Wholesale supplier to rural companies says it needs to recoup costs
For the second time in two months, the New Mexico Public Regulation Commission has denied an interim rate increase sought by a wholesale electricity supplier.
The commissioners voted 5-0 Wednesday against a rate increase for Tri-State Generation and Transmission Association, which sells power to 12 rural electric cooperatives that serve thousands of customers in New Mexico.
Three of Tri-State’s customers — the electric companies of Continental Divide, Kit Carson and Springer — protested the higher rates. Under New Mexico law, objections by three or more cooperatives trigger the PRC’s authority to decide whether an electricity rate increase is justified.
Tri-State has filed a lawsuit in U.S. District Court challenging the statute that gives the PRC this power. But for the short term at least, the PRC’s ruling against Tri-State has force of law.
“Allowing for (higher) interim rates would increase the burden on customers before those rates have been determined to be reasonable” by a hearing examiner and the commission itself, PRC members said in their order denying Tri-State’s request.
Commissioner Patrick Lyons, R-Clovis, said Tri-State simply did not make its case for an increase. Moments later, the rest of the commission joined with Lyons, pictured above, in rejecting Tri-State’s proposal.
The PRC amplified on Lyons’ points in its written order, saying: “Tri-State also claims that interim rates will benefit the non-protesting cooperatives. It has presented no specific facts to support this claim.”
Lee Boughey, a spokesman for Tri-State, said he was disappointed in the PRC’s decision.
“We will review the commission's written order and then determine appropriate next steps,” Boughey said in an email.
Tri-State, he said, saw costs of service increase in the last year and needs a higher rate to recover its expenses.
“As a not-for-profit cooperative, Tri-State must pass its cost to serve to its members.
Based on average member wholesale rates, the 2013 cost of service results in an average 4.9 percent wholesale rate increase to Tri-State’s members,” Boughey said.
Tri-State’s clients across New Mexico include cooperatives headquartered in Deming, Cloudcroft and Elephant Butte.
PRC members first rejected Tri-State’s interim rate request in March. They reconsidered the proposal at Tri-State’s request.