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PNM’s Continued Investments in Fossil Fuels Drive Large Electricity Rate Increases
April 15 - “PNM is currently seeking to raise its rates well over $100 million per year - the largest increase in New Mexico history. At the same time, PNM is not doing nearly enough to mitigate this and future proposed rate increases driven by its continued investment in old, dirty fossil-fuel power plants,” Don Hancock, Chairman of the Coalition for Clean Affordable Energy, said Friday.
PNM proposes a rate increase of a total of $156 million/year by 2013, a 20% jump in bills for customers. PNM had already raised electricity rates by 25% in the past few years due to investments in fossil fuel infrastructure. Thus, PNM rates will have increased 50 percent (1.25 x 1.20 = 1.50) in just a few years. The rate payers of New Mexico would be better served by a more much aggressive implementation of energy efficiency and clean renewable energy, says CCAE.
PNM’s proposed rate increase includes fossil-fuel based cost increases of $105 million (with $85 million implemented between now and January 2012, plus another $20 million in January 2013). Thus, electricity rates will have increased by 41% from fossil fuel investments alone. And this does not include hundreds and hundreds of millions of dollars already spent on those plants and charged to PNM customers.
However, by 2013, PNM’s planned investment in energy efficiency is only $27 million and renewable energy only $24 million, an almost trivial amount in relation to PNM’s $1 billion cost of service. This under-investment in new technology will continue to cause rate payer problems for the foreseeable future unless corrected by a more aggressive plan by the Company in energy efficiency and clean energy.
“Investments in energy efficiency save rate payers money,” Tom Singer of Natural Resources Defense Council said. “It is well known in the utility industry that investments in energy efficiency are at least 50% cheaper than building new energy sources, such as power plants and transmission lines. We encourage PNM and the Public Regulation Commission to adopt more aggressive energy-efficiency measures to stop this upward spiral of rate increases.”
David Van Winkle of the Rio Grande Chapter of the Sierra Club said “PNM should seriously reassess its future plans to continue to invest in aging fossil fuel plants that are getting more and more expensive to operate. More aggressive pursuit of energy efficiency will save rate payers millions of dollars. More clean energy investments will grow jobs in New Mexico and address the spiral of inflation caused by investments in aging fossil fuel plants.”
CCAE is comprised of the following organizations: A Center Advancing Sustainable Architecture (CASA), Environment New Mexico, Natural Resources Defense Council, New Mexico PIRG, Rio Grande Chapter of the Sierra Club, Southwest Energy Alliance, Southwest Energy Efficiency Project, Southwest Research and Information Center, and Western Resource Advocates. CCAE uses strategic advocacy, scientific analysis, and grassroots organizing to advance clean energy policy and programs.
Contact: Don Hancock, Chairman of Coalition for Clean Affordable Energy
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