What to know about how PNM’s price increase request will proceed

Understanding utilities and their regulations isn’t always the easiest topic. And when the Public Service Company of New Mexico asks to increase average monthly bills by $23 over the next two years, not all people may completely understand the process of how that works.

So the Journal sat down with experts from the New Mexico Public Regulation Commission to talk about how utility rate change requests work.

The PRC regulates utilities like PNM, as well as other utilities like gas and water, because the entities are natural monopolies.

“They're doing something with a high barrier to entry and a high barrier to financial participation in terms of startup costs that prevent other companies — that might want to do the same thing — from competing,” said John Bogatko, acting legal division director at the PRC.

And if a utility like PNM wants to increase its rates, it first has to ask the PRC for permission.

“People just think that they request it and they automatically get it," Bogatko said, "and that's not accurate."

PNM in June asked the PRC for permission to increase its rates. For the average residential customer using 600 kilowatt-hours, monthly bills would increase by $11.12 in July 2025 and by another $12.48 in January 2026.

This comes after the PRC denied many of PNM’s requests in its most recent rate change case, actually decreasing rates instead of increasing them as the utility had asked.

Just like that case, which wrapped up in January, it’s up to the PRC to approve, deny or partially approve PNM’s rate change request this time around.

After a case is filed, as PNM did in June, people can intervene — “challenging and testing the case,” Bogatko said.

He said PNM cases tend to attract a lot of intervenors, no matter the request. Indeed, this case has a slew of intervenors, including those representing environmental and consumer interests.

Ed Rilkoff, PRC utilities division director, explained PRC staff’s role as an intervenor. He said staffers advocate specifically for the public interest, separate from the PRC as a whole and its commissioners.

“We are tasked with trying to find a balance between what the utility requires in its rate case and its ability to make a fair return on its investment with the cost to the consumers,” he said.

All the parties eventually participate in a hearing at the PRC with one or more commission-appointed hearing examiners basically acting as “judicial officers,” Bogatko said.

“The hearing examiner's purpose is to vet the issues, make sure that there's an adequate evidentiary record as a result of this public hearing proceeding, and to assist the commissioners, who are the ultimate decision-makers in the case,” he said.

The hearing for the current PNM rate case starts in February.

The hearing examiner makes a recommendation — which Bogatko described as a “recommended road map” — that commissioners can choose to adopt in full, part or not at all. It can take a few months for a decision to come following the recommendation.

The ultimate goal is for the PRC to ensure rates are “just and reasonable.” Bogatko said that means the commission takes into account all competing interests.

“We want the company to be healthy. We want it to be in good financial shape so that it can provide reliable and safe electric utility services to its customers,” he said. “We also want to make sure that the cost of that is … (gradual). We don't want any rate class — be it residential or industrial or municipal — to be slapped with a rate increase that would shock the conscience. That would be too much, too fast.”

A final PRC decision sometimes isn’t the end of the matter. Utilities can — and have — appeal PRC decisions with the state Supreme Court .

PNM's latest rate case comes particularly soon after its most recent case. Rilkoff said this case is about the financial investments necessary for PNM to transition to clean energy, which past rate change cases haven’t been so largely focused on.

“A significant portion of this increase is tied to the cost of new renewable projects,” he said. “But over time, renewable energy is expected to lower fuel and maintenance costs.

“So once these investments pay off, rates may stabilize and even decrease but it's a long term game.”