Dive Brief:

• PNM Resources this week asked New Mexico state regulators to authorize $99 million in additional revenue, effective in 2018, part of a plan to make its power mix more sustainable. According to the utility, average system bill impacts from the increase would be 11.2% across all rate classes.
• The rate hike stems from an agreement reached last year to shut down units at the coal-fired San Juan Generating Station, and the use of Palo Verde Nuclear Generating Station Unit 3 to serve retail customers.
• The Albuquerque Journal reports residential customers could see rate hikes of 13% over the next two years.

Dive Insight:

PNM President and CEO Pat Vincent-Collawn defended the utility's proposal in a statement this week, reminding observers that while the rate increase may seem high, the coal shutdown plan was approved over a year ago.

"This rate filing represents important changes that will transform the generation portfolio that serves our New Mexico customers as we use carbon-free nuclear energy to replace two coal-fired units that will be shut down," she said in a statement. "We know that this change comes at a price, but we also know that it is important to our customers, and to all of us, to have reliable, affordable and sustainable energy." 

The company said the request reflects the closure of San Juan units and a plan "that was broadly supported by the intervenors." PNM also said its filing also proposes changes to rate design "to better align electric rates with the actual costs to serve customers," grow energy efficiency and eliminate utility disincentives related to load management programs.

The utility will also hold a conference call with analysts next week to discuss the rate request with analysts, and to give an update on other company activities.

Earlier this year, the New Mexico Public Regulation Commission approved a $61.2 million rate increase for PNM, a little under half of the $121 million increase the utility sought, related to the purchase of nuclear generation from the Palo Verde plant.

In October, the utility withdrew plans for a small gas-fired plant it had included in plans to replace power from San Juan, informing regulators the proposed $100 million, 80 MW unit was no longer necessary.