Major changes are ahead for the New Mexico Public Regulation Commission (PRC). In 2020, New Mexico voters approved a Constitutional Amendment changing the PRC from five elected commissioners to three appointed commissioners. Historically, PRC commissioners were elected to serve four-year staggered terms; however, beginning January 1, 2023, PRC commissioners will be appointed to serve staggered six-year terms. The commissioners will be appointed through a nomination process involving a PRC Nominating Committee, the governor, and the state senate.
The Nominating Committee is comprised of seven members, each of whom serve four-year terms, giving the committee significant influence over who serves on New Mexico’s utility regulatory body. The first meeting of the Nominating Committee was held on August 1, 2022 to establish the application process for PRC applicants and the committee is slated to interview finalists on November 14, 2022. The Nominating Committee is tasked with selecting nominees to recommend to the governor for appointment and must ensure all nominees are qualified by education, experience, and lack of ties to regulated entities. A majority of Nominating Committee members must vote in support of an applicant’s recommendation to the governor with the consent of the New Mexico senate. A list of at least five nominees for appointment to the PRC must be submitted by the Nominating Committee to the governor for terms beginning January 1, 2023. It is unclear at this time when the governor’s picks will go before the senate for final review and confirmation.
After January 1, 2023, after the initial three commissioners are appointed, the Nominating Committee is required to meet at least ninety days prior to the date a commissioner’s term will end. For the position of the term ending, the Nominating Committee must submit a list of at least two nominees to the governor at least thirty days prior to the beginning of the new term. Importantly, only two members of the PRC may be from the same political party.
Although the constitutional amendment states that a commissioner may only be removed by impeachment, it is currently uncertain whether impeachment is the only route for removal. A still confidential non-binding opinion prepared by New Mexico Attorney General Hector Balderas, according to an opinion piece written by a former PRC Commissioner, allegedly states that appointed commissioners will “serve at the pleasure of the governor, meaning they can be removed by the governor without specified cause.” The legal opinion has not been made public but will certainly influence the discourse around the governor’s powers and the independence of the new PRC.
There are benefits and disadvantages of both appointed commissioners and elected commissioners. Generally, appointed commissioners enact regulatory policy that tends to favor industry stakeholders. On the other hand, elected public utility commissioners tend to enact policies that favor consumers. For example, residential prices trend significantly lower in states with elected regulators.
The five nominations will be presented to Governor Michelle Lujan Grisham for consideration and nomination before the end of 2022.
Please contact Husch Blackwell LLP’s energy regulatory team if you have any questions about developments related to the changes to New Mexico’s changing regulatory environment.