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News ReleaseFeb. 26, 2002 PRC Creates New Underground Tariff
Albuquerque: The New Mexico Public Regulation Commission today approved a new tariff that links the added costs of placing power lines underground to communities that directly benefit from such projects. Under the tariff, a community requiring or requesting that power lines be placed underground must pay the added costs of such projects, which can cost from two to ten times more than overhead power lines. “This is equitable, fair and constructive public policy,” said Roger Flynn, PNM executive vice president. “The underground tariff passed today gives those communities that choose to place power lines underground a way to pay the added costs of doing so – and customers in other communities won’t be financially penalized in any way.” Two years ago, PNM asked the PRC to create an underground tariff in response to a growing number of requests by communities to place power lines underground. “These requests have inevitably raised the question of who pays: is it the community that directly benefits, or is it all of PNM’s 365,000 electric customers? The commission today answered that question,” Flynn said. Flynn said today’s PRC action helps resolve an inherent contradiction between the regulatory requirement that PNM keep costs reasonable and the desire of some communities to place certain power lines underground. Under the tariff, effective within 45 days, a city or county government that wants a power line placed underground can either pay the additional cost itself or have it paid by customers within its jurisdiction through a line-item added to their monthly bills. The additional cost would be the difference between the total underground project cost and what a typical overhead line would cost – and could be collected over a period not to exceed seven years. The tariff also allows a city or county government to have input on the costs, route and construction plan for a proposed underground power line. Typical Cost of Overhead vs. Underground Lines
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