June 14 – With an appeal in a rate case pending before the state Supreme Court, Public Service Company of New Mexico seeks approval from the three-member Public Regulation Commission to raise electricity costs again.
PNM, New Mexico’s largest electric utility, said in its request, filed Friday with the commission, that the $174.3 million that would be generated by the increase is needed to replace and upgrade aging equipment and facilities amid a continued shift to carbon-free energy, and to ensure PNM can maintain a “safe, reliable and resilient system.”
The proposed increase is expected to increase the average monthly residential bill by more than 26%.
“This is going to be an important question,” PNM spokesman Ray Sandoval said in an interview Friday.
The utility is proposing to implement the increase in two phases, with about half taking effect in July 2025 and the remainder in January 2026.
The average residential customer uses 600 kilowatt hours, Sandoval said, which costs just over $88 per month. That bill would increase by $11.12 in July 2025 and another $12.48 in January 2026, for a total of $23.60.
“We are currently in the process of rebuilding our electric grid,” Sandoval said, citing new wind projects and the need for “geographical diversity for our solar” to ensure reliable service.
The utility’s previous reliance on coal power in northwestern New Mexico led to a “one-way highway from Farmington to Santa Fe” that is no longer sufficient following the 2022 closure of the San Juan Generating Station and plans to replace nearby Four Corners Power to leave. Plant in 2031, he said.
“There’s a lot of infrastructure that needs to be built and maintained,” Sandoval said.
While residential energy cost estimates can vary widely depending on the source, PNM provided data from the U.S. Energy Information Administration showing that the average cost of $111.32 for a residential customer after the increase, if approved, would be below state average of $128.58 and national average of $138.66.
Meanwhile, the Public Regulation Commission’s decision in PNM’s latest interest case faces a challenge in the Supreme Court.
PNM last submitted a request in the fall of 2022. The committee in January approved a much smaller increase than the company had requested.
PNM appealed the decision, seeking a reversal of regulators’ demand that the utility repay $38 million to customers tied to expired nuclear leases at Arizona’s Palo Verde Generating Station and changes to its capital structure Company.
Santa Fe-based advocacy group New Energy Economy also appealed the January rate increase, but for a different reason: The group argued that state regulators approved unfair rate increases that allowed PNM “unjustified profits” at the expense of ratepayers.
Sandoval outlined the main drivers behind the interest rate increase request:
* $73.9 million for investments in electricity distribution, transmission and generation infrastructure.
* $37.2 million for solar battery storage agreements.
* $34 million for capital costs, such as higher interest rates on debt.
* $19.8 million tied to the closure of the Four Corners coal plant.
* $12.6 million in wildfire mitigation and protection efforts.
PNM uses drones and helicopters to spot problems, and has replaced and moved poles and pruned trees to prevent a downed line from starting a wildfire, Sandoval said.
He noted that increased revenue from increased load on the system, primarily due to some customer base growth and warmer summers — prompting the use of more air conditioners — would offset cost increases by $3.2 million.
Cynthia Miller of The New Mexican contributed to this report.
This is a development story. Check back for more details.
