New rates, approved by the New Mexico Public Regulation Commission (NMPRC) for customers in El Paso Electric’s (EPE) New Mexico service territory, will become effective Friday, July 1. Residential customers using an average of 660 kilowatt-hours per month in New Mexico will see an average bill increase of approximately $0.89 per month.
Additionally, the NMPRC also ordered the separation of fuel costs from the base rate. All fuel costs will be reflected in the Fuel and Purchased Power Cost Adjustment line item in bills. Historically, in New Mexico, the base rate contained both the energy charge and fuel costs. Customers can expect to see the change in rates and the separation of fuel costs in their electric bills as early as Tuesday, July 5, 2016.
On May 11, 2015, EPE filed with the NMPRC for an annual increase in non-fuel base rates of approximately $8.6 million or 7.1%. Subsequently, the Company reduced its requested increase in non-fuel base rates to approximately $6.4 million. On February 16, 2016, the Hearing Examiner assigned to the case issued to the NMPRC a Recommended Decision proposing an annual increase in non-fuel base rates of approximately $640 thousand and a return on equity of 9.60%.
On June 8, 2016, the New Mexico Public Regulation Commission (NMPRC) voted to approve an approximate $1.1 million increase in non-fuel base rates in El Paso Electric Company’s (EPE) pending New Mexico rate case. The June 8 decision by the NMPRC deviated from the Hearing Examiner’s Recommended Decision by increasing the annual revenue by approximately $460,000 but lowering the return on equity to 9.48%.
“Although we disagree with the outcome of the New Mexico rate case, in particular the return on equity, we remain committed to providing all of our customers with safe, reliable and cost-effective energy,” said Mary Kipp, El Paso Electric CEO. “We will continue to take the necessary steps to ensure that the Company maintains financial strength and stability while still meeting the growing and changing needs of our customers.”
El Paso Electric reports it anticipates filing a new rate case in New Mexico in early 2017.
“The next rate case will be necessary to seek recovery of the costs associated with new generating units, Montana Power Station Units 3 and 4, transmission and distribution infrastructure, as well as request a fair return on equity,” the company states in a release.