Guv wants action on PNM
Gov. Bill Richardson said on Friday that he’s concerned about the financial health of Public Service
Company of New Mexico, after Moodys Investors Service downgraded the company’s credit rating.
Moody’s cited the New Mexico Public Regulation Commission’s decision this week to grant Albuquerque based PNM a 6 percent, or $34 million, rate increase. The company had asked regulators for more
than double that - a $76 million increase.
The PRC’s decision will mean a roughly 6 percent increase for each ratepayer’s bill, the Albuquerque Journal reported Friday.
PNM Chairman, President and CEO Jeff Sterba said in a statement that the increase was welcome but "does not restore financial health," the paper reported.
PNM’s request that it be allowed to pass along fuel cost adjustments to customers is still pending
with the PRC. Sterba called the fuel cost request "critical" to restoring financial health, and
Richardson on Friday called for "quick action" on the request. A hearing on the fuel adjustment
clause has been scheduled for May 15.
“The PRC made an effort to address PNM’s request for a rate increase. However, without quick
action on fuel costs, PNM faces an uncertain financial future that could have serious consequences
to ratepayers,” Richardson said in a written statement.
In a news release announcing the downgrade, Moody’s said that PNM’s financial profile has
deteriorated over the past several years due to increased fuel costs, purchased power,
higher operating and interest expenses, poor operating performance at the company’s core
base load facilities, and significantly increased capital expenditures during a period when its rates
have actually declined.
Moody’s anticipates that PNM’s financial profile will continue to deteriorate over the near-to-medium term, but could improve if the PRC allows PNM to use a fuel adjustment clause, the release states.
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