The New Mexico Public Regulation Commission on Tuesday unanimously approved a $22 million revenue increase for PNM Resources gas utility, with the business rate increase to take effect immediately. The utility serves about 450,000 residential and business natural gas customers in the state.

The commission’s final order accepts a compromise agreement negotiated in December by the company, commission staff and the industrial customer group. All parties to the rate proceeding have indicated they would not appeal the order.

The settlement provides for a $20 million increase in gas rates and a $2 million increase in other service fees and charges. The new rates offer the company the opportunity to earn a 10.25% return on equity in its gas utility operations. Assuming normal weather, the company estimates that two-thirds of the rate increase will be realized in 2004 earnings.

Because of concerns regarding the impact of higher rates during the current winter heating season, the negotiated settlement postpones the start of the residential portion of the rate increase until April 2004, while business customers will see an immediate rate hike. The residential customers will account for about 82% of the total rate increase on an annualized basis, with the remaining 18% from business customers.

“The commission’s action in our gas rate case resolves one of the main uncertainties affecting PNM this year,” said Jeff Sterba, PNM’s CEO. “With electric rates set through 2007, we now have a known rate path on both the gas and electric sides of our utility business.”

Based in Albuquerque, the energy holding company is the principal subsidiary of PNM Resources. Along with its gas customers, it also serves 390,000 electric customers in New Mexico.

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.