Nov. 14—A rate increase for New Mexico Gas Co., the largest natural gas utility in the state, is headed to a vote by the state Public Regulation Commission after the agency's staff recommended approval late last week.
The utility company also agreed to put on hold introducing a hydrogen blend to customers until safety studies can be presented for commission approval.
The rate increase of 4.3 percent would add $2.67 to the average customer's monthly bill and bring $19.3 million more in revenue to the company. The change would occur in January 2023 if approved.
Both figures are less than half what New Mexico Gas originally requested in December, when the company filed a request for a rate increase hearing. Commission hearing examiners called the settlement a "significant retreat" from the initial application.
The settlement for the rate case came in May after negotiations with several parties, including the Coalition for Clean Affordable Energy, Western Resource Advocates, the New Mexico attorney general, the New Mexico Affordable Reliable Energy Alliance, New Energy Economy and Los Alamos County.
New Mexico Gas spokesman Tim Korte wrote in an email the hearing examiners' recommendations must go before the commission for discussion, review, approval and entry of a final order.
"We expect this will occur at a PRC Open Meeting over the next few weeks," he wrote, adding the company expects new rates to be effective Jan. 1.
The Sierra Club's Rio Grande Chapter noted in a news release several other concessions made by New Mexico Gas in the May stipulation, including an agreement to pay for the first phase of a trial program for hydrogen blending out of shareholder funds instead of increased customer rates.
"Under the settlement, customers won't foot the bill for a hydrogen pilot project that would have increased climate pollution and put air quality at risk," Coalition for Clean Affordable Energy attorney Sara Gersen said. "Without the distraction of this hydrogen pilot project, New Mexico's leaders should tackle climate and air pollution by helping customers upgrade to zero-emission electric appliances and quit burning fossil fuels in their homes and businesses."
The company originally planned for a second phase of the program in which it introduced a mix of 95 percent methane natural gas and 5 percent hydrogen "into an isolated segment of NMGC's system that actually serves customers," the stipulation states, but that will now be postponed until the company presents the results of tests on air quality, safety and equipment.