PNM Argues for 14.4% Spike to Retail Rates
Hearings began on April 11 at the New Mexico Public Regulation Commission (NMPRC) and are expected to continue through April 29 on a request by PNM Resources (Docket No. 15-00261-UT ) for an increase of 14.4 percent – or $123.5 million – to its retail electric rates.
As the state’s largest electricity provider, PNM serves more than 500,000 New Mexico residential and business customers; and has not had a rate hike approved in five years. PNM’s original rate case filing in December 2014 was dismissed by the NMPRC on procedural grounds.
The case is expected to be hotly debated by environmentalists, consumer advocates, and the ratepayers, themselves; with about 20 interveners and 45 witnesses scheduled to testify.
According to the Albuquerque Journal, about 75 protesters were gathered outside the hearing on day one, trying to get the message across that the money would be better spent on renewable energy rather than the fossil fuel generation upon which the utility currently relies.
Indeed, much of PNM’s generation is coal-, gas-, and nuclear-based at this time – although the company also has plans to get four new solar centers up and running this year (40 megawatts [MW], $65 million) capable of powering 16,200 average homes.
Mariel Nanasi, executive director of New Energy Economy, told protestors that PNM is “doubling down” on fossil fuels and asking customers to pay for it, the Journal reported.
“The people must decide our future,” Nanasi said. “We have better ideas about what to do with that $123.5 million.”
Her Santa Fe, New Mexico-based advocacy group says on its website that it is “leading the charge against PNM’s replacement power proposal before the PRC. … We want to make sure New Mexicans are not locked in to another 25 years of coal and nuclear against our wills and our interests.”
However, PNM argues that ratepayers will not have to pay the full $123.5 million out-of-pocket, noting that “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.”
“Since our last general rate increase in 2011, PNM has continued to make significant investments in the electric system to maintain the company’s excellent reliability and to protect the environment, benefits our customers are receiving but not yet paying for,” said PNM Resources CEO Pat Vincent-Collawn. “We’re also proposing the first significant change to rate structure in more than two decades so that bills may be calculated more accurately to reflect how our customers actually use energy today.”
In the rate filing, PNM proposes changes to rate design to better align electric rates with the actual costs to serve customers, while encouraging energy efficiency. Specific regulatory improvements, if approved, would include:
- A Revenue Balancing Account pilot program for residential and small commercial customers, also known as decoupling. This is designed to support recovery of fixed costs that are critical to reliability of service at the lowest cost to customers; and
- An economic development tariff to support state and local efforts to retain and attract companies that provide locally based jobs.
The utility is pushing for authority to proceed by the third quarter of 2016.
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