The PRC’s five members voted unanimously to allow the purchase to proceed, after months of contested hearings and negotiations between TECO and local entities opposed to the transaction.
“Just after closing, we will start to implement credits to lower bills by $2 million in the first year, and up to $4 million starting in the second year,” TECO President and CEO John Ramil told the Journal. “That will continue until we file our first rate case in 2018.”
Beyond that direct, the transfer of ownership should be “pretty seamless” for customers, he said.
Under state regulations, the deal can’t officially close until a 30-day time period expires for opponents to request a re-hearing. But with all intervening parties supporting the final agreement, TECO expects to complete the transaction by mid to late September, Ramil said.
TECO, a publicly traded holding company that operates two electric and natural gas utilities in Florida, originally offered to buy New Mexico Gas in May 2013. But critics – including the Attorney General’s Office, New Mexico Industrial Energy Consumers and PRC staff – intervened against the deal over concern that TECO was overpaying and that quality and reliability could suffer.
That led to contentious public hearings last May, negotiations and a settlement whereby TECO agreed to:
– A freeze on customer rates until 2017.
– A promise to transfer savings from utility cost reductions, which the company values at about $11 million in the next couple of years.
– A 99-person cap on job losses for three years.
– Retention of the gas utility headquarters in Albuquerque.
– A commitment to maintain the utility’s current level of community involvement and support.
NM Gas currently serves about 513,000 customers in 23 of New Mexico’s 33 counties.