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Las Cruces Utilities Board Reviews Natural Gas Rate Recommendation

Sep 28, 2021

The Las Cruces Utilities Board is considering a natural gas rate increase after unanimously accepting a recommendation from the Utility Customer Advisory Group for review. Rate and Economic Analysis Manager Domonique Rodriguez reviewed how the increase will impact natural gas customers.

“The UCAG is recommending to the utilities board an alternative phased-in approach over all customer classes where year one would increase by 20%,” Rodriguez said. “This would mitigate the cost-of-service increase while businesses recover, where year two and year three would have a 40% implementation.”

Many members of the public voiced concern over the proposed increase—of the public responses received by the Utility Customer Advisory Group, 21 requested no increase while 10 requested a full phased-in option.

Members of the public also expressed issue with expanding natural gas lines to the Talavera Subdivision. While Talavera residents themselves will be ultimately responsible for the cost of installation within the subdivision, Las Cruces Utilities is also planning the installation of a high-pressure line to help with capacity and pressure needs for the entire city. 

The proposed Talavera expansion is something Richard Griffin, who spoke on behalf of the New Mexico Propane Gas Association, is against.

“It allows a utility to expand into an area where it has no standalone economic justification for doing so,” Griffin said. “And really, what that means is that if the houses are too far apart, it just costs too much to run the gas line, and it doesn't make sense to do that.”

Historically, the Las Cruces City Council has advocated for a transition away from natural gas—passing a Climate Action Plan in October of 2020 and a resolution in April of 2021 calling for an energy transition plan.

Las Cruces Utilities Director Delilah Walsh says that while staff is working to budget for the energy transition plan, the current system still needs to be maintained and staffing shortages need to be addressed.

“Essentially the rate review is covering the current demand to maintain the system as it exists today. So no matter what, we have to deliver a safe reliable system,” Walsh said. “Our energy transition plan…that's going to take a couple of years. We're working with our sustainability officer to identify consultants. That's not going to happen tomorrow.”

While Commissioner Johana Bencomo, who also sits on the Las Cruces City Council, voted to receive the recommendation for review, she says she does not support the final recommendation from the Utility Customer Advisory Group.

“I think where I feel tension with that is that yes, I accept the work that the UCAG did,” Bencomo said. “They did a lot of incredible work in ensuring they reached out to as many customers as possible. Where I have some tension is their final recommendation, where I don’t agree with that or accept the final recommendation.”

Both Bencomo and Commissioner Gill Sorg, who represents District 5 on the city council in addition to his duties on the utilities board, advocated for an additional work session to review the proposed rate increase. Sorg says the board needs to thoroughly review each individual improvement.

“I would like to see us go line by line through all of the capital improvement projects and show us where they are and why they're needed or not needed,” Sorg said.

The board is expected to meet for a work session in October to review the recommendations.