SANTA FE, N.M. — Santa Fe residents may well start paying higher electric bills before the end of summer.
The City Council’s Public Works Committee on Tuesday approved an ordinance granting PNM a franchise fee at a rate of 3% of the gross receipts the company receives from the sale of electricity within the city limits, up from 2% in previous years. The franchise fee companies pay for the right to do business within a jurisdiction is typically passed on to customers.
According to a fiscal impact report, PNM customers could expect to pay three cents more for every dollar charged. So someone paying a $50 electric bill could expect to pay $51.50 for using the same amount of electricity after the agreement goes into effect.
The proposal passed by a 3-1 vote, with Councilor Mike Harris casting the lone vote against, saying he’d rather move it forward without a recommendation.
Members of the committee discussed possible amendments to the ordinance. The only one included in council JoAnne Vigil Coppler’s motion to approve the ordinance was to remove the word “plant” and a comma from a sentence that said PNM had the right to “construct, install, remove, change, expand, alter, improve, operate and maintain electric plant, transmission and distribution system and facilities.” She wanted to make sure PNM wouldn’t be permitted to build an electric plant, as the agreement with PNM allows it “the right to use any public highway, street, alley, road or other public place” within city boundaries.
Councilors also asked about adding language to the agreement about assuring PNM’s infrastructure was in good working order, getting assistance from the company to convert city streetlights to LED lighting, and liability insurance.
Assistant City Attorney Marcos Martinez said any changes would have to be approved by PNM, possibly delaying the implementation of the agreement which the city hoped to have approved before the beginning of the fiscal year on July 1. The committee ultimately decided changes could still be made when the ordinance comes before the Finance and Public Utilities committees next week and before a public hearing and possible decision by the City Council on June 26.
The agreement between the city and PNM would go into effect 30 days after the City Council approves the ordinance and would be good for 15 years.
The fee increase, first signaled during the city’s budget hearings, is expected to increase city revenue from the franchise fee by $802,000 during the upcoming fiscal year and by another $34,000 the year after that. But, as a PNM customer, the city can also expect to pay between $36,000 and $60,000 more for its use of electricity.
Also at Tuesday’s meeting, the committee voted down a proposed amendment to the city’s procurement code intended to increase transparency. The amendment would have allowed public disclosure of competitive bids prior to the City Council awarding contracts.