Albuquerque Journal: PNM Rate-Request Hearing Ends

May 2011

By Michael Hartranft

While the evidentiary hearing on Public Service Company of New Mexico’s proposed rate increase effectively wrapped up this week, state regulators aren’t likely to make a final decision before midsummer.

Some additional testimony was due to be filed Friday and intervenors will be able to question the witness on Tuesday if needed. But otherwise, the hearing was finished Wednesday.

It may be late June or early July before hearing examiner Carolyn Glick files a recommended decision, and then mid-July before the PRC, which has final say, takes action.

The hearing focused on a stipulation signed by PNM and six other parties, including the Attorney General’s Office and two large energy-user groups. It proposes a two-phase, $85 million base rate increase, which PNM contends is vital for system reliability and keeping pace with growing demand with cost-effective improvements. PNM originally sought a $165 million rate increase.

“By working with others, we came to an agreement that balances reliability with bill impact by reducing our requested increase and limiting other charges that already affect customers or will in the near future,” said Ron Darnell, vice president of regulatory affairs.

While the base rate would increase 10.8 percent, critics made much of PNM testimony elicited by consumer advocate Prosperity Works that with the addition of a proposed capital additions rider of up to $20 million and a renewable rider on top of existing surcharges, utility bills actually could jump 18 to 23 percent by 2013, even with caps on the charges proposed by PNM.

The Commercial Energy User Coalition, representing retailers, restaurants, building owners and others, disputed PNM’s cost of service estimates, contending it needs no more than a $7 million rate increase.

It opposed the proposed riders as “piecemeal” ratemaking.

Environmental group New Energy Economy challenged PNM’s business decisions to continue to invest — at ratepayer expense — in the coal-fired San Juan Generating Station near Farmington, given the uncertainty of future state and federal environmental rules.

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