March 1, 2023

PRC questions NM Gas Company officials about high utility bills

As New Mexicans across the state face high bills for heating their houses with natural gas or running gas appliances, the New Mexico Public Regulation Commission asked the state’s largest gas utility to provide some insight into the prices and what the company is doing to help customers.

Representatives from New Mexico Gas Company attended the PRC weekly meeting on Wednesday to address the high costs people are experiencing.

New Mexico Gas Company Vice President of Engineering, Gas Management and Technical Services Tom Bullard said that various factors are influencing the cost of gas, including winter storms and the war in Ukraine.

He said market forces like supply and demand impact the cost of gas.

“We’re not a production company or a marketing company,” he said. “So we’re in the market buying gas and we’re subject to market prices just like everyone else is.”

But, while gas costs have almost doubled, he said customers could have faced much higher utility costs had New Mexico Gas Company not engaged in a practice known as hedging. Hedging involves locking in a price by purchasing gas using a futures contract.

Had New Mexico Gas Company not done so, Bullard said gas prices would have quadrupled what they were a year ago.

New Mexico Gas Company hedges 100 percent of its baseload gas. Baseload gas is what is needed to cover customer demands on an average day, but does not cover peaks in demand. The rest of the gas, known as swing gas, is subject to market prices.

While hedging has reduced what customers are paying compared to what they could have been paying, New Mexicans are still experiencing sticker shock.

Customers can look at their bills to see the estimated cost of gas for the upcoming month.

New Mexico Gas Company is also providing updates online and via social media and has been hosting meetings to help customers understand their bills.

Various assistance programs are available to customers who are struggling to pay their bills. These include the federal Low-Income Home Energy Assistance Program, the HEAT NM Fund, which is administered by the Salvation Army for New Mexico Gas Company, the state’s NM Home Fund and the New Mexico Mortgage Finance Authority’s Energy$mart program that helps low-income households lower their monthly bills by improving energy efficiency.

The gas company also offers a budget billing program that allows customers to pay the same amount each month, thus reducing the difference between winter months and warmer months.

Commissioner Gabriel Aguilera asked if New Mexico Gas Company advertises these programs on customer bills or how people can learn about them without going to one of the events that the gas company hosts for customers. He also asked if these programs are retroactive or if customers would need to apply for them in advance.

In winter months, the HEAT NM program information and LIHEAP availability is placed on the customer’s bills.

Customers can apply for assistance programs at any time and they can be applied to past due balances or future balances.

“I think it’s clear that the lion’s share of the increases that people are seeing are due to the purchase price of gas and not the distribution rates,” Commissioner James Ellison said.

Ellison asked if the gas company is concerned that the high bills will lead customers to move away from gas in favor of electrification. 

New Mexico Gas Company officials say they have not seen the impact yet, but it could come in the future with recent incentives for electrification.