Title
Consider and take action on a resolution authorizing suspension of the effective date of the Texas-New Mexico Power Company's rate increase and the intervention in the Public Utility Commission Docket No. 38480, authorizing the City to join with the Alliance of Texas-New Mexico Power Municipalities (ATM), and authorizing provision of experts and legal representation (Assistant City Manager, Management Services)
Staff recommends approval.
Background:
On August 26, 2010, Texas New Mexico Power Company (TNMP) filed an application to increase its rates increase with the City and with the Public Utility Commission of Texas (PUC). TNMP proposes to increase its base-rate revenue requirement for its Texas retail service area by approximately $21 million. TNMP also proposes increasing its return of equity to 11.5% from the 10.25% it agreed to in its previous rate case. This request would result in a 30% increase to the Residential class of customer, which will increase the average customers bill by approximately $9.80 per month. The customer charge for the average customer will also increase from about $8 per month to nearly $20 per month. The rates sought by TNMP are passed on to the Retail Electric Providers (“REPs”), who pass these costs on to retail customers. TNMP proposed an effective date of October 1, 2010 for its increase. The table below shows TNMP’s allocation of its proposed increase in rates:
Rate Class Present Revs Proposed Revs Percent Change
Residential $74.6M $96.8M 30%
Secondary <5 kW $4.4M $3.7M -16%
Secondary >5kW NIDR $53.3M $49.2M -8%
Secondary >5 kW IDR $6.9M $7.1M 3%
Primary NIDR $5.3M $4.7M -12%
Transmission $7.1M $6.5M -9%
Lighting $3.9M $4.0M 3%
While review of TNMP’s application is in the very preliminary state, there are certain matters we know are in TNMP’s rate application: TNMP will seek a return on equity higher than that agreed to and authorized in its last rate case. In that rate case, the PUC authorize...
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