Groups ask New Mexico regulators to reject utility's request to raise rates

Energy Associated Press

A proposal by New Mexico's largest electric provider to raise its rates is running into opposition.

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The water utility that serves Albuquerque and parts of Bernalillo County, and an environmental group have accused Public Service Co. of New Mexico of failing to provide state regulators with enough information to justify a proposed 12 percent rate increase.

The groups, in recent filings with the state Public Regulation Commission, said PNM's application is incomplete and offers no explanation for some of the expenses the utility expects in future years. They say the lack of information violates commission rules.

Mariel Nanasi, executive director of New Energy Economy, an environmental group critical of the utility, said the rules are put in place to protect ratepayers while balancing the need of the utility.

"The linchpin of a rate request is the itemized justification behind the numerical values asserted by the utility. If the substantiation is missing, the assertion fails," New Energy Economy stated in its filing.

The Albuquerque water authority contends that PNM's incomplete application goes beyond a mere ministerial error and that the utility's recent proposal to limit discovery in the rate case "only adds insult to injury."

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PNM said Tuesday it believes its application was complete and supported with detailed information. It's planning a formal response later this week.

"It is not unusual for PNM to respond to numerous additional information requests throughout the course of a case like this that affects our customers' bills," spokeswoman Susan Sponar told The Associated Press.

PNM is asking regulators to approve a rate increase to help cover the costs of new solar-power generating stations, federally mandated pollution controls at the coal-fired San Juan Generating Station and other infrastructure.

The increase would generate more than $107 million in revenue, which would help the utility as it works to recover $585 million in investments that have been made since July 2010 or will be made through 2016.

Aside from the investments in new solar, a new natural gas plant, transmission and the planned purchase of assets related to the Palo Verde nuclear power plant in Arizona, the utility has said the increase would help cover declines in demand that have resulted from energy conservation efforts and the sluggish economy.

PNM's residential customers could see their monthly bills jump by $9.75 starting in January 2016 if regulators approve the request.

PNM has also proposed changes to its rooftop solar program, sparking opposition from renewable energy advocates.

For large customers, such as manufacturers or data centers, PNM is proposing a five-year discount to qualifying companies as a way to continue encouraging economic development in the state.

The recent filings raise questions about tens of millions of dollars in increased costs for steam generation, a new coal contract for the Four Corners Power Plant and a lease agreement involving the Palo Verde plant.

The critics want regulators to force PNM to refile its rate request.