Nm Public Regulation Commission

NM Hearing Examiner Issues Recommended Decision in PNM Electric Rate Case

Jun. 21, 2011 (Business Wire) -- A New Mexico Public Regulation Commission hearing examiner issued a recommended decision today regarding the ongoing electric rate case proposal for PNM, PNM Resources’ (NYSE: PNM) New Mexico utility. The hearing examiner has recommended that state regulators approve – with modifications – an agreement that includes a two phase, $85 million rate increase.

“The evidence shows that the $85 million revenue increase is just and reasonable…” the hearing examiner wrote in her evaluation of the agreement, or stipulation, which was reached in February between PNM and a group of key parties that includes Commission staff and the state Attorney General’s Office.

If the Commission approves the stipulation as recommended, and the other parties to the stipulation agree to the recommended modifications, PNM base revenues would increase 5.7 percent, or $45 million, during Phase 1 that begins in August. Phase 2 would increase revenues 5.1 percent, or $40 million, beginning Jan. 1, 2012.

In the recommended decision, the hearing examiner made changes to the stipulation and eliminated a key element: the recovery of up to $20 million through an “Additions Rider” that is designed to capture certain capital costs incurred between June 30, 2010, and Dec. 31, 2012.

“We are disappointed that the recommended decision does not accept the stipulation in its entirety,” said Pat Vincent-Collawn, PNM Resources president and CEO. “The agreement we reached in February effectively balances the need to keep PNM bills affordable while still providing adequate funding for improvements needed for reliability.

“The additions rider was a key element in the stipulation that supported PNM’s agreement to a certain rate path extending through 2013,” Vincent-Collawn said. “We wish we did not have to ask for a rate increase, but we have an obligation to make improvements to our system to serve our customers.”

PNM and other parties have until July 1 to file responses, or exceptions, to the recommended decision. The recommended decision will be presented to the Commission for consideration. No date has been set for Commission review.

The recommended decision is available at: http://www.pnmresources.com/investors/regulatory.cfm.

Background:

PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2010 consolidated operating revenues of $1.7 billion. Through its utility and energy subsidiaries, PNM Resources has approximately 2,630 megawatts of generation resources and serves electricity to more than 875,300 homes and businesses in New Mexico and Texas. The company also has a 50-percent ownership of Optim Energy, which owns nearly 1,200 megawatts of generation resources in Texas. For more information, visit the company’s Web site at www.PNMResources.com.

EP Electric gets final OK for $83.9M power plant in Sunland Park, NM

SANTA FE - A divided state Public Regulation Commission today gave El Paso Electric Co. final approval to build an $83.9 million power plant in Sunland Park, N.M.

The project had generated no controversy, but Commissioner Jason Marks made a last-minute attempt to delay construction.

Fellow commissioners defeated Marks' proposal on a 3-2 vote that came with high drama. Commissioner Jerome D. Block Jr. was not at the meeting, but he cast the deciding vote for the company by telephone.

Marks questioned the need for the plant, saying he was concerned that El Paso Electric's forecasts for electricity usage were overly optimistic.

At one point, Marks accused the company of having its "thumb on the scale" in projecting demand for electricity in the Las Cruces area and El Paso. He said an expensive plant, if unneeded, would only be a burden to ratepayers.

The Public Regulation Commission was at the end of a nine-month deadline to decide whether to approve the project. Marks' proposal for a delay could have kept it in limbo at least until the end of 2011.

Commissioners Ben Hall and Patrick Lyons favored authorizing the plant. Lyons said it would be good for the business climate in Las Cruces.

Block, his voice crackling through a speaker phone, later joined with Hall and Lyons to approve El Paso Electric's project.

Commissioner Theresa Becenti-Aguilar sided with Marks by voting to delay it for further study and another hearing.

For perhaps half an hour, it appeared that the project might not advance because the commission was divided 2-2. But then Block joined the meeting via telephone, giving the commission its full complement of five members.

El Paso Electric's 87-megawatt, natural-gas-fueled plant eventually will replace units at the company's Rio Grande Power Station. The older generating units probably will be retired within five years, an El Paso Electric vice president said earlier this week.

The New Mexico Public Regulation Commission was the last government entity to approve the project.

New Mexico's Environment Department already had approved air-quality permits for the plant and the Texas Public Utilities Commission authorized the project two months ago.

Santa Fe Bureau Chief Milan Simonich can be reached at msimonich@tnmnp.com or 505-820-6898. His blog is at nmcapitolreport.com.

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