PRC recommended decision proposes cheaper monthly PNM electric bills

Instead of having slightly more expensive electric bills in 2024 like the Public Service Company of New Mexico proposed, New Mexicans under the utility could see cheaper bills by a few dollars each month if state officials choose to follow through with a recommendation announced Friday morning.

Following a nearly monthlong hearing in September on PNM’s request to increase prices in 2024, New Mexico Public Regulation Commission hearing examiners released their decision Friday morning recommending the state regulators approve largely the opposite.

Hearing examiners Anthony Medeiros and Christopher Ryan’s decision is nearly 400 pages long and takes into account PNM’s requests and reasonings brought forward a year ago in an 1,800 pages-plus rate change application.

PNM submitted that initial application in December 2022 requesting residential base rates increase by 9.7%, though the utility argued that would only be a 0.9% increase — about 75 cents more on an average residential bill — when taking into account renewable energy savings and other rider changes.

Under Friday’s recommendation, average residential customers would see a 3.36% decrease and small business customers would see an average 4% decrease on their monthly bills.

That would add up to around $2 or $3 in savings each month for the average residential customer using 600 kilowatt-hours per month, according to the recommended decision.

PNM’s rate change application requested the recovery of $63.8 million, but Ryan and Madeiros found that PNM’s projected revenue deficiency would only add up to $6.1 million — a 90% reduction.

Many factors play into the large reduction the hearing examiners calculated, including recommended decisions for a decreased return on equity, a stagnant capital structure, that PNM imprudently invested in the Four Corners Power Plant and modifications to investment returns on the Palo Verde Nuclear Generating Station.

PNM spokesperson Ray Sandoval also noted the proposed rate savings, affected by the recommended decision’s small increases to PNM’s rates, are a result of lower fuel costs due to the utility’s transition to cleaner energy.

PNM plans to file exceptions to the recommendation. Chairman and CEO of PNM Resources Pat Vincent-Collawn said in a statement the utility seeks a more constructive outcome that balances all stakeholder interests.

She said the company understands the sensitivity to cost increases and has made efforts to offset almost six years of inflationary costs on bills.

The last time New Mexicans saw higher rates under PNM was 2018 and 2019, and the utility has previously said the pandemic and its economic duress delayed its next price increase request.

“However, the disappointing approach to this recommendation calls for further reductions on traditional power sources and misses opportunities to look forward and implement new solutions to benefit customers as we lead New Mexico’s energy transition,” Vincent-Collawn said.

The deadline to file exceptions is Dec. 15, and parties can respond to those filed exceptions by Dec. 20. It’s an accelerated timeline so commissioners have enough time to evaluate exceptions and responses before making a final decision.

The final order is in the hands of Commissioners James Ellison and Gabriel Aguilera, who can accept or modify the recommendation. Commissioner Pat O’Connell recused himself from this case since he used to work at PNM.

The decision is expected by Jan. 4.