I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
While environmental activists played their part yesterday during demonstrations at the capitol building, going so far as to dress up as solar panels and to sing the tune of “You Are My Sunshine,” their counterparts, the anti-cap-and-trade contingency who has…
Roughly one quarter of University of New Mexico students are unimpressed with the state’s flagship public school, according to a survey that questioned college students about their higher education experiences.
PNM headquarters in Albuquerque
The Public Service Company of New Mexico (PNM) is unlikely to receive approval for a proposed rate increase this year, Public Regulation Commission (PRC) Chairman David King told The Independent Tuesday afternoon.
The utility, which serves nearly 500,000 New Mexicans, has raised electric rates on some customers by 24 percent over three years, and filed a request last week for PRC approval of another 21.2 percent hike that would take effect in April 2011.
It is not unusual for the commission to put a nine-month “stay” on a rate hike request; during that time cases are often assigned to a mediator. Occasionally settlements may be reached during that process.
However, two commissioners said Tuesday they would not be open to accepting a rate hike settlement before next year.
“We’re not going to do anything immediate,” King said. “Our order today stays it. We’re not favorable toward a (rate increase) stipulation without public hearings. We need to go through the record very carefully.”
During the PRC meeting Tuesday, commissioners Jason Marks and Jerome Block Jr. expressed similar concerns. Commissioners Carol Sloan and Sandy Jones were not present.
A vote on the proposed rate hike will probably occur next spring, King said.
PNM anticipated that the new rates, if approved, would not go into effect before April, 2011, spokeswoman Susan Sponar told The Independent.
“What the commission did yesterday was invoke the nine-month suspension period they always invoke for rate cases for any utility, which means that the new rates can’t take effect while the commission conducts hearings to determine their reasonableness,” Sponar said.
Commissioners wary after public outcry over rushed health insurance rate hike
The Commission’s go-slow approach to a PNM rate hike contrasts with the PRC Insurance Division’s rushed effort to secure a weekend rate hike settlement with health insurer Blue Cross Blue Shield of New Mexico without a public hearing, King said.
“It’s the same kind of thing as with Blue Cross Blue Shield, frankly,” King said of the latest PNM rate increase proposal. “An expedited stipulation isn’t going to get it done. We need public hearings.”
Insurance Division approvals of Blue Cross Blue Shield rate hikes every year since 2004 were made without reviewing documentation supporting the insurer’s claimed expenses and losses, The Independent reported.
With utilities like PNM, the commission exerts closer scrutiny, King said.
“We have here what we didn’t have with Blue Cross,” King said. “The public can look at each item, can see what’s going on. You can’t do that behind closed doors.”
King, Marks and Block are angling to exert increased control over health insurance rate-setting by the Division.
PNM asked for rate hike to cover fuel costs, pensions, improvements
“They’re in a very rough situation, having trouble refinancing their debts,” King acknowledged. “It’s a dilemma. But it’s disheartening because when they came to us before, we were given assurances (that rate increase) would last three or four years.”
The PRC approved a $33 million rate hike in April 2008 to cover rising fuel costs. Another rate hike was approved in 2009, and was implemented in two partial increases, in July 2009 and April 2010, Sponar said.
This most recent proposed rate hike would cover fuel costs, pollution controls, pensions, transmission line additions and facilities maintenance and improvements, according to PNM. PNM has already spent $240 million and the total costs between 2008 and 2011 will total $575 million, Sponar said.
But King expressed skepticism about PNM’s claims, noting the company still has not documented all fuel costs and expenses.
“We need to see what’s changed so drastically from a few years ago, and the Attorney General will want to look at it very carefully,” King said. “That’s going to take some time.”
Standard and Poor’s credit rating service recently downgraded PNM Resources to the lowest credit score among U.S. utilities. The company’s credit rating is likely to be downgraded yet again without a rate increase, company officials claimed, making it more difficult to borrow money for system improvements.
The commission ordered a settlement conference on Sept. 9 to explore if any issues in the case can be settled without litigation.
This story has been updated. A previous version of this story indicated that PNM had requested an expedited approval. That was incorrect.
