Photo by johnwilson1969/flickr.com
As the hearings wind down and the Public Regulation Commission gets ready to render a decision on whether to approve PNM’s historic rate hike request, now is a good time to reflect on just how exactly PNM is spending your hard-earned money.
As background, PNM is seeking an $85 million base-rate increase from ratepayers to cover its rising costs, capital expenditures, and payouts for its shareholders. This is on top of the 21 percent in bill hikes PNM has been awarded since 2008, as well as almost another $60 million in requested “riders” and capital additions, which will translate directly into even more costs to customers over the next two years.
So, before customers are required hand over any more of their money to PNM through ever increasing bills, let’s all take a hard look at how PNM is spending this cascading financial windfall.
Spending $2.7 million to push for a rate increase
It’s not a pretty picture. In the past year alone, PNM has squandered at least $10 million in lobbying the PRC for rate increases and for compensation and bonuses for its top five executives.
Breaking that down, almost $3 million of your money went to making sure the commission grants the rate hike request in the first place. To date, PNM budgeted and spent $2.7 million to pay for attorneys and expert witnesses! 100 percent of that is funded by you – the ratepayer.
Carmela Starace
It’s a little ironic. You are funding your own utility bill increase. Shareholders do not contribute.
That’s $2.7 million on a single hearing! PNM paid one of its many witnesses, Mr. Gary McCutchen, $550 per hour for his work, including the hours he spent flying to New Mexico from North Carolina, as well as the time he sat in the hearing observing.
The purpose of his high-priced testimony was to justify the hundred million dollar investments PNM continues to make in coal plants in our state. That $550 per hour PNM was paying Mr. McCutchen was coming right out of your pocket.
Meanwhile, many New Mexicans are lucky to take home $550 a week. And some fixed income elderly folks out there are living on that much per month!
A rotten deal for customers
With high-priced witnesses making in an hour what some hope to make in a pay period, it’s no wonder PNM needs a $2.7 million budget to fund its hike requests.
And what incentive does PNM have to be responsible and accountable in its legal costs and spending? After all, it’s your money. For them, it’s an investment!
Any way you slice it, it’s a rotten deal for customers. Take $2.7 million of the money rate payers give PNM and use it to get an additional $85 million per year forever. If it means paying 12 witnesses up to $550 per hour, as well as a team of four or five lawyers to get it, so be it!
When you also factor in the millions PNM gave in bonuses this year to its top executives, you are within inches of the $10 million mark. And that’s just one year.
Before the commission awards one more penny to PNM, it should demand that the utility company begin to manage its money, which just last month was our money, a little more wisely. In these devastating economic times, even PNM should be accountable for how it spends the money it receives from hard working New Mexicans across the state.
Starace is lead council for Prosperity Works, which is working on the PNM rate case currently before the PRC.