AG looking into utility costs during freeze
Firms forced to buy some natural gas on spot market
The New Mexico Attorney General’s Office has opened an inquiry into utility costs during a recent winter blast that plunged New Mexico and other states into a deep freeze and upended the natural gas market.
Attorney General Hector Balderas said the weather emergency that spanned Texas and parts of New Mexico caused tremendous damage and he wants to ensure customers won’t be further harmed by skyrocketing bills.
“We understand utilities in the state had no choice but to pay. As these fuel costs flow through to customers, there is a strong likelihood that New Mexicans will receive utility bills that are hundreds of dollars higher than they were last month,” his office said in a letter to New Mexico Gas Co. and other providers that serve more rural parts of the state.
His office set a deadline of Friday for utilities to provide analyses of customer impacts and options for addressing the potential price shock. The utilities also are being asked to explain to their customers the circumstances and the steps being taken to mitigate the situation.
Utility executives testified Thursday before a panel of state lawmakers that they were able to cushion some of the blow by shifting from natural gas to fuel sources.
El Paso Electric tapped nuclear power from Arizona and fuel oil units, while Public Service Co. of New Mexico relied on the coal-fired San Juan Generating Station to meet demands.
Still, the executives acknowledged that higher natural gas prices ultimately will trickle down to customers through increases in their monthly bills. The utilities will have to seek regulatory approval to recover the costs of paying more for natural gas.
Sen. Liz Stefanics, D-Cerrillos, chair of the Senate Conservation Committee, said Thursday that some of her constituents have seen their monthly bills this winter increase by as much as 800%.
She said a federally-funded program to help low-income people with their energy bills won’t go far enough because the assistance amounts to only a couple hundred dollars for the season.
“If we start talking about low-income and moderate-income individuals being saddled with a bill they cannot pay, we don’t have any protections here,” she said. “This is a shortcoming in our statutes.”
Nationally, the Federal Energy Regulatory Commission and the North American Electric Reliability Corp. already have announced that they would be looking into utility and transmission operations during the cold weather.
Executives with El Paso Electric, Xcel Energy and PNM told New Mexico lawmakers that they tried to prepare but were still forced to buy some natural gas on the spot market.
With Xcel buying roughly half of its natural gas off the spot market, the company said preliminary estimates put the total cost for New Mexico and Texas customers at about $2 million. Profits from sales to other providers in the Southwest Power Pool will help offset that, but customers could still see their monthly bills increase by about $7 over a two-year period.