PNM Buying Stock, Rate Cut Rejected
Public Service Co. of New Mexico (PNM) said it embarked on a
$17.3 million stock repurchase plan last week 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
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 following the
announcements 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
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.
Joe Fisher, Houston
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