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Thursday, February 7, 2008

PRC Orders CNME Inquiry

By Laura Nesbitt
Mountain View Telegraph
    The state Public Regulation Commission has ordered an investigation of the way Central New Mexico Electric Cooperative has set its rates in the past.
    In addition, the commission has suspended a new rate structure that would have allowed fewer hours of off-peak rates.
    It took the PRC about 15 minutes Jan. 31 to unanimously agree on two separate orders regarding electricity rate changes by CNME.
    The commission had discussed the matter Jan. 24 and Jan. 29 at length and listened to several complaints by customers.
    The first PRC order is a suspension of Advice Notice 55 effective as of Feb. 3 concerning CNME's Rate 25.
    According to state laws, rates proposed by a cooperative must be filed with the PRC in the form of an advice notice.
    Rate 25 was a planned reduction by the electric co-op of off-peak hours in its time-of-use rate to 13 every day during the winter, down from 16 hours a day.
    According to the PRC order, CNME stated in a notice to customers that the changes it proposed would coincide with on-peak and off-peak hours of its power supplier Tri-State Generation and Transmission Association of Colorado.
    CNME stated that it had 736 members under Rate 25 and there were 13 protests filed on or before the deadline, "which is approximately 1.7 percent," the order states.
    According to the first order, the PRC will examine several issues, including the reasonableness of the rate increases, a request that the electric thermal storage be programmed by the customer, and how much changes in the way Tri-State charges CNME are reflected in charges CNME passes on to its customers, Robert Hirasuna, PRC general counsel, confirmed in an e-mail.
    An ETS unit is a special metered device with a timer installed at the customer's location that implements the time-of-use rate.
    The second order by the PRC begins two investigations, the first into Advice Notice 54, a proposal by CNME to cancel Rate 29, a commercial service time-of-use rate. The second investigation is into Rate 25, a residential service time-of-use rate.
    According to the second order, the PRC will investigate several matters, including whether information from CNME was misleading or insufficient to customers, whether CNME advised customers that one rate would be replaced with another, causing customers not to file a protest, and whether CNME violated rules by giving refunds only to certain customers, Hirasuna confirmed in an e-mail.
    On Jan. 24, Brent Perkins, co-owner with his wife of the Furniture Connection that has locations in Edgewood and Albuquerque, handed commissioners copies of bills from both stores from both CNME and Public Service Company of New Mexico.
    "I'm being charged almost $1,000 more a month by being on CNME than I would be if I was on PNM. I checked with other co-ops in the state," Perkins said. "They don't have the demand charge that I'm being hit with from CNME."
    According to Perkins, the CNME demand charge for his Edgewood store last May was $798.75, while the PNM demand charge for the same time period was $6.77.
    On Jan. 31, Denny Snyder, a CNME customer from Edgewood, handed a document to commissioners that he said came from "CNME management at their office in Moriarty."
    "This acknowledges what I've said all along. It should never have happened. It did happen," Snyder told commissioners.
    Snyder was referring to an increase in 2005 by CNME that raised the off-peak rate for ETS customers by 46.7 percent— an increase that Snyder said CNME realized later should have only been 13.8 percent.
    In a telephone interview Tuesday, Snyder said the CNME information he gave commissioners authenticated his opinion "because in Jan. 2007 they reduced the rate back down to where it was supposed to be."
    "The thing that concerns me is that many of these actions seem to have been taken without the board's understanding, without the board's approval. Taken by the manager without the board having looked at these things," said District 2 Commissioner David King on Jan. 31 after the commission's unanimous agreement.
    PRC Chairman Jason Marks agreed.
    "I know for some customers it's a problem on their bill, but the bigger problem is that it's a management failure. It's an oversight failure of the process," Marks said.
    Eight members from the CNME service area serve on the board, according to the co-op's by-laws. Board meetings are held every month.
    CNME General Manager and CEO John Wheeler said all rate changes have been approved by the board and all rates have been filed properly.
    Wheeler said that the PRC investigation "could cost the cooperative and its consumers over $100,000."
    "If Mr. Snyder had not put in an ETS unit, his other alternative would be propane. His equivalent bill for December would have been almost $800," Wheeler said.