Gas bills rising to cover costs of storm

PRC says utility may collect extra $100M over 30 months, beginning in July or August

New Mexico Gas Co. customers should brace for a bill increase by the end of summer.

The Public Regulation Commission on Tuesday unanimously voted to approve the company’s request to allow it to spread out over 30 months a spike in customer costs incurred during a February winter storm.

The move will cost the company’s roughly 540,000 customers an average of $5.40 more per month, said Tom Domme, vice president for external affairs and general counsel for New Mexico Gas Co.

That’s about a 13 percent per-month increase over current gas costs, he said.

“It’s going to vary by customer, by usage, by time of year,” he said, adding a customer in a four-bedroom house is more likely to incur more of an increase than someone living in a one-room apartment.

“We realize COVID has affected customers and putting this on their bills at this point in time is not going to be easy for anybody,” Domme said. “We will work with our customers and will try to keep impact of this as low as possible on our customers.”

The Albuquerque-based natural gas company, which filed its request to the commission in April, said it had to pay about 80 times the typical cost to gas suppliers during the storm because demand was so high and supply was so low.

That wintry blast brought near-record freezing temperatures to the region.

The company took out a $100 mil

lion loan in March to help cover the payouts to suppliers. The extraordinary costs for Feb. 13-18 totaled $107.5 million, Domme said Tuesday. The company has already covered $7.5 million of that amount.

Domme said the $100 million it will raise through rate increases will cover both the loan and its accompanying interest.

He said the company is coming up with strategies to plan for potential similar scenarios that may happen in the future, including creating more gas storage facilities to buy gas at a “known price, which would alleviate the price impacts” of another major storm.

Currently the company has about 3.2 billion cubic feet of gas stored at a facility in West Texas, Domme said.

He said the rate hike will take place in either July or August. Though there was some initial talk of spreading the costs out over a 36-month period, the commissioners agreed to the 30-month plan as well as a number of other modifications Tuesday.

Though the commission’s general counsel, Michael Smith, presented the gas company’s plan in an open session, the five commissioners unanimously voted to debate the plan in a closed session.

Commissioner Theresa Becenti-Aguilar said that’s because state law allows the PRC to call a closed meeting to seek legal advice on issues — something it cannot do in public.

“We cannot get advice from Michael Smith or he cannot state his perspective on the legal issues in an open meeting,” she said before the commissioners went into a closed session.

State statute allow governmental bodies the right to call for a closed meeting to discuss attorney-client relationships and issues in which a lawsuit is pending or possible.

Becenti-Aguilar also noted the commission discussed the plan during an open meeting last week. That meeting included a public comment period.

The commission reemerged to approve the plan without further discussion.

Sarah Valencia, a spokeswoman for the commission, said after the meeting such closed debates are “fairly rare but it happens.”

Earlier this year, Domme said New Mexico Gas Co. established a $1.2 million fund to help income-qualifying residential customers and small-business owners who have fallen behind on natural gas bills because of the coronavirus pandemic.