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PNM Buying Stock, Rate Cut Rejected

PNM Buying Stock, Rate Cut Rejected

Public Service Co. of New Mexico (PNM) said it embarked on a $17.3 million stock repurchase plan Tuesday after announcing the New Mexico Supreme Court rejected a $112 million rate cut imposed by the state's outgoing Public Utility Commission (PUC) late last year.

PNM, which serves 1.3 million gas and electric customers in New Mexico, said it will buy back about one million of its shares at Tuesday's closing price of $17.31 per share. The utility is to resume discussions with the New Mexico attorney general and other parties in an attempt to reach a negotiated settlement of its rate case. PNM stock closed up 7/16 Wednesday at 17 3/4. Volume was nearly four times average with 705,700 shares traded. The stock's 52-week range is 14 13/16 to 24 3/4.

The Supreme Court found the PUC decision "so ambiguous that it falls short of that standard of clarity that administrative orders must exhibit." The court directed the newly elected New Mexico Public Regulation Commission (PRC), which has replaced the PUC, to reconsider the rate case.

The rate case order was the second PUC ruling the state Supreme Court has overturned in recent weeks. March 1 the court vacated a PUC order giving a new company, Residential Electric Inc., permission to compete for retail customers in PNM's service territory. In that case the court found that the PUC exceeded its authority in an attempt "to carry out broad changes in public policy by replacing regulation under the 'just and reasonable' standard with competition in an open marketplace."

PNM also said the Federal Energy Regulatory Commission (FERC) dismissed two of four complaints against PNM filed by San Diego Gas and Electric (SDG&E) regarding a 100 MW wholesale power contract between the two utilities. The remaining two SDG&E complaints have been consolidated and remain pending before the Commission.

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