PNM decoupling doesn’t work for customers
Plan guarantees utility income rather than incentivizing smart use
BY DEREK STOUT
ALBUQUERQUE, FORMER PNM ENGINEER
On May 28, PNM filed a proposal with the New Mexico Public Regulation Commission that will probably increase your electric bill and doesn’t help to bring about the changes that will enable the envisioned 100% carbon- free future that PNM claims to be working toward.
This proposal is called “decoupling” because it removes the link between the energy that PNM’s customers use and the amount of money that PNM receives from its customers. PNM’s methodology relies on a calculation based on an outdated rate case that determines how much money is “owed” to PNM by each customer in the residential and small commercial rate classes; if PNM doesn’t receive what it is “owed” from its customers, then a charge will be added to your bill.
Essentially, PNM is proposing an income guarantee from its residential and small commercial customers regardless of how much energy PNM sells and how much individual customers try to conserve or offset their usage with solar.
There are numerous problems with PNM’s decoupling proposal.
It uses out-of-date costs and cost allocation methodologies. It was proposed during a pandemic in which many small businesses and residential customers are already facing increased financial stresses. The proposal may even be illegal and shows once again that PNM tries to interpret laws in ways that suit it.
PNM blatantly attempts to bypass rules that are set up to protect the consumer. Although each of these issues warrant further discussion, the problem that I will focus on is how decoupling actually works against renewables.
PNM has been focusing on supply-side resources and transmission and neglecting efforts that may eventually prove to be necessary on the demand side to keep electric rates reasonable by changing customer behaviors and encouraging demand-side generation such as customer-owned solar/wind/batteries. In order to provide the correct economic signals to its customers as many other utilities have done, PNM needs to develop advanced timeof- use rates that reflect the reality of what is happening to the value of electricity with more and more renewable generation on the grid.
These rates would give customers a financial incentive to change their usage behaviors to more closely match the renewable supply along with providing proper incentives for customers to own their own renewable generation and batteries to help the grid as a whole. This is the only fair way of allocating the costs of providing electricity when the majority of energy is provided by renewable resources.
Decoupling does pretty much the opposite of what PNM should be proposing in that it gives customer’s less control over their bills and penalizes everyone as more and more customers install solar generation, reduce their energy usage, or install energy efficient appliances. Instead of adapting their rate design proposals to the changing energy landscape in an appropriate manner, PNM continues to demonstrate that it is mostly in business for the money, and the impacts to the customer are an afterthought.
Income guarantee for PNM is its focus. There is nothing about PNM’s decoupling proposal that will increase energy efficiency, reduce customer load, move us toward a carbon-free energy portfolio or increase employment in New Mexico.
Please tell the NMPRC what you think of PNM’s proposal.
There is a Zoom public comment session scheduled for Oct. 8, or you can email Ana Kippenbrock at Ana.Kippenbrock@state.
nm.us before 5 p.m. on Oct. 5. Or send your written comments to Records at the NMPRC at P.O.
Box 1269, Santa Fe, NM 87504-1269 and reference case number 20-00121-UT.
Fortunately, a number of interested parties including the city of Albuquerque, Bernalillo County, the Albuquerque Bernalillo County Water Utility Authority and New Energy Economy have intervened in this case to point out numerous flaws with PNM’s proposal and move for its dismissal.
Hopefully, the NMPRC will put a stop to PNM’s blatant attempt to guarantee profits for its shareholders at the expense of its customers.