Zia Natural Gas Co. asks for emergency rate increase to offset winter storm

The Zia Natural Gas Company has applied to the New Mexico Public Regulation Commission (NMPRC) for an emergency authorization to increase its rates after May 1.

Zia says it is paying for a spike in natural gas prices – “an extreme pricing event” – resulting from the winter storm and freeze that hit Texas and the Southwest in mid-February.

Under the proposed rate increase, Zia customers in Doña Ana County – estimated at about 13,300 – would pay 24 percent more a month – from an average gas bill of $39.62 to $48.94, according to estimates provided by the company to the Las Cruces Bulletin.

The cost of purchasing and transporting gas to Zia’s system is passed directly on to the consumer under what is called the Gas Cost Factor.

Because of the winter storm, Zia says the cost of transporting gas to customers in Doña Ana County increased from $0.2749/ccf to $0.4731/ccf.

A regulated utility is not allowed to make or lose money on the cost of gas, according to a release issued by Zia.

Zia provides natural gas to about 40,000 customers throughout New Mexico. The cold February weather that hit Texas, New Mexico and the Southwest “sent temperatures plummeting and energy usage skyrocketing,” Zia said in its release.

As a result, wholesale natural gas prices, which are unregulated, “rose astronomically,” Zia officials said in their media release.

Zia estimates it spent nearly $19.6 million in February to purchase and transport gas to its system, including fees. Zia estimates that it pays $1.9 million during a “normal” February. That translates to an “extraordinary” extra cost of $17.7 million.

To put that into context, Zia spent $10 million last year for its entire gas purchase for the year, the company said.

“Due to the major financial impact of this unprecedented price spike on the business, Zia had to immediately file for approval by the NMPRC to begin recovering the costs from customers,” the company said in its media release.

Zia is asking the NMPRC to spread the costs for that 7-day period of higher costs out over a 17-month period, instead of its normal 12 months.

Zia said it paid its gas supply bills to ensure it was continuing its ability to serve and supply its customers but has “protested the extraordinary costs and is cooperating with the New Mexico attorney general’s and the NMPRC’s investigations into the market pricing event,” the release stated.

If those investigations result in Zia getting a settlement or a refund, that amount would also be refunded back to its customers, the company said.

For Zia customers who need help with winter heating bills, assistance is available through the Low-Income Home Energy Assistance Program (LIHEAP) at 575-524-6500 or 575-882-5781.

In addition, a new pandemic relief program is now available through the county’s Emergency Rental Assistance Program at donaanacounty.org/rent-utilities-assistance.