Commentary: Kudos to the Dona Ana County Commission and the Las Cruces City council for battling El Paso Electric’s proposed rate increase. Their persistence is a model for how local government can identify and meet the most urgent needs of our county.
Neither body was obligated to take on this task. The Public Regulation Commission and the Attorney General’s office have legal mandates to insure the lowest possible rates for electricity consumers. But when presented with evidence that the traditional players might be dropping the ball, the city and county stepped up.
As a result, the Public Regulation Commission hearing examiner has recommended reducing El Paso Electric’s proposed $8.6 million annual increase to just $.6 million.
With $8 million in annual savings already in hand, the city and county could have declared victory and walked away. Instead, they are insisting on further review to insure fair rates for residential consumers, even though this might result in some increases in their own bills. This is a truly remarkable example of government looking out for the community ahead of its own bureaucratic imperatives.
Most importantly, Las Cruces and the County are continuing to pressure El Paso Electric to bring its business model into the 21st century. The Public Regulation Commission’s recommended rate structure does not require the company to make serious efforts reduce peak power demand. This stands to cost customers billions of dollars as the utility makes huge investments in facilities that are needed for only a few peak demand hours per month.
El Paso Electric has already mapped out plans for ratepayers to foot the bill for over a billion dollars in new capital investments. This despite the fact that they already have six power plants operating less than 1% of the time.
A $2 million investment in pilots to reduce peak demand has the potential to shave hundreds of millions of dollars off of that investment. Similar programs have proven successful in the Pacific Northwest, California, Texas, and across the Northeast. Failure to run these pilots would represent a monumental failure of public policy and of common sense.
El Paso Electric has paid lip service to new peak demand reduction pilots but makes no concrete commitments. They have implemented poorly designed pilots in the past that were deliberately intended to fail. Las Cruces and Dona Ana County have said “enough” and are urging regulators to require the utility to offer a program designed to succeed. They call this program “customer choice”.
Customer choice rates are voluntary, and offer residential customers substantial discounts for reducing power consumption during high demand periods. The discounts are similar to those already available to major industrial customers, but stand to have a much bigger impact in reducing total peak electricity use. Residential customers represent about 70% of electricity consumption in Dona Ana County.
The need for customer choice rates is urgent because El Paso Electric is pushing ahead with capital investment programs right now. Quick implementation can show that these investments are unnecessary before the utility obtains final approval from regulators.
Las Cruces and Dona Ana County have both recognized the compelling case for offering meaningful customer choice rates. Now it is time for the Public Regulation Commission to do the same.
Let’s end El Paso Electric’s fast talking when it comes to pumping up electricity prices, and their slow walking on adopting sound management practices. Please join the city and county in urging the Public Regulation Commission to require an aggressive customer choice pilot. Their decision is due this March.
Go to http://nmprc.state.nm.us/commissioners/index.html and click on “Email all 5 commissioners at once” to send your message.
Steve Fischmann is a former State Senator and Chair of the Southwest Energy Alliance