This content originally appeared at the NM Political Report, a non-profit news outlet covering state politics and news. It is republished here with permission as a part of our commitment to bring readers the best in independent local news (even if we don’t write it).
Customers of New Mexico’s largest electric utility may pay more for energy in the future.
The Public Service Company of New Mexico filed an application with state regulators on Friday proposing a rate increase.
According to the application, if approved, the average residential customer that uses 600 kilowatt hours of electricity would see a $11.12 increase in their monthly bill starting in July 2025. Then there would be another $12.48 increase in that customer’s monthly bill in January 2026.
The proposed rate increase would bring in about $174 million and represents a 23 percent overall system cost increase.
PNM states that this rate increase is needed as the company transitions to increasing amounts of renewable energy.
This proposed rate increase comes on the back of a rate change that went into effect in January of this year. While PNM had requested a rate increase, the New Mexico Public Regulation Commission approved a change in rates that resulted in lower rates for some customers.
In testimony filed along with the application, Henry Monroy, PNM’s vice president of regulatory affairs, said that the company has been replacing aging infrastructure and “building out the grid to accommodate the evolving energy needs of our customers.” He said the changes in rates that went into effect this year don’t “adequately reflect the higher required cost of capital” needed to support PNM’s investments.
PNM states that the current proposal for a rate increase will, in part, cover the costs associated with new energy storage agreements, or batteries, that will be coming online this year and next year. These battery storage facilities are intended to help balance the intermittent nature of new renewable energy projects. According to the application, about $37 million is needed to cover those costs. Another $20 million are to help PNM recover its investments into the Four Corners Power Plant, which is anticipated to close in 2031.
Additionally, PNM says about $74 million would cover capital investments across distribution, transmission and generation and $26 million are needed for operations and maintenance, including wildfire risk mitigation.
The remaining $34 million that PNM says the rate increase would generate would go to “the continued need for an adequate capital structure and return on equity to access capital markets under favorable terms.”
“PNM’s currently-authorized rates are no longer just and reasonable because they do not allow PNM to recover its costs of providing utility service and do not afford PNM the opportunity to earn a reasonable return on investments in public utility plant and property,” the utility states in the application.
The application does not guarantee that the rate increase will occur. PNM must now argue its case for increasing rates. Consumer and environmental advocacy groups are likely to intervene in the case, as was seen during the past rate case.