PNM settles FERC generation rate case

PNM Resources' New Mexico utility, PNM, filed an agreement with the Federal Energy Regulatory Commission that would settle its generation rate case with Navopache Electric Cooperative submitted in September 2011.

The agreement requires approval from FERC and the Navopache board of directors. It does not impact retail rates for New Mexico residential or business customers. PNM has been the full requirements wholesale provider for Navopache since July 2000.

As permitted by FERC rules, in April 2012, PNM began billing at the higher rates associated with the filed case, subject to refund. Revenues recorded by PNM since April have been aligned with the agreed-to annual increase of $5.3 million.

This is expected to result in a $0.03 improvement in 2012 ongoing diluted earnings per share compared with 2011, which is in line with the previously issued 2012 guidance range of $0.00 - $0.05 and $0.04 for a full year of 2013.

This "black box" settlement has an imputed rate base of $36.7 million and a 10 percent return on equity. The associated debt/equity ratio is 50-50. Under the settlement, the contract with Navopache is extended for ten years, and the rates are locked in until Jan. 1, 2015.

PNM is an energy holding company based in Albuquerque, N.M., with 2011 consolidated operating revenues of $1.3 billion, excluding First Choice Power. Through its regulated utilities, PNM and TNMP, PNM Resources has about 2,550 MW of generation capacity and serves electricity to more than 735,000 homes and businesses in New Mexico and Texas.

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