ALBUQUERQUE, N.M. — A half-million customers who depend on New Mexico’s largest electric utility for their power will see an average increase in rates of roughly 10 percent under a compromise adopted by state regulators during an hours-long meeting Wednesday.
The Public Regulation Commission weighed the request by Public Service Co. of New Mexico to raise more than $120 million a year through higher rates to pay for new solar generating stations, pollution control systems, nuclear power and other infrastructure.
Concerns raised by environmentalists over the value of PNM’s stake in an Arizona nuclear plant spurred a recommendation over the summer that the multimillion-dollar request be slashed by two-thirds.
The commission considered parts of the recommendation, but it ultimately crafted its own version that allows the utility to recoup the cost of leases for power from the Palo Verde plant. Not included in rates are some of the utility’s capital improvements.
Had the commission adopted PNM’s initial request, customers on average would have seen their bills increase by more than 14 percent. The hearing officer had recommended less than half of that.
Commission and utility officials on Wednesday were trying to calculate exactly how much of an increase each class of customers will face under the ruling. Early numbers suggested residential customers could see an increase of about 13 percent.
CEO Pat Vincent-Collawn said in a statement that PNM expects to appeal to the New Mexico Supreme Court once the utility reviews the commission’s order.
Commissioners Valerie Espinoza and Sandy Jones voted against the plan.
Espinoza said the utility never met its burden of proof when it came to justifying the increase and should have presented more alternatives.
“This decision, bottom line, is going to make the ratepayers responsible for funding the nuclear risks,” she said. “I don’t believe it’s fair at all.”
Jones had suggested that PNM be allowed to sell power from the nuclear plant on the open market to recoup funds and lessen the burden on customers. He said New Mexico has benefited from nuclear power for years now.
“Some like it. Some don’t. But it’s absolutely carbon-free,” he said.
The power from the Palo Verde Nuclear Generating Station is intended to help fill part of the void that will be left by the closure in 2017 of two units at the coal-fired San Juan Generating Station in northwest New Mexico. The planned closure is the result of an agreement with state and federal officials to curb haze-causing pollution in the region.
Some environmentalists have been vocal opponents of the plan, accusing the utility of misleading regulators about the cost of the Palo Verde power. They argued that coal and nuclear power would end up costing ratepayers more over time due to cleanup costs and future pollution regulations.
PNM officials had warned that if regulators denied the utility the ability to recover costs related to Palo Verde, the company could be forced to erase nuclear energy from its portfolio of resources.
The case began more than a year ago when the utility first proposed the increase. A series of hearings, protests and legal challenges followed.