A proposed reduction of $4.4 million to Public Service Company of New Mexico's capital investment requirement combined with savings from the recently enacted tax legislation may still yield a fee increase for consumers of approximately 2% spread over two years.
In response to the New Mexico Public Regulation Commission (PRC) Revised Order Partially Adopting Certification of Stipulation order of January 10, 2018, the Public Service Company of New Mexico (PNM), on January 16, 2018, filed a Notice of Acceptance of Proposed Modifications to Revised Stipulation Subject to a Clarifying Change of the Revised Order. The filing requests that the $9.1 million unspecified reduction of certain capital investments at Four Corners Power Plant be reduced by $4.7 million debt-only return on Four Corners investments. This would result in an unspecified reduction of $4.4 million (instead of the $9.1 million in the Commission's order). This would result in a final overall revenue requirement of $57.9 million. If the PRC were to accept PNM's proposed adjustment, the end result, after PNM passes on the savings from the recently enacted tax legislation, would still be about a 2% increase for most consumers, spread over a two year period.
Concurrently, the New Mexico Attorney General (AG) and a number of other intervenors in Case No. 16-00276-UT jointly filed an Acceptance of Modification to Revised Stipulation in Commission's January 10, 2018, Revised Order. This acceptance was without qualification, and the AG was joined by the Utility Division of the PRC Staff, the County of Bernalillo, the Albuquerque Bernalillo County Water Utility Authority, the New Mexico Industrial Energy Consumers, Sierra Club, Renewable Energy Industries Association of New Mexico, Western Resource Advocates, Coalition for Clean Affordable Energy, and Wal-Mart Stores East, LP and Sam's East. The City of Albuquerque filed a separate acceptance. The Acceptance of Modification by the intervenors would leave intact the reduction of $9.1 million ordered by the Commission last week, resulting in a slightly less than 1% increase in consumers electric bills each of the next two years.
The NM Public Regulation Commission addressed the filings at their open meeting on Wednesday, January 17, 2018. On a vote of 3-2, the Commission agreed to accept a reduction of $4.4 million proposed by PNM, but denied PNM's clause concerning a cross-appeal and gave all parties until noon on Friday to accept the additional modification.
Even though the PRC and New Mexico law encourages stipulations, a major issue throughout the proceeding was the inherent challenge of having multiple parties work on a rate case stipulation and still meeting the statutory mandate to complete a contested stipulation within the 9 month (can be extended to 12 month) statutory mandate and still allow time in the event that a stipulation could not be reached.
In addition, in this particular case, the insistence of intervenors to include provisions in the negotiated stipulation in anticipation of federal/state tax means that customers will see an immediate benefit from the changes in the federal tax laws.
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