivations of liberty and property without due process of law."
Mills v. State Bd. of Psychologist Examrs, 1997-NMSC-028, 14, 123 N.M. 421,941 P.2d 502.
The New Mexico Constitutions Due Process Clause echoes the federal one: "No person shall be
deprived of life, liberty or property without due process of law[.]" N.M. Const. art. II, 18.
"Procedural due process requires a fair and impartial hearing before a trier of fact who is
disinterested and free from any form of bias or predisposition regarding the outcome of the
case." New Mexico Brd. of Veterinary Med. v. Riegger, 2007-NMSC-044, 27, 142 N.M. 248,
164 P.3d 947 (internal quotation marks and citation omitted). These principles of fairness are
basic to our justice system. Los Chavez Community Assn v. Valencia County 277 P.3d 475,482 483 (N.M.App., 2012)
10. According to 1.2.3.7 NMAC F and 1.2.3.8 A. NMAC ex parte communications
between Commissioners and a party during a pending adjudication is prohibited:
15

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 nonadjudicatory 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 COMMUNICATIONS PROHIBITED:

A. A commissioner shall not initiate, permit, or consider a communication 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
16

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 Mexicans. It is absolutely crucial that the Commission be held to the highest standards
of integrity, and that New Mexicans 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 both
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-withcpuc/317855/
17

that members of New Mexicos PRC are similarly cozy with PNM - to the potential detriment of
the states consumers, whom the Public Regulation Commission 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 Community 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
18

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 timehonored, 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 communication occurs when a board member communicates, 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 communications, 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.
19

*4 We determine the district court abused its discretion by ruling that further discovery
was not necessary in this case. It is clear that in order for LDMG to have an opportunity
to establish its claim of ex parte communications, LDMG needed to present evidence
beyond that brought before the Board. We conclude the case should be reversed and
remanded to the district court to allow LDMG the opportunity to gather evidence to
support its claim of ex parte communications.
LDMG Corp. v. Webster County Bd. Of Adjustment L 22697730, 2 -4 (Iowa

App.,2003). See, e.g., Portland Audobon Soc. V. Endangered Species Committee, 984 F.2d
1534, 1549 (9th Cir. 1993) ("In the absence of declarations [of the involved parties] denying that
alleged violations of the APAs ex parte communications prohibition occurred, the declaration of

the environmental groups counsel...and the newspaper reports.., are sufficient to warrant a
remand [to conduct discovery.. [therefore we] remand for a vigorous and thorough adversarial,

evidentiary hearing" on the ex parte contacts]7

Here, NEE believes there is more than enough evidence under the foregoing standards to
disqualify Commissioners Lyons and Montoya. At a minimum, NEE is entitled to obtain all
relevant documents in the hands of PNM that related to ex parte communications with these two
(or any other) PRC commissioners. PNM has tellingly failed to indicate that there are no such
documents but, instead, has refused to provide any such documents and has merely lodged a
boiler-plate objection that the request is not calculated to lead to admissible evidence. That
standard, for merits discovery, is inapplicable here, where the issue is not whether PNMs plans
are in the best interests of the ratepayers but, rather, whether NEE and the other objectors are
entitled to the due process protection implicit in having that issue decided by Commissioners
who are free from any appearance of impropriety in their relationships with PNM.
7 Here, it would be Commissioners Lyons and Montoya, and Collins, Darnell, CdeBaca, Gerard
Ortiz, Sayuri Yamada, and perhaps others from PNM who should submit affidavits, including
PNMs lawyers who would likely know of them.
2O

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

/S/John W.

Bovd

FREEDMAN BOYD HOLLANDER

GOLDBERG URIAS & WARD, P.A.
20 First Plaza, Suite 700
Albuquerque, NM 87102
(505) 842-9960

Esq.

t43 East Alameda St.

Santa Fe, NM 87501-2229
(505) 469-4060
mariel@seedsbeneaththesnow.com

21

BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION

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 OF CERTIFICATES OF PUBLIC
)
CONVENIENCE AND NECESSITY FOR
)
REPLACEMENT POWER RESOURCES,
)
ISSUANCE OF ACCOUNTING ORDERS AND
)
DETERMINATION OF RELATED RATE-MAKING)
PRINCIPLES AND TREATMENT.
)

Case No. 13-00390-UT

)
PUBLIC SERVICE COMPANY OF NEW MEXICO, )
Applicant.
)
)

AFFIDAVIT OF MARIEL NANASI

STATE OF NEW MEXICO
COUNTY OF BERNALILLO

)
) ss
)

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.

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

2014.

Notary Public
My Commission Expires:

My Comm. Expires/~/~ ~/I ~

NEW MEXICO PUBLIC REGULATION COMMISSION

R~solution No. 01-03-13
2013 Commission Code of Conduct
WHEREAS, this duly elected body, on this 3rd 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:
Obey both the letter and the spirit of all laws and regulations;
a)
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 may 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;
Treat the office of Commissioner as a public trust by using the powers
f)
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

BE IT FURTHER RESOLVED,
That Commissioners and employees should collaborate and work together to
foster teamwork, mutual support and collective ethical awareness; and
BE IT FUR THER RESOLVED,
That this Commission Code of Conduct shall be applicable to each
Commissioner and to all Commission employees; and
BE IT FUR THER RESOLVED,
That this Commission Code of Conduct shall be reviewed periodically by
the Commission.

ISSUED under the Seal of the Commission 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"1

BEN L. HALL, COMMISSIONER

VALEI~IE ESPIN~3E,~ COM M~SIONER

KARES L, MO~IOIA, OOMMIIIIOSE~

/

STATE OF NEW MEXICO

PUBLIC REGULATION COMMISSION
January 3, 2013

OATIt OF ETHICAL CONDUCT

I, Karen L. Montoya, duly elected member of the New Mexico Public Regulation
Commission from District 1, do lhereby recognize the irrefutable principle that a public
office is a public trust and do solemnly swear that:
!. 1 shall faithfully support lhc United States Constitution and the Constitution of
the State of New Mexico.
2. I shall ethically and with integrity discharge the high responsibilities placed
upon me by the Conslit~Jtion of the State of New Mexico and the voters of my
district.
3. ! shall abide by the spirit as well as the letter of this Oath taken on January 3,
2013.

4. ! shall not use my office for personal gain, and I shall scrupulously avoid any act
of impropriety or any a.~t which gives the appearance of impropriety.

KAREN L.
~YA
COMMISSIONER DISTRICT 1

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 solemnly 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 impropriety.

~PATRICK il. LYONS~"

COMMISSIONER DISTRICT 2