PRC to rule next week on disputed PNM rate case

Hearing examiner challenged proposal

The New Mexico Public Regulation Commission has announced it will rule next week on a rate increase for more than 500,000 customers of the state’s largest utility, Public Service Company of New Mexico.

The rate case has been continuing for two years and is one of the most contentious in recent memory.

PNM is requesting an increase of $123.5 million in annual revenue, under which customers on average would see their bills rise by 14.4 percent. A PRC hearing examiner’s Aug. 4 recommendation slashed that by two-thirds to $41.3 million, which would mean an average increase of 6.4 percent for customers.

At a public meeting Wednesday, commissioners discussed whether it would be possible to make determinations on all of the issues in question over the course of a single public meeting. Commissioner Sandy Jones suggested the decisionmaking process be broken up into two separate meetings.

“I know that I have a lot of questions, and that could take up to two hours,” Jones said.

Commissioners Valerie Espinoza, Pat Lyons and Lynda Lovejoy pushed back, saying it was unfair to the public to drag the process out over multiple days.

“I’ve buried myself in this case so I can understand what I’m going to vote on,” said Lovejoy. “I’m not going to take up two hours of questions. We can’t afford to go another day beyond Wednesday.”

Under state law, the commission has until the end of the month to make its ruling. The commissioners eventually agreed to vote on a final order in the case next Wednesday, Sep. 28, beginning at 9 a.m.

Much of the controversy in the case stems from hearing examiner Carolyn Glick’s decision to exclude several transactions from the calculation that determines how much PNM can charge customers. In her recommended decision, Glick said PNM acted “imprudently” by failing to sufficiently weigh other options when it purchased 64.1 megawatts of nuclear power from the Palo Verde Nuclear Generating Station for $163.5 million, extended several leases at Palo Verde for $19.5 million per year and installed $52.3 million worth of air pollution controls at San Juan Generating Station that some called excessive. PNM maintains that the investments Glick excluded from the rate calculation were prudent and appropriately analyzed.

PRC staff attorney Michael S. Smith adopted many of Glick’s recommendations in a proposed order that was presented Wednesday during the meeting. The proposed order is what the commission will vote on next week in order to create their ruling in the rate case. The proposed order did not address the Palo Verde or San Juan issues, which will be discussed at the next public meeting.

Smith said he will prepare several versions of the proposed order to make it possible for the commission to make their ruling in a single day.