NM Gas Co. agrees to cut rate increase proposal by $19M

New Mexicans could later this year see their monthly gas bills increase a few dollars less than New Mexico Gas Co. originally proposed under a new settlement the utility agreed to.

The gas company settled with environmental and consumer advocacy organizations and agencies on Friday in its rate increase request with the New Mexico Public Regulation Commission.

New Mexico Gas Co. originally requested recovering about $49 million from customers starting in October. The settlement cuts that down to $30 million.

That would result in a 7.1% increase, or $4.21, to the average residential bill with a use of 53 therms of gas per month. The company’s original application proposed an 11.2% billing increase, or about $6.70 more per month. New Mexicans’ access fees would also stay at $12.40, rather than increase by about three dollars as the gas company initially requested.

Return on equity would stay the same, sitting stagnant at about 9.4%, rather than increasing to the 10.5% the utility originally asked for.

“We appreciate the spirit of collaboration that all parties to the case brought to the table in reaching the settlement,” gas company spokesperson Tim Korte said.

Mariel Nanasi, executive director of New Energy Economy, noted the $10 million regulatory asset the company also agreed to remove, which would’ve covered expenses incurred for a liquefied natural gas, or LNG, storage facility the utility wanted to build in Rio Rancho. The PRC hasn’t made a formal decision on the case, but a hearing examiner recommended against the LNG facility.

“We got a pretty good settlement in the gas rate case,” Nanasi said.

The PRC still needs to hold a hearing and the final decision remains in the hands of the state commissioners. It’s likely they’ll approve the settlement because it’s uncontested, meaning all parties agreed to it.