New Mexico regulators make recommendations to PNM Resources on rate case
The New Mexico Public Regulation Commission (NMPRC) issued its recommendations last week for the PNM Resources application for a 2024 change in rates.
The recommended decision equates to a revenue increase of $6.1 million for the company. The adjustments in the recommended decision include:
• Disallowance of $64 million of rate base investments in the Four Corners coal plant;
• No return on a $39 million regulatory asset associated with Palo Verde leasehold improvements, as well as a separate recommendation to retroactively refund $38 million associated with expiration of Palo Verde leases; and
• Maintaining current useful lives of existing gas plants beyond 2040, versus PNM’s proposal to change these dates to 2040.
Further, the recommendation also postpones recovery of $55 million of delayed rate base investments that may be requested again in future filings and $11 million of adjustments to forecasted annual costs.
“We understand the sensitivity to any cost increase in today’s environment and have taken steps to offset nearly six years of inflationary costs on customer bills. However, this recommendation to disallow recovery for traditional legacy power sources as we step forward to lead New Mexico’s energy transition is disappointing,” Pat Vincent-Collawn, chairman and CEO of PNM Resources, said. “We will file our exceptions to the recommendation with the Commission to seek a more constructive outcome balancing the interests of all our stakeholders.”
Parties to the case have an opportunity to file exceptions to the recommended decision before a final order is issued. The period for a decision in the case ends Jan. 4, 2024.
Also, the recommended decision in this case calls for approval of PNM’s proposal to add 12 megawatts of distribution-level battery storage to expand the capacity of overloaded feeders at two locations. This solution supports reliability and resilience of the grid and accommodates more renewable energy in these areas. The proposal was unopposed by intervening parties.
The project reflects $33 million of capital expenditures included in PNM’s investment plans. It is expected to be operational in 2024. PNM said this type of solution could be implemented more broadly across its system and expects to file additional proposals.
PNM Resources is an energy holding company based in Albuquerque, N.M., that provides electricity to more than 800,000 homes and businesses in New Mexico and Texas.
