July 12, 2021
New Mexico

Rarely heard of, officials wield power over New Mexico utilities

By Rick Ruggles | The Santa Fe New Mexican | Jul 11, 2021 | www.santafenewmexican.com

Bill Herrmann went to an audiologist for a hearing test a few years back and, when asked about his line of work, responded that he was a hearing examiner.

The audiologist expressed delight in finding a comrade in the profession, but Herrmann had to correct him.

Hermann was a different kind of hearing examiner.

Now retired after 30 years with the Public Regulation Commission as a hearing examiner, Herrmann was in a far different business. His profession requires both keen ears and sharp eyes while reviewing hundreds or thousands of pages filed by companies, expert witnesses, critics and supporters in tough cases involving utilities and some other industries.

In short, a hearing examiner lays out the facts of cases before the commission and recommends how to proceed. If the matter requires a hearing, he or she also serves as a quasi-judge in those proceedings.

And though hearing examiners frequently labor in obscurity, they occasionally become critical to cases in which tens or hundreds of millions of dollars are at stake. The most recent example is the proposed merger between Public Service Company of New Mexico and Avangrid of Connecticut, in which hearing examiner Ashley Schannauer has made one noteworthy ruling after another.

Schannauer has handed down high-profile orders involving Avangrid’s performance in other states. He has ruled Avangrid’s parent company, Iberdrola of Spain, must be an official participant in the proceedings. He has determined that the contents of a 2020 letter between Iberdrola and PNM aren’t confidential, despite their claims.

Schannauer also publicly scolded Avangrid and PNM for failing to volunteer information about penalties incurred by Avangrid subsidiaries. “Am I the only one who’s troubled by this?” he asked a group of attorneys involved in the case in May. “Have I missed something in the record?”

Later that day, he wrote in an official order that the lack of openness was “relevant to the credibility of their witnesses’ testimony and the transparency by which Avangrid and PNM would conduct their business in New Mexico if the merger is approved.”

Schannauer declined to be interviewed, as did the five other hearing examiners employed by the Public Regulation Commission. But Schannauer’s actions have signaled the clout people in that role can carry.

Nevertheless, when it comes to a decision on whether PNM and Avangrid will merge, Schannauer will make only a recommendation. The five-member, publicly elected commission will make the final call.

Schannauer’s work has brought a new interest in the work of the examiners, who sort through volumes of information to help the commissioners understand the relevant details in a case.

“They’re the backbone of the agency, in my opinion,” said PRC Commissioner Cynthia Hall of Albuquerque.

A former commissioner, Valerie Espinoza of Santa Fe, said Schannauer is doing what he’s supposed to do.

“He’s really stepping up to the plate to grill them,” said Espinoza, a commissioner until the end of last year. “I don’t think he wavers at all.”

Though Schannauer has been exacting in the merger case, Pat Vincent-Collawn, chairman, president and chief executive officer of PNM Resources, said in May she wasn’t troubled by Schannauer’s criticism.

“Do I blame the hearing examiner for getting grumpy?” she said. “Absolutely not. That is a tough job.”

She and representatives of Avangrid said when the hearing examiner wants more information, they give it to him. It’s all part of the process, Collawn said.
A key cog in the process

Herrmann, who was a commission hearing examiner for three decades before retiring in late 2018, said the job involves, foremost, consideration of the public interest. Many times a utility company’s proposal meets that test, he said.

A hearing examiner also must be unbiased toward utilities and their “intervenors,” who are sometimes critics of utilities’ proposals. Hearing examiners read and hear the testimony of the utilities and intervenors, and do their own research as well.

Commissioner Joseph Maestas of Santa Fe said the hearing examiners “bring order and structure to a case.”

“We can only rule on what’s in the record,” Maestas said, adding that’s why it’s vital that hearing examiners assemble thorough reports.

Their work “is at the core of the PRC’s function,” he said.

“We could have a record of thousands of pages,” said Herrmann, 74, who was chief hearing examiner for the commission in his final 13 years of work.

Collawn said that explains the pressure on a hearing examiner.

“He’s got a lot of reading to do,” she said. “He’s got a lot of diverse opinions” to sort through. “He’s got a commission, right, that he works for that he needs to make happy.”

