ALBUQUERQUE, N.M. — New Mexico Gas Co. has filed an application with state regulators to recover costs associated with dramatic spikes in natural gas prices that were prompted by a deep freeze earlier this year, utility officials announced.
The proposal calls for spreading the recovery of the costs through December 2023 in order to minimize the effects on customers’ monthly bills. If the state Public Regulation Commission approves, customers could see their bills increase by an average of about $5.70 per month, or roughly 10%.
Even by spreading out the costs over a longer period of time, utility officials acknowledged that it will be tough for some customers to absorb the astronomical price increases that upended the natural gas market in February.
“We’re going to try to work with our customers to make this as easy on them as possible. We understand that’s going to be a significant increase in their bills for this period of time. We will work with them,” said Tom Domme, New Mexico Gas Co.’s vice president for external affairs.
New Mexico Gas Co. was not alone. Utilities across the region were forced to pay higher prices.
As regulated utilities, they pass the cost of fuel onto customers without markup, meaning the prices paid in February would eventually show up in customers’ bills.
Nationally, the Federal Energy Regulatory Commission and the North American Electric Reliability Corp. announced early on that they would be looking into utility and transmission operations during the cold snap. Some members of Congress separately called for federal investigations into possible price gouging as natural gas spot prices spiked and millions of homes and businesses dealt with power outages.
In New Mexico, the attorney general’s office opened its own inquiry. Spokesman Matt Baca said the matter is still under review.
Executives with El Paso Electric, Xcel Energy and Public Service Co. of New Mexico testified before state lawmakers earlier this year about how they tried to prepare but were still forced to buy some natural gas on the spot market.
With Xcel buying roughly half of its natural gas off the spot market, the company said at the time that preliminary estimates put the total cost for New Mexico and Texas customers at about $2 million. Profits from sales to other providers in the Southwest Power Pool were expected to help offset that, but customers could still see their monthly bills increase by about $7 over a two-year period.
In the case of New Mexico Gas Co., Domme said the extraordinary costs for the week of Feb. 13-18 totaled about $110 million.
Customers who use more gas will see a bigger increase in their month bills than those who do not, Domme said.
New Mexico Gas Co. has created a $1.2 million fund with shareholder money to help low-income customers and small business owners who have fallen behind on their bills due to the economic consequences of the pandemic. Residential customers can also apply for help through a separate program in which qualified customers receive one-time payments toward their bill.
Domme said the utility is opening its payment centers to work with customers on payment plans.
New Mexico Gas Co. serves about 530,000 customers throughout the state.