Jan. 9—As Public Service Company of New Mexico's half-million customers await numbers to explain how state regulators' recent decision in a complex rate case will affect their monthly bills, one thing is certain: The electric utility already has its sights set on another rate hike.
PNM, the state's largest electric utility, announced it would request another rate increase this year, to take effect sometime in 2025.
In a recent news release following a ruling from the New Mexico Public Regulation Commission, the company's executives announced they were evaluating options for their next steps, which might include appealing some aspects of the PRC's decision.
The coming rate case "should be a much simpler one," focused on renewable energy investments, PNM spokesman Ray Sandoval said in an interview.
State regulators ruled on the utility's 2022 rate case Jan. 3, denying many of PNM's requests to recoup controversial investments and tweaking the rate design among different classes of customers. The exact effects for various ratepayers are not yet certain.
The result of the case was a disappointment for PNM, Sandoval said, adding the company held costs down during the coronavirus pandemic and during the subsequent period of inflation. The 2022 rate case was the first the company had filed since 2016.
The PRC's decision came just after another blow to the utility: Connecticut-based power company Avangrid announced it was terminating its plans for a long-sought merger with PNM.
Avangrid and PNM had an appeal pending in the state Supreme Court of previous PRC members' rejection of the merger request. The companies had hoped the effort would move forward under an overhauled commission that took office last year.
A new rate case for PNM would "be driven by renewables," Sandoval said, seeking to cover investments in battery storage, solar power and new transmission lines.
"In order for us to do this transition and do it right, you have to invest in capital," Sandoval said, adding the utility plans to be 70% carbon-free by the end of the year. "As we're looking at 2025, the investments we're going to be making in the grid are going to be yet again substantial."
The company's plan to take another whack at a rate increase comes after scrutiny of years of investments by environmental and consumer advocates who have claimed the utility has over-earned, particularly on its assets related to coal energy.
The company was approved to recover $15.3 million more in electricity rates in 2024, a ruling that came in nearly $50 million less than PNM's request. A staff recommendation from the Public Regulation Commission in December had proposed allowing the utility to recover only $6.1 million more, which would have resulted in a decrease in average monthly residential electric bills.