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NMPRC Orders Extension in PNM Rate Case

May 24, 2016 By Cheryl Kaften

The New Mexico Public Regulation Commission (NMPRC) ordered a 30-day extension on May 18 to the procedural schedule for the general rate case filing (Docket No. 15-00261-UT) submitted by the state’s largest utility, Public Service Co. of New Mexico (PNM).

This order represents the second extension to the schedule and extends the suspension period through August 31 – delaying the earliest implementation of new rates to September 1.

“While today’s extension is within the suspension period allowed by state law, it is disappointing that the implementation date will now be a full year after our filing,” said PNM CEO Pat Vincent-Collawn. “It is unfortunate that, after three weeks of evidentiary hearings, additional bench requests to provide information on past regulatory actions on Palo Verde that do not ultimately change the amount of our request have resulted in a further delay. We do not believe the delay is necessary and our filings more than adequately address the questions regarding Palo Verde.”

PNM filed its request last August 27 for an increase in electric rates of $123.5 million, or 14.4 percent, reflecting a $655 million increase in rate base since its previous general rate case filing in 2010.

Key capital additions to the rate base, as listed in the filing, include:

  • Four new solar centers online by 2016 (40 MW, $65 million) capable of powering 16,200 average homes;
  • La Luz Natural Gas Plant online by 2016 (40 MW, $50 million) to serve customers when demand is highest, to support renewable energy growth and to ensure reliable power under a variety of grid conditions;
  • Emission control equipment at San Juan Generating Station to comply with federal haze regulations ($58 million);
  • Critical resources for the future: Purchasing Rio Bravo Generating Station (formerly Delta Person) natural gas plant ($32 million) and purchasing leases for Palo Verde Nuclear Generating Station Unit 2 ($144 million); and
  • Investments to keep the electric system reliable, including a $61 million investment at PNM’s Rio Puerco Switching Station, $8 million to improve substation security and modernizing the company’s distribution system operations center.

Another driver, according to the company, is declining energy usage resulting from the still recovering New Mexico economy and energy efficiency.

At the time, the utility said, “…the net customer bill increase would average 5.4 percent when other changes – including savings from a new coal supply contract if the San Juan case is approved by the commission – are considered.”

Hearings on the request were held during the month of April.

The bench requests relate to the 64 MW purchases of previously leased Palo Verde Nuclear Generating Station Unit 2 capacity included in the rate filing. The associated leases were set to expire at the beginning of this year and were purchased at fair market value to secure the capacity currently serving retail customers.

These purchases were consistent with both prior NMPRC approvals and all of PNM’s previously filed Integrated Resource Plans, the utility has said. An additional hearing has been scheduled for June 27, which allows the information supplied to be included in the record of the hearing.

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