SANTA FE, N.M. – A continuing dispute over rate hikes by Public Service Company of New Mexico is back before the Public Regulation Commission tomorrow.
PNM had planned to use a January 1 ratepayer hike to recover hundreds of millions of dollars in upgrades at its Four Corners plant until the PRC backed an environmental group’s claim that its financial analysis and risk assessment were flawed.
Mariel Nanasi, executive director of the advocacy group New Energy Economy, successfully argued that spending at the generating station would be “imprudent” and consumers should not have to pay investment costs at the coal-fired plant.
“You can’t spend that much money and not do a valid financial analysis because ratepayers must be held harmless for the imprudent decisions of utility management,” she says.
PNM is asking the commission to adopt an earlier agreement to increase residential customer rates by nearly nine percent over the next two years. The utility company has said it may divest from the Four Corners plant by 2031.
Utilities are allowed to seek rate increases from customers when they make reasonable investments in their facilities. But the PRC found that PNM’s investment in Four Corners was “unjust, unreasonable and violates the law.”
Nanasi argues that the finding makes the current rate hike request contrary to the public interest.
“The law is that ratepayers should not be saddled with costs as a result of utility management malpractice, and that’s really what’s at stake here,” she warns.
New Energy Economy has been calling on PNM to divest from coal and convert to a renewable-energy portfolio for more than a decade.
But Nanasi says as long as the utility’s shareholders make money when the company invests in capital improvements at its existing plants the move toward clean energy will be slowed.
“A dirty old coal plant is going to require more capital expenditures than clean solar and wind,” she says. “So, the utility would rather have dirty old fossil fuels that they have to keep on investing in and that’s in fact what they did in this case.”
The PRC’s public meeting will be held in Santa Fe’s PERA building near the Roundhouse at 9:30 A.M. tomorrow.