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.
Public Service Company of New Mexico (PNM), the state’s largest provider of electricity, has asked the state Supreme Court to weigh in on its effort to raise rates in the face of rising costs.
Last year the state Legislature passed a law that allows utilities to raise rates based on projected future costs instead of their actual recent costs. The law was intended to reduce the lag time between when companies costs go up and when they’re allowed to start recouping some of those costs. But PNM, the first company to try to raise rates under the new rules, is facing tough scrutiny from regulators.
PNM says that it’s paying so much more for fuel, pollution controls, pensions transmission line expansions, maintenance and improvements, that it needs to raise rates. 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.
But the Public Regulation Commission (PRC) said the company didn’t do enough to show its rising costs and demanded additional budget figures.
PRC proceeds cautiously after uproar over health insurance rates
Commissioners did not comment on PNM’s petition to the Supreme Court at a public meeting Tuesday.
“They’d like to have an expedited process,” PRC chairman David King told The Independent after the meeting. “We have to be very careful to make sure their new rate increases are justified. They’re our largest electric utility, and what we do there sets a precedent all the way down to the electric co-ops. The Commission said their earlier filing was not well documented. Now we’re trying to look through all the data, observing proper due diligence and due process.”
The new state law 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.
King’s office has received approximately 300 consumer complaints about the proposed rate increase, King said.
“There’s getting to be as much concern as there is on Blue Cross Blue Shield,” he said. “We had more complaints for Blue Cross, but it’s getting up there. Frankly, the public’s not sold on it, and we’re in a different climate than before.”
New law will be tested by PNM’s challenge
PNM has already raised electric rates on some customers by 24 percent over three years. The new rate hikes would raise electric bills on 500,000 New Mexicans by another 20 percent, on average.
But the company says the Commission’s decision wasn’t fair.
“We think it is a violation of the state Constitution and the Public Utility Act because it changes the rules of a case that is pending without going through a rule making,” PNM spokeswoman Susan Sponar said Tuesday.
Involving the Supreme Court is necessary to protect PNM’s right to use the new “future test period” rate setting approach, PNM Resources CEO Pat Callawn said.
“While we understand that this step is extraordinary, we strongly believe that we are paving a new road with this rate case in (sic) establishing proper precedent is crucial,” Callawn said in a second-quarter earnings conference call with investors.
Although PNM has asked the Supreme Court to vacate the PRC’s determination that the rate filing was incomplete, the utility has complied with the PRC’s order, Callawn said.
More than 1,300 pages of documents were provided, Sponar said Wednesday.
“With the filing of our supplemental documents, we await the Commission’s next move,” Callawn said.
The PRC has set a procedural hearing on the rate case for August 24 — one day before a scheduled public hearing on a controversial Blue Cross Blue Shield New Mexico health insurance rate increase case. The Supreme Court denied a Blue Cross Blue Shield petition July 28 to reverse the PRC Division of Insurance’s decision to reopen a controversial health insurance rate increase case.
The petition to the Supreme Court and additional budget submissions to the PRC are available on the PNM Resources website.
