PNM rate increase comes closer to fruition

A long-discussed rate increase for customers of New Mexico’s largest electric utility moved closer to reality Friday when Public Service Company of New Mexico and government agencies, businesses and environmental groups involved in a compromise deal formally agreed to a plan approved earlier this week by the state Public Regulation Commission.

PNM customers would see an average rate increase of an estimated 1.4 percent phased in over two years, a company spokesman said. That’s about 90 percent less than the 14 percent increase the utility originally requested in the rate case, which began last year.

However, the rate case isn’t quite out of the woods yet.

The matter likely is headed to court. Mariel Nanasi, executive director of New Energy Economy, a Santa Fe clean-energy advocacy group, has vowed to appeal the commission’s decision.

Nanasi argues that ratepayers shouldn’t have to foot the bill for PNM spending on improvements at the coal-fired Four Corners Power Plant in northwestern New Mexico.

Hearing examiners in the rate case found that $9 million in improvements at the aging plant were not prudent investments. The commission late last year agreed with that finding and again last week voted against PNM’s request to charge customers about $9 million to recoup its Four Corners expenses.

However, the utility countered with a proposal that would permit the company to recover $4.7 million, which is money PNM borrowed for the improvements. This week Commissioners Patrick Lyons, R-Cuervo, Sandy Jones, D-Williamsburg, and Linda Lovejoy, D-Crownpoint, voted to accept that request. Commissioners Valerie Espinoza and Cynthia Hall, D-Albuquerque, voted against it.

Lyons said that allowing PNM to collect the extra money would be less expensive than fighting the utility in court.

In May, following objections to PNM’s original rate increase request from environmental groups, government agencies and businesses, PNM agreed to lower its proposed rate hike to about 9 percent over two years.

But the amount of the proposed rate increase went down considerably in recent weeks after Republicans in Congress pushed through a lower corporate income tax rate.

The exact percentage of PNM’s rate hike has shifted over the past two weeks. Next week the utility is required to make a compliance filing that nails down all the numbers.

Among those that signed on to the agreement with PNM last year are New Mexico Attorney General Hector Balderas, the city of Albuquerque, the county of Bernalillo, the Albuquerque Bernalillo County Water Utility Authority and several business and environmental groups, including Wal-Mart Stores East, Sam’s East Inc., The Kroger Co., the Sierra Club, Western Resource Advocates, the Renewable Energy Industries Association and the Coalition for Clean Affordable Energy and New Mexico Industrial Energy Consumers.