PNM, or Public Service Company of New Mexico, has asked stateregulators to accept a negotiated settlement raising rates 3.7% forresidential customers and 7% for larger customers and resolving ayears-long dispute that has wound its way through two regulatorycommissions and the state supreme court.

If approved by the New Mexico Public Regulation Commission(PRC), it will be PNM’s first gas rate increase since the early1980s. The stipulated settlement worked out between the company andthe commission staff, would add about $1.2 million to PNM revenuesin the final quarter of 2000, $4.7 million in 2001, and $3.9million in 2002.

The agreement resolves two cases originally decided by a formerregulatory commission, appealed to the state Supreme Court, andremanded to the PRC by the court earlier this year, (see Daily GPI, April 27).

Industrial customers, U.S. executive agencies and the city ofAlbuquerque have opposed the allocation of the rate increase,saying they will be subsidizing residential customers. PNM says theallocation issue should be reserved for a new rate case it haspledged to file next year.

Upon approval, PNM will reverse certain reserves for costsrecovered in the settlement that were recorded against earnings atthe time of the original regulatory orders, resulting in a one-timegain of $5.4 million, or 8 cents per share. That amount will becollected from customers in rates over the next 13 years.

Hearings on the proposed settlement are scheduled to beginAugust 14. The commission has previously said it expects to issue afinal decision on the two gas rate cases by the end of September.

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