Dec. 11, 2014
PNM Files Rate Case to Support Electric Reliability and Cleaner Energy Sources
Albuquerque: PNM filed its first rate case since 2010 with the N.M. Public Regulation Commission today seeking to recover the cost of investments for electric reliability and a cleaner power supply for New Mexico. In addition, the rate filing proposes regulatory improvements designed to support the continued growth of successful customer energy efficiency and rooftop solar programs. PNM's request must be approved by the commission before it can take effect.
The company filed a request for an increase of $107.4 million, approximately 12 percent. However, other changes that will go into effect at the same time will lower the increase to about 7.7 percent. If the request is approved as filed, the new rates would begin on Jan. 1, 2016. The average residential customer's monthly bill would increase by $9.75. Even at the requested rate, PNM's customers would continue to pay electric bills that are below the regional and national average. This is largely due to the cost controls and cost management practices the company has put in place over the past several years.
"We take bill increases and the impact they can have on our customers very seriously and have worked hard to mitigate the need for this request," said Pat Vincent-Collawn, PNM's chairman, president and CEO. "These steps are critical for PNM to be able to maintain reliability, continue the move toward cleaner energy resources and to best serve our New Mexico customers. The regulatory improvements we are also seeking are needed to align our rate structure with the way that people use energy today, and to fairly allocate the cost of the electric system among all customers."
The increase seeks to recover $585 million in costs incurred or planned from July 1, 2010 through December 31, 2016 that are not currently included in PNM rates:
- Four new solar centers online by 2016 ($79 million) capable of powering 16,200 average homes;
- La Luz Natural Gas Plant online 2016 (MW, $56 million), to serve customers when demand is highest, to support renewable energy growth and ensure reliable power under a variety of grid conditions;
- Emission control equipment at San Juan Generating Station to comply with federal haze regulations (Selective Non-Catalytic Reduction technology reduces NOx emissions, ($81 million);
- Critical resources for the future: purchasing Rio Bravo Generating Station Natural Gas Plant ($38 million) and purchasing some of the leased assets at Palo Verde Nuclear Generating Station Unit 2 ($163 million); and
- Investments to keep our electric system reliable, including a $30 million investment at PNM's Rio Puerco Switching Station, $8 million for substation hardening to increase security, and an upgrade to our distribution system operations center.
The balance of the request is related to declining energy sales driven by the still recovering New Mexico economy, improved electric appliance efficiency, and PNM's own energy efficiency and customer rooftop solar programs.
Due to these investments, PNM will continue to provide New Mexico business and residential customers with strong reliability, while dramatically reducing the use of coal-fired generation and increasing the use of cleaner resources, including natural gas, solar and wind.
In the rate filing, PNM also proposes to more fairly align electric rates with actual costs to serve customers while still supporting energy efficiency and rooftop solar programs. The proposal supports economic growth and affordable electricity for all customers through a fair distribution of costs.
Specific regulatory improvements that, if approved, would be applied beginning on Jan. 1, 2016, include:
- A Revenue Balancing Account pilot program, also known as decoupling, designed to support recovery of fixed costs that are critical to reliability of service at the lowest cost to customers, similar to fuel adjustments that are regularly recovered;
- The proposed changes to rate structure include an economic development tariff to support state and local efforts to retain and attract companies that provide economic based jobs.
- A solar distributed generation interconnection fee, applied only to new rooftop solar customers after Jan. 1, 2016, to accurately charge customers for their use of the system.
"These regulatory improvements reflect our commitment to support robust energy efficiency, economic development, and rooftop solar programs into the future. By making sure critical infrastructure costs are fairly recovered, the integrity of the system- both in terms of reliability and fairness- is protected," added Vincent-Collawn.
With headquarters in Albuquerque, PNM is the largest electricity provider in New Mexico, serving more than 500,000 customers in dozens of communities across the state. PNM is a subsidiary of PNM Resources, an energy holding company also headquartered in Albuquerque. For more information, visit PNM.com.