PNM Resources Inc. (PNM) said Tuesday that its New Mexico utility, PNM, has filed an agreement with the Federal Energy Regulatory Commission that would settle its transmission rate case submitted in October 2010.
The unopposed agreement requires Federal Energy Regulatory Commission (FERC) approval and does not impact retail rates for New Mexico residential or business customers.
As permitted by FERC rules, in June 2011 PNM began billing at the higher rates associated with the transmission case, subject to refund. Revenues recorded by PNM since 2011 have been aligned with the agreed-to annual increase of $3 million.
The agreement is a "black-box settlement," meaning the parties agreed to a specific revenue number but no specific return on equity.
The settlement parties agreed not to oppose the concept of a formula-based transmission rate filing as long as it is submitted within a year of the pending case's approval by FERC. The company plans to file for formula rates after approval in the current case is received.
PNM Resources CEO Pat Collawn said, "Although the settlement is less than the $9.6 million requested, it is a good first step toward earning an appropriate return on this business by allowing more timely recovery through the implementation of formula-based rates..."
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