Mar. 5—New Mexico Gas Co. has agreed to a settlement in its latest rate case that would lead to smaller increases in monthly bills than the company had proposed and changes in the way it notifies customers of rate hike requests.
A stipulation agreement outlining the result of recent confidential negotiations between the utility — New Mexico's largest natural gas provider — and groups that argued it was misleading customers about the potential effects of new rates — was filed Friday with the state Public Regulation Commission. The deal, also signed by the New Mexico Department of Justice, would cut the proposed increase in revenues the utility would collect by almost $20 million, or about 39%.
It also would prevent the utility from collecting $7 million to $10 million from customers tied to its effort to gain approval to build a liquefied natural gas storage facility in Rio Rancho. Costs for the facility — a project that has faced opposition and recently received a recommendation for denial by a PRC hearing officer — would be covered instead by New Mexico Gas shareholders.
Mariel Nanasi, executive director of Santa Fe-based New Energy Economy, called the settlement "a win for ratepayers," noting the agreement would freeze monthly residential access fees at $12.40 — instead of the requested increase to $15.50. An increase to the fixed access fees would represent a higher monthly burden for the poorest of the utility's residential customers, she said.
The new rates are set to go into effect in October if the commission approves the settlement.
Last fall, less than a year after higher gas service rates took effect, the utility filed a new request for increases with the PRC. It sent a mailer to customers in November 2023 alerting them of a proposed hike it estimated would lead to an increase of $6.71, or 11.2%, in their monthly bills.
But some consumer and energy advocacy groups questioned the company's math.
New Energy Economy called the notice "seriously misleading" in testimony filed in the rate case and claimed a different calculation showed the increase would be about 16%.
New Mexico Gas maintains it followed protocols set by the commission and its notices were not misleading.
Company spokesman Tim Korte on Tuesday said average monthly residential bills would increase about 7.1% instead of 11.2% under the agreement.
"If the proposed settlement is approved as filed, the summer bill impact average is an increase of 6.3% while the winter bill impact average is 7.3%," Korte wrote in an email. "For a customer on budget billing who uses an average 53 therms per month, this would mean an increase of about $4.21 per month."