State Representative, District 53
Nate COTE
Rate hike causes concern
State Rep. Nate Cote, county officials suggest people call PRC to voice opposion to PNM cost increase
Alamogordo Daily News
By Laura London, Staff Writer
Posted: 05/09/2010
At the county town hall meeting in Boles Acres Wednesday, state Rep. Nate Cote and Otero County Commissioner Doug Moore heard many concerns from citizens, not the least of which was Public Service Company of New Mexico's possible rate hike for customers in southern New Mexico.
During an Alamogordo City Commission meeting April 13, Ronald Darnell, vice president of regulatory affairs at PNM, said the possible rate hike for southern New Mexico customers goes back to 2005 when PNM bought Texas New Mexico Power. He said part of the agreement at the time was to drop rates 15 percent for TNMP customers and then freeze the rates until January 2011.
Darnell said another part of that stipulation is that southern New Mexico is assumed to be served through gas generation, while customers in the north have had power generated by coal and nuclear plants since the 1970s.
"The problem was that since the customers in the north have already paid for the high cost of installing the systems, it would be a little unfair to the north if the south were merged at the time and the north had to absorb some of the cost of the natural gas," Darnell said.
Darnell said when PNM first looked at the situation in 2008 when gas prices were high, a rate increase would have been close to 70 percent for southern New Mexico customers had PNM filed for such an increase. If they were to file today, Darnell said the rates for northern and southern customers would be similar, but the problem is the price risk in the future is for southern customers since gas prices fluctuate.
Darnell also talked to the city commission about an increase of electric rates statewide. He said he didn't know the percentage of that increase, "but it's going to be large, it's going to be significant." He said the increase is necessary to cover the $265 million PNM plans to invest in solar energy, as well as about $30 million per year in lost load the company has experienced since the economy has been in recession.
Stephanie DuBois, who is running for the Public Regulation Commission District 2, told Cote on Wednesday it was not customers' decision for PNM to buy TNMP. She said she wasn't there to argue the rate increase, but since everyone affected is south of Interstate 40, she asked Cote to request that the PRC hold the hearing for the rate increase in the southern part of the state.
"I don't think anyone in Santa Fe is going to pay our electric bill," DuBois said.
DuBois said when she lived in Deming, the ambulance service wanted to raise their rates. She asked at that time the hearing be held in Deming since "nobody in Santa Fe was going to ride our ambulance." She said they did move the hearing to Deming so locals could participate. She said the PNM hearing should also be held locally.
"It doesn't have to be in Alamogordo, but just some place southern," DuBois said.
Cote agreed the PRC should have the hearing concerning TNMP customers in southern New Mexico where those customers live.
According to Mike Espiritu, director of the Otero County Economic Development Council and the Alamogordo Chamber of Commerce, the increase would affect Alamogordo, Tularosa, Ruidoso, Silver City and Lordsburg.
Some people at the town hall meeting were under the impression that the public hearing about an increase in rates for former TNMP customers is coming up May 17. During a telephone interview Friday, Sandy Jones, PRC District 5 commissioner, explained that is not the case. He said any public hearing concerning the TNMP rates would not be for a couple of months. He said there is a proposed stipulation that not all parties have signed onto yet, and the PRC will docket a case on it soon.
Jones said the May 17 public hearing, at 9:30 a.m. at the PRC's offices in the PERA building at 1120 Paseo de Peralta in Santa Fe, is part of a yearly process. Every year, each utility company has to file a renewable energy plan with the PRC. Jones said it will affect rates in some way statewide, not just for southern New Mexico but by law it won't increase rates by more than 2 percent.
Roy Stephenson, director of the PRC's Utility Division, said Friday the PRC plans to hold public hearings in southern New Mexico, as well as Santa Fe, when the time comes for the rate case for former TNMP customers. He was not certain when those would take place, but said it would likely be in December.
At the town hall meeting, Cote said when he heard about the increase for PNM southern customers, he called PNM and asked them what was going on.
"They told me, well, it was the price of natural gas," Cote said. "Natural gas hasn't gone up, it's gone down."
Cote said he's not sure what's going on, but it's a PRC issue and people should e-mail the PRC with their concerns.
Moore said Alamogordo is fortunate in that it is cut in half as far as PRC districts, split between District 2 and District 5, so Alamogordo has two representatives on the PRC.
"Those folks are elected by the citizens, and you have direct access to them," Moore said. "And I would certainly recommend everyone voice their opinion."
Cote said he's very concerned about the issue because people can't afford an increase in electric rates.
"Your wages haven't gone up," Cote said. "And if you're a small business owner and you have a higher utility cost ... that's going to hurt businesses, that's going to detract from economic development, for bringing business into the area. That's something we do need to stay on top of, but it's a PRC issue. And you do have straight access to them, absolutely."
DuBois said if PNM made a bad decision in buying TNMP, they shouldn't take it out on TNMP customers.
"They made poor investments and now they want to get a return on it. That's not our fault," DuBois said. "You know, they went out on a limb and bought the company. Tough nuts, is what I say."
During an interview April 16, Espiritu said he doesn't know how much the rate increase could be for southern New Mexico PNM customers. He said the lowest number he's heard is 25 percent, which would be devastating to individual customers and the southern New Mexico economy in general. Espiritu said he has heard 25 percent as well for the statewide increase Darnell was talking about during the city commission meeting.
Contact Laura London, at llondon@alamogordonews.com.
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