The commission has jurisdiction over utilities and electric rates to customers and also issues orders affecting telecommunications, ambulances, towing and moving services, railway standards and pipeline safety.

James Martin, a Public Regulation Commission hearing examiner for about six years before retiring 11 years ago, said many routine and uncontested cases don’t require a hearing examiner.

“If it looks like the case may be fairly complicated, or there’s a lot of money at stake, or there are a lot of issues to resolve, it will generally go to a hearing examiner,” Martin said.

Commission decisions may be immediately appealed to the state Supreme Court. That happened just last month when El Paso Electric Company said it would appeal a ruling on its retail electric rates.

Herrmann said hearing examiners’ work is typically low in volume of cases but high in complexity. The commission usually follows their recommendations but sometimes accepts only parts of it and occasionally overturns it completely.

Commission Chairman Stephen Fischmann of Las Cruces said hearing examiners – the commission employs six, all attorneys – try to make sure they gather the important information pertaining to a case.

“They’re kind of a unique breed that … can dig into all of those details and make sense of it,” Fischmann said. “Hearing examiners have to be really vigilant to be able to cut through all of the obfuscation to get to the kernel of the issue.”

Fischmann said lawyers representing the parties involved often advance their own clients’ interests and the examiners “have to somehow cut to the truth.”

Their recommendations tend to be “right on point,” said Commissioner Theresa Becenti-Aguilar, who represents northwestern New Mexico. They provide “a thorough discussion” through considerable research, she said.
‘Open mind, not an empty mind’

Hearing examiners, sometimes called administrative law judges, give public boards, commissions and agencies recommendations on complex matters and cases throughout the country. There are about 35 doing the job for agencies of the state of New Mexico, according to the state Personnel Office.

State law doesn’t provide detailed guidance to hearing examiners, but their findings are generally guided by previous commission findings and court decisions, commission rules and the facts admitted into the record.

Albuquerque attorney Jason Marks, a former commissioner, said that while a hearing examiner cannot hold grudges, that doesn’t mean he or she has to enter cases with a blank slate. He said there is an adage that hearing examiners “must have an open mind but not an empty mind.”

“In general, they’re not afraid to go where the facts and the law take them,” he said.

Commission records show the pay for hearing examiners ranges from Schannauer’s $111,946 down to the most recent hires over the past couple of years, who make $88,858. Schannauer has been a hearing examiner for the commission since 2004 and is the chief of that group, with input into who takes on which cases. The commissioners themselves make $90,000 a year.

Marks said hearing examiners could make more money as private attorneys, but service as a commissioner or an examiner is considered an honor by many.

Hearing examiners serve a vital role, Marks said, and have an impact on the state’s progress.

The commission’s decision on the proposed PNM and Avangrid merger, for instance, may have an impact on how the state handles renewable energy such as wind and solar for many years.

“It’s a desirable position for many attorneys,” Marks said. “You get to work in the public interest.”

Hearing examiners also play the role of presiding officer when cases cannot be settled among key parties and hearings are required. Hearings are quasi trials and the examiner is a quasi judge in those cases.

Martin said hearings can drag on for days, but they can have flashes of drama. “Major contested cases can have dramatic moments,” he said. He said he presided over some hearings in which he informed testy participants that outbursts wouldn’t be tolerated.

The merger proposal between PNM and Avangrid is scheduled for a series of hearings in August.

Though their influence is significant, Herrmann said hearing examiners tend not to be lobbied by state leaders, businesses or organizations. But commissioners themselves might be. “Why go to the middle man?” he asked. “Go to the top.”

A history of dysfunction and some commissioners through the years running afoul of the law helped lead the state’s voters last year to turn the five-person elected commission into a three-person appointed commission beginning in 2023. A new commission, however, still is likely to need hearing examiners.

Fischmann said hearing examiners need patience to bore through cases. They also usually need to keep their cool, he said. But there are times, he said, when a hearing examiner must make his frustrations known, as Schannauer did with the subject of disclosure of penalties faced by Avangrid subsidiaries.

“Sometimes,” Fischmann said, “you have to fire a shot over the bow.”

URL to article:  https://www.wind-watch.org/news/2021/07/12/rarely-heard-of-officials-wield-power-over-new-mexico-utilities/