Gas rates may go up in 2021, depending on PRC decision

In this file photo, Michael Baca, Master Service Technician with the New Mexico Gas Company checks the dials on the front of a gas meter that he just checked for pressure at the companies training site in Albuquerque. JIM THOMPSON/JOURNAL FILE

New Mexico Gas Company filed a $13.23 million future-test-year rate case on Dec. 23 to recover significant capital investments made by NMGC between September 2017 and the end of 2021.

NMGC anticipates a decision on this request by the New Mexico Public Regulation Commission in the fall of 2020.

If this request is approved:

• New rates will go into effect in January 2021.

• NMGC will continue to charge its customers for the cost of the services it provides in delivering gas. The cost of the gas itself will continue to appear on the bill as a pass-through to customers without markup by NMGC.

• An average residential bill of 50 therms will increase by approximately $1.71 from $40.61 to $42.32, a 4.2 percent bill increase. Included in this will be an increase in the residential customer access fee from $11.65 to $12.70.

• Over the years, NMGC has worked to contain its operating expenses while maintaining excellent service levels, and as a result, operations and maintenance cost increases make up only a small part of the revenue request in this rate case.

“Even with the proposed increase, NMGC residential bills will remain among the lowest in the region and have increased, on average, only 1.95 percent annually since 2009,” NMGC President Ryan Shell said.

Key drivers for the requested rate increase are the recovery of capital investments the company has made and will make including, among other things:

• The Santa Fe Mainline Project, which will supplement the existing mainline from Bernalillo to Santa Fe to enhance the reliability of natural gas service to communities in north-central New Mexico.

• A pipeline project in the Permian Basin that will enhance the supply of natural gas to the system, facilitate the beneficial use of natural gas in the state, and help alleviate the need to flare or vent natural gas during its production.

• Investment in information technology and telecommunication projects and programs to enhance NMGC’s computer system reliability with an emphasis in cyber-security and business functionality.

• Investment in ongoing smaller capital projects across New Mexico that enhance and improve the integrity, safety, and reliability of the pipeline system.

• The acquisition of NMGC’s current headquarters building in Albuquerque, which has been leased for the past 10 years and recently became available for purchase.

• Investment in initiatives aimed at reducing greenhouse gas emissions associated with the system. These initiatives include investment in compressed natural gas (CNG) stations to serve governmental and business transportation needs, investment in solar at NMGC-owned facilities throughout the state, and repair and replacement programs on pipelines and related facilities.

“Through these environmental initiatives, New Mexico Gas Company is proud to partner in New Mexico’s wider efforts to reduce GHG emissions,” Shell said.

Lastly, NMGC is proposing some modifications to its rate design. Proposed changes include:

• A cost recovery mechanism to facilitate the timely recovery of amounts expended on pipeline integrity, safety and reliability programs and projects.

• A Modified CNG Rate to help develop fueling stations to promote the use of CNG by vehicle fleets throughout the state, such as municipal solid-waste trucks.