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Thursday, July 17, 2008

Regulator Says CNME Refunds May Be Illegal

By Lee Ross
Mountain View Telegraph
      Central New Mexico Electric Cooperative may have been unfairly given some customers their money back.
    "In a general way, it's fair to say there were some irregularities and there were some mistakes that were identified," said Roy Stephenson, on staff for the Public Regulation Commission as director of the utility division.
    In sworn testimony by PRC staff Utility Economist Anthony Sisneros on Tuesday, he said refunds to six customers from November 2006 to August 2007 in the amount of about $4,756 may have been illegal.
    That's because, if they were in fact refunded part of their rates, the customers of the publicly held utility were receiving unapproved electric rates, which may be a kind of preferential treatment.
    In 2005, some customers were sold specialized heating units to reduce their bills along with what seemed like the co-op's pledge not to raise its rates for electricity over those of Tri-State Generation and Transmission Association of Colorado, the company the co-op buys power from.
    In the bills, it appeared that the co-op was overcharging those customers, violating the agreement, so the refunds were made.
    Denny Snyder was one of those "overcharged" by the company.
    He said as much at a poorly attended hearing in Moriarty on July 9.
    The hearing was the second opportunity for the public to comment on an investigation into CNME's Advice Notice 54, a proposal by CNME to cancel a commercial time-of-use rate. The public could also comment on an investigation into Rate 25, a residential time-of-use rate. Attended by about 40 people, including CNME staff and staff and commissioners from the PRC, there were hundreds of empty chairs at the hearing.
    "There were refunds made," Snyder said at the hearing, "The refunds were only made to the people who knew what was going on … There's a bunch of customers out there who deserve a refund."
    Instead of more refunds, as Snyder suggested, one possibility is that those who were given refunds be asked to pay the money back over a year's time, according to a remedy suggested in Sisneros' testimony.
    CNME General Manager and CEO John Wheeler said he couldn't go into much detail about the case, but said the co-op may have its own remedy for the situation by Aug. 1. He also suggested the refunds may not even fall under PRC jurisdiction.
    "To us, that was a contract settlement. It was not a rate issue," he said.
    Stephenson agreed that if it is determined to be a contract settlement, the refund is not an issue for the PRC to decide.
    "Then it's a management decision and maybe the other co-op members don't think it's a real smart one, but ..." Stephenson said. "The jurisdiction of the PRC is over rates and service provided."
    The service provided by the co-op has had a few detractors lately, many of whom let that be known at the July 9 public hearing.
    Santos Tapia, who owns Shorty's BBQ, mentioned concerns about the co-op's customer service.
    He asked why meetings were held in Estancia rather than Moriarty, where many of the customers live and where the co-op's new building is located. He also asked why the cooperative's rate changes weren't announced in letters sent out with the bills.
    "This little stuff, it is a big deal," he said.
    Tapia said his own customer service is suffering because of his electric bills. After his bill tripled last year, he said he has gotten get rid of the refrigerated air for his restaurant.
    Others mentioned customers' level of distrust toward the cooperative and even questioned Wheeler's salary.
    Wheeler responded that he is paid about $25,000 less than a someone in his position at a comparable cooperative.
    "As far as my wages, I think I'm underpaid," he said.
   

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