Public Service Company of New Mexico on Monday refused an offer by state regulators to reopen hearings in a controversial rate case on the grounds that it has already submitted sufficient information to regulators and that extending the case further would harm the company financially.
“Because PNM has not had an increase in its rates since July 2011, it is important to mitigate its revenue deficiency as soon as possible through a final resolution of all of the rate issues pending before the Commission,” PNM’s regulatory filing reads.
Last week, the New Mexico Public Regulation Commission unanimously approved an order to reopen hearings if PNM agreed to certain conditions, giving the utility the chance to provide cost-benefit analysis a hearing examiner said was lacking from its rate request.
Had the hearings been reopened, the PRC would have made a decision in the case by Dec. 15. It is now expected to make its decision by Sept. 30.
The hearing examiner’s Aug. 4 recommendation slashed PNM’s rate hike request by two-thirds, from an increase of $123.5 million in annual revenue to $41.3 million. PNM customers on average would see their bills rise by 6.4 percent under the recommended decision, instead of 14.4 percent under the utility’s request.
PNM CEO Pat Vincent-Collawn said in a statement Monday that the volume of documents already on file “clearly demonstrates that our actions were prudent and that our proposed valuations presented in the rate case are reasonable.”
“While we appreciate the commission’s willingness to address the implications of the hearing examiner’s recommended decision, we cannot agree to further delays in the implementation of new rates,” she said. “We believe that the extensive record established in this proceeding provides the commission with a strong basis to make a balanced decision.”
Several of the intervening parties in the case also objected to the PRC’s offer to reopen the case, saying doing so would give PNM an unfair advantage and create possible procedural problems.
Mariel Nanasi, executive director of New Energy Economy, an intervenor, called the order “concerning.”
“It’s called the Public Regulation Commission; it’s supposed to represent the public,” Nanasi said. “If they can’t hold PNM to a simple burden of proof, then what does that mean for the rest of us?”
The PRC said it would reopen the hearings if PNM agreed to submit more information about transactions associated with the Palo Verde Nuclear Generating Station and air pollution controls at the San Juan Generating Station. Regulators also asked PNM to make its resource modeling software available to the commission for free.
The information requested by the PRC reflected the primary points of disagreement between PNM and hearing examiner Carolyn Glick. In her recommended decision, Glick said PNM acted “imprudently” by failing to sufficiently weigh other options, such as natural gas or renewable energy, when it purchased 64.1 megawatts of nuclear power for $163.5 million in January and extended several leases at Palo Verde for $19.5 million per year.
She also said PNM failed to prove that $52.3 million worth of air pollution controls at San Juan was a necessary investment.
PNM maintains the investments were prudent and appropriately analyzed.
The utility lost much of its support for the full amount of its requested rate increase during PRC hearings earlier this summer on the Palo Verde transactions. Bernalillo County, the city of Albuquerque and PRC staff said PNM based its decisions on previous lease agreements and not a complete cost-benefit analysis. Last week, the Greater Albuquerque Chamber of Commerce board of directors released a statement in support of PNM and in opposition to Glick’s recommended decision.
The state Attorney General’s Office had been in settlement negotiations with PNM, but a spokesman said Monday those talks “are no longer ongoing.”