PRC rejects PNM rate-hike request

Posted: Wednesday, May 13, 2015 5:00 pm | Updated: 10:54 pm, Wed May 13, 2015.

State regulators on Wednesday unanimously rejected Public Service Company of New Mexico’s proposed increase in residential electric rates, meaning there will be no hike in customers' power bills in the immediate future.

PNM had wanted higher rates to go into effect by January. The plan also would have allowed the company to charge more for new solar customers to connect to the power grid.

The Public Regulation Commission upheld a hearing examiner’s recommendation to reject the rate increase because the investor-owned utility’s application was incomplete. The commission instructed the company to file a new application for a rate increase by Sept. 1, which would set the hearing process back by months.

PNM’s proposal would have cost households another $7.80 a month in the base charge, plus 16.34 percent more in monthly charges. Also, new solar customers would have faced fees ranging from $21 to $26 to connect to the grid. Businesses, schools and other nonresidential customers would not have seen a rate increase under the proposal, which would have meant another $107 million a year in revenue for the state’s largest electric utility.

“PNM failed to adequately explain the estimated impact,” Commissioner Valerie Espinoza, D-Santa Fe, said after the hearing. “I was most concerned about the impact to the consumer.”

Commissioner Patrick Lyons, R-Clovis, agreed that the company’s application was incomplete. “I think we needed to see more charts, more graphs,” he said.

In a written statement after the 5-0 vote, PNM spokeswoman Jodi McGinnis Porter criticized the commission’s decision and its process. “We’re deeply disappointed in the decision and disagree with the hearing examiner and the Commission,” the statement said. “In fact, the decision disregards the Commission’s own precedent, which found a similar filing met the standards of a future test-year case. The Commission’s rules regarding whether a rate filing is complete should not be inconsistent.”

But New Energy Economy, an environmentalist group that intervened in the rate case, said the commission had deferred a ruling on the test period that McGinnis Porter mentioned.

Mariel Nanasi, executive director of New Energy Economy, hailed the commission’s decision as “a big win for ratepayers.”

“PNM is required under the law to file a complete case — one that provides a transparent basis for its figures to legitimize its rate hikes,” Nanasi said in a statement. “PNM’s failure to comply with the law prejudices the public because PNM did not fully describe, justify or support their rate application with adequate documentation. Ratepayers deserve transparency from PNM, and PRC’s unanimous vote holds PNM accountable.”

Nanasi said the plan would have cost ratepayers $8 million a month.

Santa Fe Mayor Javier Gonzales — whose administration has been discussing the possible creation of a municipal electric utility — issued a statement Wednesday saying, “PNM’s plan would have moved us in the wrong direction, hitting small businesses and families harder than anyone else and committing New Mexicans to a lifetime of coal-burning power,” he said. “We have to start facing the realities of climate change.”

PNM could appeal the commission’s decision to the state Supreme Court, or file a new application. “We are reviewing our options, including an appeal, and will act, as always, in the best interests of our customers,” McGinnis Porter said.

Lyons, though, said PNM probably recognized deficiencies in its submission. “Anyone can appeal any decision,” he said. “But I think they kind of knew their application wasn’t complete.”

The company’s proposal for higher rates generated public opposition, including a demonstration outside PNM’s shareholders’ meeting this week in Albuquerque. Opponents of the rate increase said it was a slap at residential customers because PNM approved large bonuses and pay raises for its top five executives.

PNM filed the rate increase request in December 2014. The company said the higher rates are necessary to recover the costs of investments in federally mandated pollution controls at the coal-fired San Juan Generating Station, new solar-power generating stations and other expenses, as well as to compensate for reductions in power consumption caused by energy conservation and other factors.

Wednesday’s decision does not affect a separate PNM case before the commission. The company is closing two coal-burning units at the San Juan facility near Farmington in 2017 but wants to continue burning coal in the remaining units. PNM also wants to invest in the Palo Verde Nuclear Generating Station in Arizona and to build a new natural gas-fired plant and more solar farms.

However, a hearing examiner for the commission in April recommended the commission reject the San Juan plan. A decision by the PRC could come as early as this month.

Contact Steve Terrell at Read his political blog at

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