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PNM wants attorney rates confidential

ALBUQUERQUE, N.M. — Public Service Co. of New Mexico and intervening parties in the utility’s latest rate case are bickering over attorney fees.

PNM says it doesn’t want to reveal details, such as the hourly rates it pays, so it can maintain a competitive advantage when negotiating legal fees in the future. But opposing parties say if customers have to pay the bill, they should be able to review the costs to determine if they’re reasonable.

PNM requested in late March that Ashley Schannauer, the Public Regulation Commission hearing examiner assigned to the rate case, allow attorney fee information to be withheld from all intervening parties, except for PRC staff and the Attorney General’s office.

The utility has already provided the total amount PNM is paying its attorneys, which would be recovered from customers through new rates. But to reveal more specific information about individual agreements could provide some parties with unintended competitive advantages, said PNM spokesman Pahl Shipley.

“That can have a chilling effect on the willingness of the contractors who negotiate with the company to offer favorable pricing in the future,” Shipley told the Journal in an email.

New Mexico Industrial Energy Consumers, the environmental group Western Resource Advocates, and the Coalition for Clean Affordable Energy filed counter briefs opposing PNM’s request.

“PNM is always trying to keep information secret that they think gives them a competitive advantage or disadvantage, and sometimes that’s legitimate because there are trade secrets,” said the Industrial Energy Consumers general counsel, Peter Gould. “But the notion that ratepayers should fully pay for PNM’s attorney fees without even being able to look at it is nonsense… The effort to keep everything secret in this case is just offensive, almost laughable.”

Western Resource attorney Steve Michel said PNM’s argument runs counter to market logic.

“PNM’s confidentiality claims are exactly backward from an economic standpoint,” Michel said. “The notion that revealing information will somehow evolve into higher prices is bogus, because competitive markets require as much information as possible to be competitive. If you disguise or hide information, you end up with higher, not lower, prices.”

In any case, all parties have already signed confidentiality agreements to review information in the rate case, Michel said.

Public hearings in the case are scheduled to begin in June. PNM is seeking an overall average rate increase of 14 percent to recover $99.2 million for costs incurred in shutting down two of four units at the coal-fired San Juan Generating Station near Farmington, and for new capital investments in the electric grid, among other things.

If approved by the PRC, average residential customers would pay about $10 more on their monthly utility bills. PNM proposes to buffer the impact by imposing half the increase in 2018, and the remainder in 2019.

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