PRC to hold new hearing on rate hike

The state Public Regulation Commission on Wednesday backed away from its earlier vote against allowing New Mexico’s largest electric utility to make customers pick up the tab for tens of millions of dollars the company is spending to upgrade coal-fired power plants in Northwestern New Mexico.

The commission rescinded the decision it made two weeks ago, voting unanimously to hold a new hearing next Wednesday on Public Service Company of New Mexico rate proposals.

“I think we can get a better deal for ratepayers,” said Commissioner Patrick Lyons, R-Cuervo.

Lyons had voted with a majority of the commission on Dec. 20 to allow PNM to boost rates by about 9 percent for the average consumer over the next two years, which was less than what the company wanted.

The commission at the time rejected PNM’s request to recoup the approximately $150 million cost of improvements at the Four Corners Power Plant and about $37 million in improvements at the San Juan Generating Station near Farmington.

The commission agreed with hearing officers that

allowing these expenses into the rate base would be “imprudent.”

PNM last week challenged that decision, asking for a new hearing and reiterating its request to charge customers for the power plant improvements.

Also requesting a new hearing were several organizations and agencies that had signed on to a stipulated agreement with PNM in support of the rate increase.

These include the New Mexico Industrial Energy Consumers, the state Attorney General’s Office, the city of Albuquerque, the County of Bernalillo and the Bernalillo County Water Utility Authority.

All had intervened in the rate case.

In a separate motion these entities said they were afraid the rate case would end up in court, a scenario, they said, that could result in an even larger rate increase. They argued that the commission could decide issues surrounding the Four Corners plant expenses in a separate case that could be filed later.

Commissioner Valerie Espinoza, D-Santa Fe, told The New Mexican after Wednesday’s vote, “In light of the issues raised by the parties in their motions for rehearing, I felt it would be reasonable and fair to listen to their oral arguments.” Espinoza was another one of the four commissioners who had supported the Dec. 20 action.

Espinoza said it’s possible that that a new hearing could result in the commission disallowing the inclusion of even more expenses in PNM’s rate base. However, it’s far from clear that there are enough votes on the commission to do that.

Both Espinoza and Lyons said they want to impose a requirement that PNM pass along to consumers its savings from the corporate tax cuts recently passed by Congress and signed into law by President Donald Trump.

Commissioner Lynda Lovejoy, D-Crowpoint, was the only commissioner who voted last month against the commission’s denial of PNM’s plan to include the coal-plant expenditures in its rate-base.

She argued Wednesday that not allowing a rehearing could mean that PNM would be able to legally impose the 14 percent increase it requested before it had entered into the agreement with intervenersthat called for a smaller rate hike. That would make the commission look “incompetent and idiotic,” she said.

“People will go hollering to the Legislature asking why the PRC allowed such high rates,” Lovejoy said. “It’s not going to be pretty.”

Others challenged her notion that the higher rates would automatically go into effect.

Next week’s hearing is not expected to be long. Both sides will have only 20 minutes to argue their case.

New Energy Economy — a Santa Fe based clean energy advocacy group — is the only intervener opposed to PNM’s proposal.

The group’s executive director, Mariel Nanasi, who has been a PNM opponent for years, will speak against the rate hike at next week’s hearing.

PNM is considering divesting from the Four Corners and San Juan plants and ultimately ending the company’s reliance on coal in the next 13 years.

Contact Steve Terrell at 505-9863037 or sterrell@sfnewmexican.com. Read his blog at www.santafenewmexican.com/roundhouse_roundup.