The Public Service Company of New Mexico on Thursday asked the state Public Regulation Commission for approval to raise its rates for residential customers by 15.8 percent — which would mean about $123.5 million in revenue for New Mexico’s largest utility.
But PNM says the rate increase would be offset by lower fuel costs if the regulatory commission also approves its plan for the San Juan Generating Station.
Because of a new coal supply contract that’s part of the San Juan proposal, the net increase would be 8.31 percent for the average residence. This, the utility says, would amount to about $6.07 per month on residential electric bills, or about 20 cents extra per day.
Unlike PNM’s previous rate request, which was rejected by the five-member commission in May, the new case does not call for a new fee for solar customers to connect to the grid. The solar fee would have ranged from $21 to $26.
“We did not feel that it would be productive to include it in the refiled rate case given the need to implement the new rates in a timely manner,” a PNM spokeswoman said.
In a news release announcing the request, PNM said the extra money is needed to pay for several large-ticket items.
These include four new solar centers, to be online by 2016 and capable of powering 16,200 homes. The projected cost is $65 million.
PNM also proposes to have the $50 million La Luz Natural Gas Plant online by 2016. Emission control equipment required for the San Juan Generating Station to comply with federal regulations would cost $58 million. Purchasing the Rio Bravo Generating Station natural gas plant would be another $32 million, and purchasing leases for Palo Verde Nuclear Generating Station Unit 2 in Arizona would cost $144 million.
Other investments would be $61 million at PNM’s Rio Puerco Switching Station and $8 million to improve substation security and modernize the utility’s distribution system operations center.
Mariel Nanasi of New Energy Economy, a leading critic of PNM, said the utility company’s proposal is largely dependent on fossil and nuclear fuel sources.
“The fact is that only a tiny percentage of the rate increase will go to solar,” Nanasi said in a statement. “What’s true is that PNM’s old coal plants and out-of-state nuclear plants are in need of constant upgrades and maintenance and pollution controls. PNM’s coal and nuclear choices are the energy behemoths that keep on giving gifts to PNM’s senior management and shareholders at the expense of consumers.”
Nanasi said PNM’s top five executives are paid a total of $7.46 million per year, plus top-flight health insurance. Meantime, she said, “thousands of Navajos who live in the toxic shadow of the coal plant live on an average of $7,200 per year and are dying of cancers and liver and heart disease at an alarming rate. The injustice is great and the impacts of exploitation real. That’s what this rate case will pay for.”
According to information supplied to PNM stockholders at their annual meeting last May, Nanasi’s figures for the compensation of the top five PNM executives are basically correct when the value of stock awarded to them is included. PNM’s highest-paid employee is CEO and President Pat Vincent-Collawn, whose base salary and incentive pay in 2014 were just shy of $1.3 million. The stock she received last year brings her total compensation to $3.35 million.
PNM spokeswoman Jodi McGinnis Porter said less than $1 million in the new rate request would be allocated to the salaries of those five top executives. None of the incentive pay is funded by ratepayers, she said.
The Public Regulation Commission in May rejected PNM’s last request for higher rates, saying the utility didn’t submit complete information to support the proposal.
The proposal rejected by the commission three months ago would have cost households $7.80 more a month in the base charge compared to current rates, which were set in 2011. The rejected plan also called for 16.34 percent more in monthly charges. Altogether, the residential increases would have meant another $107 million a year in revenue for PNM.
Correction: This story has been amended to reflect the following correction. An earlier version of this article quoted PNM spokeswoman Jodi McGinnis Porter saying $1 million in the new rate request would be allocated to the salaries of PNM's five top executives. She actually said "less than $1 million."