Public Service Company of New Mexico has settled on a lower rate increase than what the company requested from state regulators earlier this year.
If approved, the settlement would increase average monthly residential electric bills for PNM customers by $9.79 by 2026, down from the more than $23 the utility initially requested. The increase would take place over two phases, with an average increase of $2.79 in July and $7 in April 2026.
The settlement would grant PNM an increase of $105 million in annual revenue, as opposed to the $174.5 million PNM requested in its initial rate increase application in June. The settlement would also grant an increase to the utility’s return on equity — which guarantees a higher rate of profit for shareholders — from the current 9.26% to 9.45%.
A settlement agreement signed by the utility and by more than a dozen parties — including environmental advocates, trade groups and the state Department of Justice — was filed Tuesday with the New Mexico Public Regulation Commission. The agreement will require consideration and approval by commissioners before the company can change rates.
PNM spokesperson Jeff Buell said the company is “grateful for the hard work by parties to our rate review to find common ground and reach an unopposed stipulated agreement.â€
He said the agreement “supports ongoing reliable service, security, wildfire risk management, and new energy resources necessary to continue transitioning to a zero-carbon future.â€
The agreement also requires PNM to make a shareholder-funded contribution of $1.5 million to the utility’s Good Neighbor Fund, which provides bill assistance to some customers.
The settlement was signed by staff from the Public Regulation Commission and state Department of Justice as well as several renewable energy trade groups and advocacy groups New Energy Economy and Western Resource Advocates.
The agreement reduces the cost burden on residential and small commercial ratepayers and includes terms related to the Four Corners Power Plant near Farmington, AnnaLinden Weller, a spokesperson for Western Resource Advocates, said in a statement.
“We secured commitments that the utility will inform the Public Regulation Commission about any changes to their scheduled disinvolvement†in the coal-fired plant, which is also called Four Corners Generating Station, Weller wrote.
The commission also agreed to hold wildfire mitigation workshops in 2025 to better prepare to handle the deadliest consequences of climate change, she wrote.
The agreement states PNM will maintain the currently approved depreciation rates for Four Corners Power Plant — instead of accelerated depreciation as the utility requested — and it states PNM “will make informational filings on any new amendments to the Four Corners Power Plant coal supply, co-tenancy and operating agreements.â€
A January ruling from commissioners on the utility’s most recent case resulted in lower average monthly bills for residential customers, partly due to regulators slashing some costs associated with investments in Four Corners and other generation projects. Several appeals to that ruling remain pending in the state Supreme Court.
