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For the second year in a row, the Public Service Company of New Mexico has proposed a large rate increase for customers, setting off another battle over its charges that is likely to be protracted and contentious, as well as costly for the electric utility, its critics, taxpayers and others.

PNM on Wednesday asked the state Public Regulation Commission for a $99.2 million annual increase in its rates to be implemented over two years. The monthly bill for the average residential customer would jump more than 14 percent if the full rate increase gains approval.

The request comes a little more than two months after the commission approved a $65.7 million rate increase for PNM as a result of a request filed in 2015. The utility originally sought a rate hike of $123.5 million.

The 2015 rate increase request resulted in numerous hearings before the PRC over 13 months. Numerous attorneys and experts for government, the utility and environmental and consumer groups were involved in the case, which was among the most hard-fought rate cases to come before state regulators.

In trimming PNM’s requested rate increase, the PRC ruled the utility couldn’t recover costs for some nuclear power purchases and costs associated with pollution-control equipment at its San Juan Generating Station.

The company says the rate increase it requested Wednesday would have occurred regardless of the prior case and is necessary to reimburse the utility for costs related to shutting down part of the San Juan plant. The shutdown will occur in 2018.

The PRC has approved a plan to retire two of the coal-powered units at San Juan and replace the power with 134 megawatts of nuclear energy from the Palo Verde Nuclear Generating Station in Arizona, as well as a small amount of solar and wind power. The agreement brought the company into compliance with U.S. Environmental Protection Agency regulations, but the company said it should not take a financial loss as a result.

The proposed rate hike also would pay for $29 million in maintenance to the company’s power facilities and $11 million to mitigate a 2 percent decrease in energy sales since 2015.

Dan Ware, a spokesman for PNM, said, “Everybody is being more energy efficient and using more energy-efficient means to power their homes and businesses, but we still need to recover those costs because we need to cover the infrastructure, the lines, the poles.”

If the PRC approves the rate hike as proposed, the monthly bill for the average residential customer would jump 7.2 percent in 2018 and 7.1 percent in 2019. If the full rate increase is not approved, the company plans to implement any rate hike it receives at once, Ware said.

But some critics said the rate case illustrates the utility’s overreliance on coal and nuclear power, whose production is costly to maintain.

Roughly 30 percent of PNM’s more than 500,000 customers are low-income residents, according to the group New Energy Economy.

Ware said PNM served 3,000 people through its Good Neighbor Fund program in 2015. The program is funded by utility shareholders and employees, as well as customers.

Edward Tabet-Cubero, director of the New Mexico Center on Law and Poverty, called PNM’s second rate case unconscionable, saying it would create a significant burden for the half-million New Mexicans living in poverty.

“This is just another example of an entity that’s completely out of touch with the real challenges that most New Mexicans are facing,” he said in an email. “This rate increase stands to have a disproportionate impact on the poor, particularly children, in our state, all to the benefit of PNM.”

James Hallinan, a spokesman for the state Attorney General’s Office, which objected to the full rate increase sought by PNM in the 2015 case, said, “The Office of the Attorney General is focused on ensuring all New Mexicans have access to affordable, reliable energy, and our office will continue to represent New Mexico consumers in rate cases.”

Mariel Nanasi, director of New Energy Economy, said the reliance on nonrenewable energy sources causes “continuous rate increases on the backs of ratepayers.”

“These outdated resources are in constant need of pollution controls and upgrades, just to keep them operational and safe, and that causes the vast majority of this rate hike,” she said in a prepared statement. “These belching behemoths are the gifts that keep on giving PNM more money.”

PNM said it has continued to invest in environmental protection measures at its power plants and promote solar and other clean energy technologies.

The rate increase granted by the PRC to the utility in September resulted in a increase of 9 percent for the average residential customer.

PNM has appealed the commission’s decision to the New Mexico Supreme Court, seeking the full $123.5 million rate increase that it sought. The court is scheduled to hear a motion brought by New Energy Economy in the case Monday.

Contact Rebecca Moss at 505-986-3011 or rmoss@sfnewmexican.com.

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