PNM wants to change rates yet again in 2025

If at first you don’t succeed, try, try again.

The Public Service Company of New Mexico plans to file an entirely new rate case to determine rates the utility wants to start up in 2025. The company announced its plans shortly after the New Mexico Public Regulation Commission on Wednesday largely rejected PNM’s 2022 request to increase rates this year.

PNM didn’t specify when in 2024 it plans to file the new rate change application.

New Mexicans’ monthly electric bill charges could soon drop, as opposed to the rate increase PNM wanted to enact this year, because of the PRC decision. PNM hasn’t yet detailed exactly how bills will be impacted.

The PRC final order against PNM’s rate increase resulted in a $15.3 million revenue deficiency that PNM can recover from its customers. That’s 76% less of a billing increase than PNM asked for in its 2022 application to change rates, which would have created a nearly 10% residential base rate increase, though the utility said it would only have been a 0.9% increase with savings and riders taken into account.

The final order still allows slightly more than PRC hearing examiners recommended, which would have created a $6.1 million revenue deficiency. That would have resulted in about a 3% decrease for residential monthly bills.

PNM is calculating exactly how the PRC final order will impact customers’ monthly bills. The utility has to file a notice by Jan. 10 laying out numbers. New rates could go into effect as soon as the next billing cycle.

The state commissioners also ruled PNM imprudently invested in the Four Corners Power Plant located in San Juan County. A previous PRC decision ruled the utility also made poor business investments in the Palo Verde Generating Station based in Arizona. The commissioners on Wednesday deemed PNM could not recoup from customers millions of dollars of investments made in those facilities.

The utility’s return on equity, a measure of profitability, also dropped lower than requested, per the final decision.

PNM can appeal the PRC decision, which must happen by early February. The company said it’s considering its next steps, including a potential appeal of certain issues in the final order.

PNM Resources Chairman and CEO Pat Vincent-Collawn said in a statement the final order is disappointing. The utility argued throughout the rate case that it needed additional revenue collection to help meet its clean energy transition goals.

PNM must be emissions-free by 2045, per state law. The company has committed to doing that five years early, by 2040.

“The transition to clean energy means our system is changing rapidly, requiring investments to upgrade the grid to maintain reliability while bringing solutions to customers at affordable prices,” Vincent-Collawn said. “As we move forward it will require collaboration by stakeholders to achieve the clean energy transition while preserving the financial health of the utility.”

This PRC ruling also comes after a major merger agreement with the large energy company Avangrid fell through with the new year. It was something PNM previously said also would help the utility’s clean energy goals.

Vincent-Collawn said PNM hasn’t changed its rates for the past six years. The previous time PNM filed a rate change application was 2016, which impacted bills in 2018 and 2019.

The utility said it held off on a rate change for so long because of the financial burdens of the COVID-19 pandemic.