New Mexico Public Regulation Commission approves changes to PNM settlement agreement
The New Mexico Public Regulation Commission approved Wednesday an order that modifies the previously filed settlement agreement in the general rate review filing of Public Service Co. of New Mexico (PNM), a wholly owned subsidiary of PNM Resources.
After hearing oral arguments, the Commission reconsidered its order from Dec. 20, 2017, and approved the revised settlement 3-2 with certain changes. The order taking effect is dependent on acceptance by parties to the settlement.
The commission has not released the written order but based on the oral hearing, it is believed that it would effectively reduce the previous amount of $62.3 million by passing the benefits of federal tax reform on to customers. Reports suggest the changes could change the previously approved 9 percent increase in customers’ bills to 2 percent.
The order defers the Dec. 20 finding of imprudence related to PNM’s Four Corners Power Plant participation to a later regulatory proceeding and includes an additional revenue reduction to the settlement agreement of approximately $9 million for the exclusion of the return on $148 million of Four Corners Power Plant investments. It maintains the two-year phase-in of rates.
“We are disappointed that the Commission decided to propose modifications in their Order associated with the Four Corners Power Plant that could result in a significant write-off,” Pat Vincent-Collawn, PNM Resources’ chair, president and CEO, said. “This has consequences to both PNM and its customers by increasing the risks related to the financial health of the utility and jeopardizing the company’s ability to access the capital markets cost-effectively to raise the debt and equity required to deliver reliable energy to customers.”
Parties to the settlement must decide whether to accept the changes by Jan. 16, 2018. If they do not accept the order, the rate review will likely move to litigation. PNM has estimated that if the order is approved, it could result in a pre-tax write-off of $55 to $60 million.
Parties to the settlement include PNM; the NM Attorney General; the Utility Division Staff; City of Albuquerque; Bernalillo County; New Mexico Industrial Energy Consumers; Albuquerque Bernalillo County Water Authority; Coalition for Clean Affordable Energy; Wal-Mart Stores East, LP and Sam’s East, Inc.; Kroger Co.; Sierra Club; Renewable Energy Industries Association; and Western Resource Advocates.
