News Release

March 29, 2004

Task Force Looks at Ways To Stabilize Natural Gas Bills

NEWS MEDIA CONTACT Susan Sponar Telephone: (505) 241-2768

Albuquerque: With natural gas prices expected to remain high for the foreseeable future, an interdisciplinary task force is looking at ways to mitigate high prices and stabilize customer natural gas bills for the winter of 2004-2005 and beyond.

The task force, formed by PNM with the authorization of the state Public Regulation Commission, met today for the second time. It includes PNM employees, PRC staff and representatives for New Mexico Attorney General Patricia Madrid, U.S. Sen. Pete Domenici, U.S. Sen. Jeff Bingaman, Gov. Bill Richardson and the Coalition for Clean, Affordable Energy. PRC Commissioners Herb Hughes and David King also attended today's meeting; a representative for Commissioner E. Shirley Baca was present as well.

The task force is an interactive, collaborative forum challenged by the PRC to come up with ways to mitigate high prices and stabilize customer natural gas bills next winter and in subsequent winters. Among the preliminary ideas discussed today were:

• An expanded levelized bill program, in which PNM customers would pay a set amount per month, with an annual "true-up" to reconcile actual versus expected natural gas costs and consumption;
• A new process that would keep the customer cost of natural gas fixed for three months at a time (currently, that cost can change from one month to the next); and
• Increasing energy efficiency and weatherization education.

The task force will consider other ideas as well during the next two months.

"There is no silver bullet to reduce natural gas costs or stabilize customer bills," said Joanne Reuter, PNM vice president of regulatory affairs. "However, there may be a combination of things we can do that could make a difference for our customers — both from an administrative perspective and from a customer-program perspective.

"The diversity of views on the task force will certainly give us insight into what is doable and affordable and what is not," Reuter said.

The task force will likely finish its work this spring and submit a report to the PRC this summer. At that time, PNM will also request PRC approval for any proposals that would require changes to PRC rules or regulations.