Friday, January 28, 2011

MeanMesaTestifies at the PNM Rate Hike Hearing

Four Corners Coal Fired Power Plant (image source)
Well, the big day rolled around -- today -- and off we went on our sturdy bicycle to the New Mexico Public Regulation Commission's hearing for the PNM rate hike request.  The meeting was held in the impressive auditorium of of the African American Performing Arts Center on San Pedro.

For MeanMesa visitors from outside the US, a short explanation of the process and its purpose may be in order.  In New Mexico, almost every citizen depends of electrical service for daily living.  Unfettered by public regulation, whatever corporation able to "corner the market" would enjoy what we consider to be a monopoly, allowing it to basically charge any price it liked.

On the other hand, the scope of the task of providing electricity, for example, is one for which the size of the provider determines the efficiency and cost effectiveness of the service, factors which would normally suggest that a giant monopoly would actually be a good choice.  The idea of a publicly regulated utility represents the  "mix" between the alternatives basically allowing the corporation to "act like" a monopoly, but just not an entirely out of control , "Robber Baron style" monopoly, and, instead, a monopoly which must answer to public control.

The various participants in the main discussion by the Commission are called "interveners."  In this case, PNM was the primary "intervener" in favor of the rate hike.  Opposing "interveners" included a number of entities, mostly represented by attorneys.  Because it was a public hearing, citizens were allowed to express their own views of the rate hikes after the primary interveners were finished.

As hearings go, although the session presented all the predictable elements, it also included a few unexpected turns as well.  The Commissioners of the New Mexico Public Regulation Commission (NMPRC) provided a fifteen minute opportunity for PNM, the electric utility requesting the rate increase -- apparently the fourth in the last five or six years -- to state its case.  Notable in that presentation was the figure describing the amount of extra revenue PNM wanted to raise by increasing the electric rates.

That figure was roughly $150 Mn dollars per year.  The PNM presentation included all sorts of other information regarding the necessity of the increase -- things such as old equipment which needed to be repaired and replaced, a small amount of conversion to "green energy" expenses and a few pension and benefit plans for its employees.

The central counter argument was presented by one of the intervener's attorney immediately following PNM's "moment in the spotlight."  Several other opposing interveners' attorneys presented largely the same objections to the rate increase afterward.  The central intervener was the Albuquerque Water Utility, an entity with "standing" based on the large amount of electricity it consumes.  Others were various other large consumers.

MeanMesa'a Decision

Of course, MeanMesa is not among the Commissioners of the NMPRC who will actually make the decision, but as one of the citizens who testified against the rate hike and a witness to much of what was said at the hearing, there seemed to be a few obvious "points of contention" presented.  Let's take them by the numbers.

1.  The counter parties argued a $90 Mn difference in the amount actually needed to maintain service levels.  PNM had argued $150 Mn.  The Water Utility argued around $45 Mn and other opposing parties generally agreed with them.

2.  Everyone, including the PNM spokesman, agreed that the local economy sucked.  Testimony varied as to whether it was bad enough to delay the PNM expansion plans and their associated costs.

3.  The "green energy" folks (there were several) argued that PNM was manipulating the arrangement with people wishing to generate their own electricity through solar panels, etc. in a way which would discourage that effort.

4.  The citizens unanimously complained that the rate increase would amount to a serious hardship economically.  Those on fixed incomes may have been the most vociferous, followed by those with electric heat, but all the private citizens were strongly opposed.

MeanMesa's testimony followed these common reservations except with a few added comments.

1.MeanMesa emphasized that a rate hike would further "hollow out" the local economy by further reducing the amount of money in local, everyday activity.

2.MeanMesa emphasized that the $90 Mn difference between the opposing valuations of the work planned by PNM was, indeed, a serious difference -- one which had to be at least somewhat reconciled before the plan advanced.

3.MeanMesa emphasized that the timing of the plan sucked just as bad as the  present economy sucked.

4.MeanMesa emphasized that PNM needed to put together a far more persuasive "story" to justify either the plan's timing or its expense or both.

Although MeanMesa's opposing testimony was probably not any more convincing than that of the other citizens attending, the exercise was fulfilling.  Paying higher electric rates may not be quite so onerous when we can "justify" ourselves a little by having taken part in the process.  The final decision, still under a cloud of litigation, will not be made for several months.

Finally, a quick note about the facility where the hearings were held.

Although mainly about the hearing itself, this posting may warrant a line or two about the Performing Arts Center, itself.  MeanMesa paid this first visit to the free museum where both African American art and history are on display in a quiet, dignified gallery.  Inside were all sorts of unexpected things, most notably for MeanMesa, photographs of the New Mexican, self-described,  "exclusive Negro" communities of Blackdom and later, Vados.

The museum displays relics and photos of this fascinating story of the days when the ink on the 14th Amendment was still fresh, the South was full of Jim Crow and the Homestead Act promised Black farmers a new start in New Mexico.  MeanMesa's visit was a well suited and appreciated prelude to the modern, corporate theater ready to unfold later in the hearing.  Some impressive attributes of the American democracy were showing their face in both.  Interested in the story?  Link here.

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