Dive Brief:
- State regulators have asked Public Service Company of New Mexico (PNM) to detail the impacts of a proposal to slash the utility's rate increase request by two-thirds, requesting specifics on the “serious financial harm” the utility said it anticipates.
- PNM requested a rate increase of more than $123 million, but a hearing examiner recommended a $41 million increase. The utility has indicated it would challenge such a decision in the state's Supreme Court.
- The Albuquerque Journal reports hearing examiner Carolyn Glick questioned the utility's decision to purchase more than 64 MW of power from the Palo Verde nuclear plant, finding the utility did insufficient research into potential alternatives.
Dive Insight:
As the New Mexico Public Regulation Commission closes in on a rate decision for PNM—expected by Aug. 31—regulators want more information on the alleged harm the utility says it will face if a much-lower revenue level is approved.
According to the Journal, after PNM told regulators it would face “serious financial harm” if Glick's recommendation were approved regulators requested information on the specifics, including PNM's investment in generation from the Palo Verde plant in Arizona. The utility purchased 64.1 MW from the plant, but regulators want to know if the deal can be "unwound."
This isn't the first time PNM has struggled before the commission. About a year ago, the utility's 12% rate request was rejected by the PRC.
Following Glick's recommendation, PNM Resources CEO Pat Vincent-Collawn said in a statement the company was "deeply disappointed" and said the recommendation "does not represent a fair balance between the interests of customers and shareholders."
According to Vincent-Collawn, the rate case represents a request to recover the $655 million PNM has invested in its system since 2011.
Glick's recommendation would exclude several important items from PNM rate base, with the largest being the Palo Verde Nuclear Generation Station Unit 2 capacity. PNM included it at about $153 million, but the hearing commissioner recommended excluding it now and including the generation in a future PNM rate case.
