Showdown at the PRC: Consumers win as PNM’s rate increase is slashed

By J. Daniel

By any standard, it was a stunning upset. PNM lost yesterday and New Mexico consumers won.

As the state’s largest electric utility, Public Service Company of New Mexico (PNM) had grown accustomed to having its way with the 5-member elected body charged with regulating it — the Public Regulation Commission. After two straight years of getting its rate increase requests granted, this year PNM and its army of lawyers and lobbyists decided to go for a three-peat in 2011 — initially asking for a whopping $165 million rate hike.

After months of hearings, including closed-door negotiations from which consumer advocates were excluded, that figure got bumped down to a base rate of $85 million. However, a number of  consumer charges were tacked on in addition to the base rate — masked as extra “riders” to the so-called “stipulated agreement.”

So with customary sign-off by the lawyers from the Attorney General’s office, it looked like smooth sailing for PNM’s third straight rate hike. Soon it would be sending out bills to its residential customers with a hefty new increase tacked on.

But Thursday was decision day, and despite all the behind the scenes machinations of the lawyers, PNM ran into a brick wall of unprecedented customer resistance leading up to the PRC hearing in Santa Fe.

“We received hundreds of calls,” was the refrain voiced by at least two of the Commissioners as they prepared to cast their deciding votes.

And then in quick succession, the PRC rejected three motions favored by PNM (one even failing for lack of a second on a motion by Patrick Lyons). It then voted 3 to 2 and passed a framework put together by Commissioner Jason Marks that granted PNM a $72 million rate increase.

Marks explained it this way:

“It’s important that the company only gets what’s fair for PNM and its customers… We can’t afford to give the company the benefit of the doubt. We’ve got to sharpen our pencils. We’ve got to make sure we’re not asking a ratepayer to pay a dollar more than the law requires.”

As a regulated utility monopoly, PNM has a statutory right from the our legislature to make a profit.  The Commission must adhere to that law.  The true question before the Commission was how much exactly to award.

A press release issued by Prosperity Works, a nonprofit consumer advocacy group, lauded the PRC’s decision:

“Today the Public Regulation Commission was presented with four options to address PNM’s rate increase request. While all four options included rate increases, the one that passed today will have the smallest impact on consumers,” said Carmela Starce, lead council for Prosperity Works.  “We wish to thank Commissioners (Jason) Marks, (Jerome) Block and (Theresa Becenti) Aguilar for their vote on behalf of New Mexico’s consumers.”

Starce pointed out, “Let me be clear, one of the commissioners who voted against the Marks plan did so – not because he was against a rate increase but because he favored the plan that would have cost New Mexicans the most money and put it right into PNM’s pocket.  Today, three commissioners did the best they could with what was before them.  They should be applauded for working on behalf of New Mexicans to make sure that PNM didn’t get a penny more that it could justify.”

Starce estimated that the PRC’s action today will save consumers at least $60 million over the next five years.

PNM has ten days in which to appeal the decision.

More Clearly NM coverage of the PNM rate hike fight here.

(Many thanks to Charlotte Chinana, who contributed to this report.)

PNM Settlement on Rate Hike Rejected

By Tracy Dingmann

The New Mexico Public Regulation Commission has refused to accept a utility rate hike settlement proposed by PNM that some groups called secretive and unfair.

The PRC acted Feb. 17 to reject the settlement, which would have allowed PNM to raise rates by almost eleven percent.

That settlement had been strongly opposed by New Energy Economy and other parties on various grounds including legality, due process and adequate public notice.

In its action yesterday, the PRC said it would only consider an uncontested settlement or stipulation when considering a future rate hike.

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Down Low Dealings at PNM Regarding Rate Hikes

By Tracy Dingmann

Six local watchdog groups have filed statements in opposition to PNM’s plan to raise rates for electric service in New Mexico, saying the company negotiated the rate hikes in secret and without input from customers and other parties opposed to the rate hike.

The state’s largest electric utility had announced recently that it would seek a rate hike of as much as 25 percent on residential customers.

Subsequently, executives from PNM, along with members of the Public Regulation Commission and staffers from the office of the New Mexico Attorney General carried out negotiations regarding the rate hike and came up with a figure that appeared much lower.

Now representatives from six citizen’s advocacy groups say the groups negotiated the hike behind closed doors and did not take input from the people who will most be affected – the customers. The groups also say the negotiated agreement contains measures that will make it very easy for PNM to charge customers more again in a few short years.

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