PRC approves NM Gas Co. rate increase agreement – NM Political Report

The New Mexico Public Regulation Commission approved a stipulated agreement which is expected to result in a rate increase for customers.  The stipulated agreement is between New Mexico Gas Company and various consumer and environmental advocates. The gas utility initially asked for the ability to collect nearly $49 million in additional revenue from customers. The […]

The New Mexico Public Regulation Commission approved a stipulated agreement which is expected to result in a rate increase for customers. 

The stipulated agreement is between New Mexico Gas Company and various consumer and environmental advocates. The gas utility initially asked for the ability to collect nearly $49 million in additional revenue from customers. The stipulated agreement reduced that to $30 million.

The rate increase will go into effect in October.

Commissioner James Ellison said he supports the stipulated agreement. He also expressed concerns that this is at least the fourth time in eight years that a rate case involving NM Gas Co. has been resolved through a stipulated agreement.

“I do think it’s also reasonable to ask how many stipulations in a row would we like to see before we’d like to have a litigated case,” he said.

He said the advantages of a stipulation is that it provides a mutually acceptable resolution, especially in cases where there are multiple intervening parties. That makes it unlikely that any party will appeal the ruling.

“But I do think with the litigated case, there is more scrutiny,” he said.

Commission Chairman Patrick O’Connell said he believes there’s value in both litigated cases and in stipulated agreements.

“If you just settle, settle, settle, who knows what’s buried in the trajectory there,” he said.

He said the best way to learn all the details is to have the transparency that a litigated process brings.

“Having said that, I think probably, if we have concerns about that, I think we’ll want to somehow signal that ahead of when they file their next case,” O’Connell said.

Ellison said that NM Gas Co. has indicated that the lower increase in revenue will mean that some of the projects it is undertaking, such as replacing meters, will be done more slowly. However, he said, the utility is not canceling any projects required for pipeline safety or compliance with federal regulations.

“I do take the company at its word here that they’re going to replace the 90-year-old uncoated steel pipeline first, and if they need to delay something, they’re going to delay projects that are more discretionary like the meter replacements,” he said.

Commissioner Gabriel Aguilera said that there is not 100 percent visibility about which projects will be performed using the $30 million additional revenue and which ones are going to be delayed because of the reduced amount in the stipulated agreement.

“But I received some assurance from the explanation that the projects that are needed for reliability and safety will be the ones that will be pursued here,” he said.

At the same time, Aguilera said that he does not anticipate that the projects NM Gas Co. initially requested money for will go away. He said those projects will now be delayed due to the smaller revenue increase.

“I anticipate that they will be back before us with similar if not the same projects,” he said.