February 25, 2023

Low-income utility rate legislation heads to House floor


A bill intended to help low-income households afford utility bills is headed to the House floor.

Under HB 218, electric utilities like the Public Service Company of New Mexico would propose utility rates for low-income consumers that would then have to be approved by the New Mexico Public Regulation Commission.

HB 218 is sponsored by Rep. Kristina Ortez, D-Taos. 

The bill passed the House Judiciary Committee on a 6-5 party-line vote on Friday and previously passed the House Consumer and Public Affairs Committee.

A PNM representative said that it would allow PNM to work with low-income individuals prior to them missing a payment. PNM estimates that 50 percent of households it serves could qualify for the low-income rate should the bill pass.

A Kit Carson Electric Cooperative official said the rural utility previously proposed a low-income rate, but was denied because of a past court ruling. 

While investor-owned utilities like PNM would be required to offer a low-income rate, it would be optional for rural cooperatives like Kit Carson. In addition to electric utilities, gas utilities like New Mexico Gas Company are also included.

HB 218 only applies to utilities regulated by the PRC, which means it does not apply to water or wastewater utilities, nor does it apply to municipal or county-owned electric utilities.

When a customer cannot pay their bill and their power is shut off, costs are borne by other ratepayers. If fewer customers default on their bills, the utilities could see cost savings because they will not have to send someone out to disconnect customers. 

Rep. Ryan Lane, R-Aztec, expressed concerns that other customers will have their rates increase as a result of the low-income utility rates, especially for people whose income is near the cutoff line for the low-income rate.

The discussion comes as high natural gas prices have raised utility bills for people across the nation. Natural gas is not only used for heating homes and powering appliances. It is also the largest fuel source for electricity generation in New Mexico. The increase in natural gas prices has led to increases in bills through the fuel cost adjustment. The fuel cost adjustment clause allows utilities to raise rates a certain amount when natural gas prices increase without requiring PRC approval. The fuel cost adjustment can also decrease if natural gas prices, or other fuel prices, decline.