Posted: Thursday, May 19, 2016 7:00 pm | Updated: 12:10 pm, Fri May 20, 2016.
ALBUQUERQUE — Discrepancies over the value of electricity purchased from a nuclear-fired power plant in Arizona has interrupted proceedings related to a request by New Mexico’s largest electric utility to raise rates for more than a half-million customers.
A hearing officer has extended the schedule in the Public Service Company of New Mexico case so more evidence related to the Palo Verde plant can be submitted.
The move was spurred by what the officer described as “significant unanswered discrepancies” that arose after the utility recalculated the net book value of power purchased from one of the units at the Arizona plant.
PNM valued the power at just over $83 million, nearly $20 million less than what utility officials had testified to during a hearing last month, according to an order issued by the hearing officer Wednesday.
Environmentalists, who have been raising questions about the costs, said the overvaluation could have amounted to a $100 million burden for ratepayers over the life of the plant.
Mariel Nanasi, a frequent critic of the utility and executive director of Santa Fe-based New Energy Economy, accused PNM of misleading the state Public Regulation Commission about the actual cost of the Palo Verde power.
“PNM improperly inflated the cost because they were hoping that if the PRC didn’t catch them they would make more profit at the expense of ratepayers,” she said.
Top PNM officials argued that questions regarding the nuclear power have been addressed in past filings with state regulators and that the purchase was made at fair market value to secure a continued source of electricity for customers.
In order for the Public Regulation Commission to consider any of the new information as it weighs the utility’s rate request, the hearing officer said the record must be reopened so the new evidence can be presented.
Groups that have intervened in the rate case — including the state Attorney General’s Office, a water utility that serves New Mexico’s largest metropolitan area, industry advocates and environmentalists — will have an opportunity to review any new evidence.
The hearing officer’s order established a schedule for briefs to be filed. A public hearing also will be held in late June.
Pat Vincent-Collawn, president and chief executive of PNM Resources, the utility’s holding company, said she was disappointed with this week’s order. She said the fight over past regulatory actions related to Palo Verde won’t ultimately change the amount of the rate request and has only resulted in further delay.
PNM contends extending the schedule means the earliest new rates could take effect, if approved, would be September.
PNM first asked for an increase of more than $123 million in the revenue it generates each year through rates in August 2015. That revenue goes toward operating costs and investments in the utility’s infrastructure as well as profits for shareholders.