by Jeremy Hunt
Daily Lobo
PNM wants to increase its annual rates for electricity by almost 15 percent.
The increase would cost the average household about $80 more per year.
The utility company needs to increase its electric rates because production costs and customer demand have gone up, said Jeff Buell, a spokesman for PNM.
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"The cost of materials - copper, steel, cement - has gone up. These are basic materials for building power plants and energy infrastructure," Buell said. "Not only individual customer demand per household use has gone up, but also the total number of customers and the total demand on the system."
The Public Regulations Commission will decide on the increase after a public hearing in December.
PNM's rates are 29 percent below the regional average and 22 percent below the national average, according to the company's Web site.
"Our proposed increase would still have us at about average or less," Buell said.
The Greater Albuquerque Chamber of Commerce supports the increase, according to a press release from the organization.
PNM proposed the increase to the Public Regulations Commission in February.
Customers including UNM have intervened and argued against the increase.
"This is not unusual for us to do," said Mary Vosevich, director of the Physical Plant Department. "We intervened in the gas case recently, as well."
The University testified to the commission Monday, Vosevich said.
"If it were to go through as proposed, if PNM were successful in everything, it could be as much as $1 million a year," she said. "That's not likely to happen."
She said UNM intervened to ensure it gets the best possible rate.
"Obviously, utilities are expensive for the University," she said. "What we're looking for is a fair rate. We know our rates are going to go up."
She said UNM must be cautious with how much it spends on utilities because it's funded by the state Legislature.
"We're only funded so much through a formula," she said. "Just because PNM increases our rates doesn't mean we're going to get additional funding to pay for the increase."
Buell said PNM decreased its electricity rates four times over the last 20 years.
"We've been able to generate more than our customers have needed," he said. "We liked the idea of trying to take that excess generation capacity and sell it on the general market, and then we've split the revenue with our customers."
The company needs to expand to meet rising energy needs in New Mexico, he said.
"We're now running out of access capacity," he said. "We need to build more infrastructure to meet future demand."
PNM is also proposing a "fuel clause" - an additional charge to compensate for generating and delivering electricity, Buell said.
The charge would depend on how much the cost of fuel goes up, and if it decreases, customers would pay less, he said.
"The cost of generating electricity and delivering to customers changes based on the fuel behind it," he said. "Whether it's coal, natural gas or nuclear - it fluctuates. As it does, we pass that cost through."
Buell said the fuel clause is nothing new for utility companies.
"We do that on the natural gas side already," he said. "All the other investor-owned utilities already have this."
Student Sara Barr said she will be unhappy if her PNM bill goes up.
"I can barely afford utilities as it is," she said. "All I know is I'm barely passing by."
Student Adan Jimenez said electricity is too expensive, but an increase is warranted.
"It makes sense because of the sudden increase in oil prices," he said. "I don't understand why they don't go through and find other sources to provide us with electricity rather than continue to use stuff we already know is diminishing."
