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.
The state Public Regulation Commission (PRC) declared the Public Service Company of New Mexico (PNM)’s electric rate hike filing to be incomplete last week, delaying approval at least until June 30, 2011.
The commission’s approval or disapproval of the proposed rate hike will now not be required until June 30, 2011. But there could be additional delays if utility fails to satisfy commissioners that the amended filing is complete.
“The commission now has a month more to consider the filing,” PRC commissioner Jason Marks said. “The clock’s reset and any potential rate increase will be delayed by a month. It’s a message to PNM. When everybody’s struggling, is not the time to give PNM the benefit of the doubt.”
PNM had proposed a two-step rate hike, with increases beginning in April 2011 and January 2012, totaling a 20 percent increase for southern New Mexicans and a 22 percent increase in the northern parts of the state. The utility, which serves nearly 500,000 New Mexicans, had already raised electric rates on some customers by 24 percent over three years.
Utility rate cases have traditionally been based on utilities’ actual recent expenses, but this created “regulatory lags,” companies had complained: approved rates were not based on current costs.
The state Legislature passed a law last year, SB 477, that eases utilities’ use of a projected “future test year” to estimate future costs. SB 477 defines a future test year as the 12-month period starting the date a new rate is proposed to take effect. The law also allows the future costs of construction projects to be included in rate hike requests, to reduce the regulatory lag in utilities’ recouping of those costs.
PNM’s current rate case is the first one filed under the new law.
PRC staff and Attorney General Gary King’s office argued that PNM did not disclose exactly how it calculated estimated future costs for 2011.
“You couldn’t understand from the filing how they arrived at their numbers,” Marks said.
PNM was quick to disagree, but a company spokeswoman said the company will disclose the budget figures the commission requested.
“We believe the original filing was complete,” PNM spokeswoman Susan Sponar said. “Of course, we are complying with the order and are in the process of providing the budget information they requested.”
In addition to declaring PNM’s rate filing incomplete, the commission’s order gives the utility’s critics an opportunity to review the next filing to determine whether it adequately details the basis of cost projections.
That could lead to additional delays in the Commission’s approval of the rate hike.
“If they convince us it’s inadequate, the clock won’t start” on approval of the rate hike, Marks noted. But if PNM uses a different method, adjusting actual historic costs in its amended filing, the commission will be “presumptively acceptable,” Marks said.
“We’ve created a safe harbor,” he said. “We’ve provided a path to resolution.”
PRC Commissioner Sandy Jones favors a shorter deadline for the Commission’s final decision once a final application is submitted, arguing that a shorter deadline will force the parties to take mediation efforts more seriously.
