Copyright © 2020 Albuquerque Journal
A new $60 million, 35-mile gas pipeline to run from Bernalillo to Santa Fe will provide northern New Mexico a lot more natural gas capacity and reliability when it comes online next December.
The New Mexico Gas Company began work this month on the pipeline, to be laid parallel to the current mainline that now hugs I-25 northward from Placitas to Santa Fe, said utility Vice President of Engineering Tom Bullard.
The new 20-inch line will transport a lot more gas than the current 12-inch mainline, increasing supply for northern communities while allowing the company to rely less on a second, aging 12-inch line that runs from Cuba to Los Alamos, Bullard said. That older line, built by the U.S. Department of Energy in the 1940s, is reaching the end of its useful life and is difficult to replace because it cuts through national forest area, including the Valles Caldera National Preserve.
“The new pipeline gives us options to reduce pressure in the old DOE line and downgrade it, or possibly abandon it altogether in the future,” Bullard said. “It also increases reliability and capacity in northern areas. It’s a big project for the company.”
The utility is now clearing rights of way and laying down pipe. It will employ nearly 160 people over the next six months to bring it online in time for next winter.
“We’re moving pipe from the rail yards to the right of ways now and stringing it out, but we haven’t begun welding it together yet,” Bullard said.
The project is among about $400 million in infrastructure investments either already done or planned by the utility from September 2017 through year-end 2021. The company filed a new rate case at the Public Regulation Commission last December to recover those investments, proposing to hike the access fee, or fixed charge, on customers’ bills from $11.65 to $12.70.
If approved, average residential bills would climb by about $1.71 a month, from about $40.61 now to $42.32 in January 2021.
That would generate $13.2 million in new annual revenue for the utility, which also wants to increase its allowed return on equity from 9.1% now to 10.2%.
The PRC has scheduled public hearings from Aug. 10-18. A final commission decision is expected in October, with five parties intervening in the case, said utility Vice President of Regulatory Affairs Tom Domme.
“We don’t anticipate major controversies,” Domme said. “It’s a pretty straight-forward case based on recovery of capital investments by the company.”