PNM files modified rate plan with PRC

Changes designed to satisfy problems

Public Service Co. of New Mexico filed a new settlement agreement on Tuesday in its latest rate case at the Public Regulation Commission to satisfy problems that PRC officials had identified in the utility’s original settlement announced in early May.

The new agreement, supported by about a dozen parties in the case, eliminates problems that PRC hearing examiners had cited in a May 12 order rejecting the original settlement, said PNM spokesman Pahl Shipley.

“We believe the revised agreement answers the concerns expressed by the hearing examiners and fairly balances the interests of customers and all the parties involved,” Shipley said in an email to the Journal. “The agreement is a responsible step forward in finding common ground as we work to build a strong energy future in New Mexico.”

The original settlement, announced on May 5, had called for lowering PNM’s rate request for an additional $99.2 million in annual revenue to $62.3 million, with the increase implemented over two years in 2018 and 2019 to mitigate the impact on customers.

It also paved the way for PNM to close the coal-fired San Juan Generating Station near Farmington in 2022 and pull out of its 13 percent stake in the nearby Four Corners Power Plant by 2031 or earlier. To do that, supporting parties agreed to accept higher depreciation rates on the utility’s investments in the facilities so it could recover more money before exiting the plants.

But the hearing examiners rejected the revised depreciation rates because that was never included in PNM’s initial rate request filed last December.

They also objected to a settlement proposal to split the rate case into two phases, one to set higher rates and a second to establish a new rate structure, or “rate design,” that outlines different percentage hikes in rates for residential, commercial, industrial and institutional customers.

The revised settlement maintains the agreement to lower PNM’s rate request to $62.3 million, but it drops the two-phase proposal for the case.

PNM also agreed to drop the increase in San Juan depreciation rates and instead file a new study in its next rate case.