NM high court shuts down utility’s $5M rate hike to comply with ETA
The New Mexico Supreme Court has ruled on a contentious matter concerning Southwestern Public Service Co.’s proposal to impose an additional charge on its customers, aiming to garner over $5 million in a span of three years.
This proposed charge, known as a rate rider, was intended to offset the costs associated with augmenting the utility’s renewable energy output as a shift from traditional fossil fuel sources, mandated by the state’s Green New Deal, also known as the Energy Transition Act (ETA).
In New Mexico, the fully Democrat Gov. Michelle Lujan Grisham-appointed Public Regulation Commission (PRC) oversees electricity tariffs. In 2021, the Southwestern Public Service Co. approached the PRC with a request to introduce this rate rider, positioning it as a necessary step toward fulfilling the state’s mandate for increased renewable energy production.
New Mexico’s legislative framework mandates a significant push toward so-called “renewable” energy, setting strict guidelines for utilities to follow.
However, the PRC turned down this request, citing a need for concrete evidence from Southwestern Public Service Co. regarding their specific plans to invest in or develop new renewable energy projects with the proceeds from the proposed rate hike.
The state’s highest court has now affirmed the PRC’s decision, providing clarity on the issue. The court’s judgment underscored that the legislation encouraging the shift toward renewable energy was designed to promote the actual development and acquisition of clean energy resources.
The justices pointed out that the utility company’s proposal failed to demonstrate how it would contribute to expanding renewable energy infrastructure, thus falling short of the legislative intent behind financial incentives for a “clean” energy transition.
With utilities unable to increase rates for costly new eco-leftist mandates, it is unclear what utilities will be forced to do if no rate hikes are granted due to the apparent steep requirements mandated by the Democrat-run state.