PNM rate increases fuel soaring profits
New Report Finds New Mexico Utility PNM Used Huge Rate Hikes
on Residents to Fuel Soaring Profits During Recession
Little spent toward clean energy or efficiency for New Mexicans
ALBUQUERQUE, N.M. - February 28, 2012 - The Sierra Club, New Energy Economy, San Juan Citizens Alliance, Diné CARE, and Southwest Organizing Project released a report today finding that New Mexico’s largest utility, the Public Service Company of New Mexico (PNM), has aggressively pursued major increases in electricity rates, corporate profits, and executive pay during a period of economic hardship for many residents.
The analysis of financial documents and investor presentations of PNM and its parent company, PNM Resources (PNMR), reveals that since 2008 the utility has directed 79 percent of the $182 million it has raised from rate increases into corporate profits driving a 2500 percent profit increase.
“With three rate hikes in four years going mostly to corporate profits while New Mexicans are struggling, PNM is behaving like a big Wall St. bank,” said New Energy Economy Executive Director Mariel Nanasi. “The utility’s claims to care about residents and rate impacts ring hollow.”
The report finds that in 2010, the year unemployment in New Mexico hit 8.4 percent, PNMR raised pay for its top five corporate executives by 68 percent, including doubling CEO Pat Vincent-Collawn’s pay to nearly $2.5 million a year.
PNM’s 2008, 2009, and 2011 rate hikes have amounted to an additional $250 a year for the average New Mexico residential ratepayer, a 41 percent increase, according to the analysis. Less than 6 percent of the money from PNM’s rate hikes were spent toward energy efficiency programs that benefit ratepayers or clean energy projects that create jobs and reduce reliance on costly and polluting coal plants, such as PNM’s San Juan Generating Station near Farmington.
“PNM has been enriching its investors while stalling on renewable energy investments and efficiency programs that create jobs, cut pollution, and save New Mexicans money,” said Shrayas Jatkar, Sierra Club organizing representative in Albuquerque. “This is a wake-up call that ratepayers and regulators must closely question any PNM rate increases going forward.”
While the state’s other investor-owned utilities, El Paso Electric and Southwestern Public Service, are complying with state law by providing 10 percent of their electricity from renewable energy sources, PNM is failing to meet the standard. On energy efficiency programs that save New Mexicans money, PNM lags far behind the 5 percent savings required by 2014, the report finds.
“New Mexicans want more energy coming from clean sources without the air pollution, toxic ash waste, and intensive water use of burning coal,” said Mike Eisenfeld with the San Juan Citizens Alliance in Farmington, where residents are exposed to air pollutants from the nearby San Juan Generating Station and Four Corners Power Plant. “On that priority, PNM is holding our state back.”
The Perspective on PNM report notes that 80 percent of PNMR stock is held by financial institutions, largely outside of the state. After the November 2011 sale of its Texas energy business First Choice for $270 million, PNMR used the money to repurchase $230 million in PNMR shares, meaning “most of the money left New Mexico instead of being invested in-state,” according to the report.
"PNM has been resisting the air pollution controls needed at its San Juan coal plant at the exact same time they've been putting so much money to profits," said Lori Goodman with Diné Citizens Against Ruining Our Environment (Dine’ CARE). "That's an added insult to all who live near that plant's pollution, and it says a lot about PNM's priorities."
The report is being shared with members of New Mexico’s congressional delegation and Public Regulatory Commission (PRC).
The report is attached to this press release, “Perspective on PNM: Rates, Profits & Priorities During the Recession (2008-2012).”
Shrayas Jatkar, Sierra Club, (505) 459-2718
Mariel Nanasi, New Energy Economy, 505-469-4060
Mike Eisenfeld, San Juan Citizens Alliance, 505 360-8994
Lori Goodman, Diné CARE, (970) 759-1908
|Perspective on PNM Report - Final.pdf||193.63 KB|