COMMENTARY:
One of the state’s most powerful but least understood boards will soon decide if we will all be paying an additional $40 a month for electricity.
The Public Regulation Commission has received a request by El Paso Electric to increase rates. The proposed increase would come in two phases, EPE’s Jennifer Borden told Fox14. The first will be about $15 a month for the average customer, and the second will be about $25 a month.
The murky process for the PRC to evaluate data and gather public input is expected to take about a year. Opponents of the rate increase, which in the past has included the city of Las Cruces, will have the opportunity to present evidence against it.
I covered rate case hearings when I was reporting from Santa Fe during the Richardson administration. Or, at least I tried to. Pretty much every word was over my head. The details of the case were incredibly complex.
But the basic premise behind ratemaking in New Mexico is both simplistic and outdated. Like so many of our rules, it was designed for life as it was decades ago, when vast swaths of the state did not have service.
To incentivize companies to invest in unserved communities, the state established a cost-of-service model for ratemaking that guarantees they will recoup their investment.
El Paso Electric claims it has made more than $400 million in investments in New Mexico since 2020 for upgrades and new technology. Those investments were necessary to maintain a reliable power grid and reduce the number of outages, it said.
Without the increase, the company says it will have a “base revenue deficiency” of $70.6 million.
The proposed rate hike comes at the same time we’re already dealing with huge increases in the costs for gas, health care, food and housing.
“We know that any increase in monthly bills affects our customers, especially during times of economic uncertainty,” said EPE President and CEO Kelly Tomblin. “However …” You know the rest.
According to public information, the company’s annual revenue is listed at $1.24 billion.
To be fair, El Paso Electric is still required to operate under the state’s new Energy Transition Act, which mandates a switch to zero-carbon electricity by the year 2045. They didn’t get the sweetheart deal that was offered to Project Jupiter for its massive data center in the south county.
Gabriel Aguilera, Greg Nibert and Patrick O’Connell aren’t exactly household names, even among those who follow New Mexico politics, But they are the ones who will decide how much our electric bills will go up.
They were all appointed by the governor to serve on the PRC. Prior to a constitutional amendment in 2020, the PRC had been an elected position. It provided the springboard for Ben Ray Lujan’s ascent to the US Senate.
My theory back then was that an elected board was more skeptical of rate increases because they knew consumers were also voters. But, like many things involving the PRC, I could very well be wrong.
Walter Rubel can be reached at waltrubel@gmail.com
Walt Rubel's opinions are his own and do not necessarily reflect the views of KRWG Public Media or NMSU.