Albuquerque Journal: PNM Rate Case Talks Criticized

January 2011

By Michael Hartranft

Closed-door settlement talks that have produced a tentative deal between Public Service Company of New Mexico and two state agencies over PNM’s pending $165 million rate case aren’t sitting well with one of the utility’s biggest customers.

In a motion filed with the Public Regulation Commission on Thursday, the Albuquerque Bernalillo County Water Utility Authority said the talks have been limited to PNM, the Attorney General’s Office and PRC staff.

“There have been negotiated settlements, but never … in a case this large and not to the exclusion of every business interest and government interest in the state of New Mexico,” Nann Winter, general counsel for the authority, told the Journal in a phone interview.
“What could happen here is the commission, the attorney general and PNM could settle a multimillion dollar, long-term rate case with no other consumer interests at the table,” Winter said. “On Jan. 20, we could be put in a position of take it or leave it.”

The water authority could potentially see its electric bill escalate from $10 million to $13.5 million a year under PNM’s proposal, she said.

Attorney General spokesman Phil Sisneros disagreed with Winter’s version of events.

“The Attorney General’s Office main and first responsibility is to residential and small business ratepayers,” he said. “These negotiations evolved after the larger users … were asked repeatedly to become involved. They chose not to negotiate so you can make your own conclusions.”

Winter countered: “We absolutely dispute that. We have been told repeatedly they’d get back to us when they had a document.”
In a statement, PNM said whatever settlement stipulation is filed won’t be approved without a hearing by the Public Regulation Commission and an opportunity for intervenors to be heard.

PNM said it had reached out to other parties, including the water utility authority, “and are continuing to do that and to share information as we can.”

In the original rate filing in June, PNM asked for a $165 million — or 21.2 percent — two-phase rate increase, estimating it could raise residential bills by about $14 a month. It would come on top of a 24 percent increase in rates over the past several years.

But the company late last month said it had reached a tentative agreement on the rate case with the Attorney General’s Office and the PRC staff, which operates separately from the commission in rate cases.

On Jan. 3, a hearing examiner granted PNM’s request to extend the case by four weeks to allow additional time for the parties to continue to work on the settlement, setting a Jan. 20 deadline for filing a stipulation.

PNM said no details of the case will be available until that document is filed with the PRC.

Consumer and intervenor testimony is due Feb. 7, with a hearing set for March 23.

In its motion, the water utility authority concedes it is the prerogative of the Attorney General’s Office and the PRC staff to conduct exclusive negotiations. But it calls the exclusion “at least a disservice to the other 25 parties” and at most, “is violative of fundamental due process considerations and contrary to law.”

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