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Thursday, April 17, 2008

PNM Hike Could Boost H2O Bills

By Sean Olson
Copyright © 2008 Albuquerque Journal; Journal Staff Writer
    PNM's request to charge ratepayers an extra $72 million in emergency fuel costs could be a double whammy for many consumers— once on electric bills and again when they pay for water.
    Executive Director Mark Sanchez of the Albuquerque-Bernalillo County Water Authority said Wednesday that PNM's request would add 56 percent to the water authority's power bill next year— an extra $3.3 million.
    "It will be very, very difficult for us to absorb that," Sanchez said.
    Water board Chairwoman Deanna Archuleta said the probable solution would be to raise rates.
    "We will most likely have to carry this crossover to our ratepayers," she said.
    PNM is requesting the $72 million, on top of a basic rate increase also pending before the Public Regulation Commission.
    Company officials have said their credit rating could be lowered to junk bond status without the emergency clause, and the attorney general supports the request.
    A PRC hearing officer recently recommended against giving PNM a fuel clause and said its requested rate increase should be substantially reduced.
    PNM returned to the commission with a request for a modified emergency clause that would add about $5 a month to the average residential user's electric bill.
    "Generally speaking, the fact is that all over the country electric rates are going up because the cost of producing and delivery electricity is rising dramatically. PNM rates have not increased in more than 20 years. Even if our new rates as originally proposed are approved, customers will still be paying at or below national and regional averages," PNM spokesman Jeff Buell said.
    The water authority's proposed budget for the coming fiscal year was introduced Wednesday night at the water board meeting. It contains no rate increases.
    "We've been able to control our costs ... but we're dependent on a (power) provider, and we can't control their costs," Archuleta said.
    Sanchez said the water authority is already absorbing a 3.5 percent increase in the cost of labor and materials in the new budget without raising rates.
    A $3.3 million increase in the authority's electric bill, he said, would translate into an increase in water rates of about 3 percent if it was passed along.
    "I think it's unfair for our customers to get hit twice," Sanchez said.
    Archuleta said any rate increase the water board considered would only be enough to cover excess power charges.
    Water authority attorney Nann Winter said Wednesday that if PNM stuck to a basic rate increase— which spreads charges more evenly among ratepayers— the increase to the water authority's bill would be 10 percent to 12 percent.
    Sanchez said the water authority could live with that increase without raising rates.
    The water authority and the New Mexico Industrial Water Users group are interveners in the rate case and have asked for more time to gather information on the emergency fuel clause.
    Winter said they are in settlement negotiations with PNM, which could resolve some issues.