Business Owners Question Charges for Wind Power

By STACI MATLOCK

PRC moves to study PNM tariff; customers ask how utility uses fees

By Staci Matlock

The New Mexican

John Eckre powers 90 percent of his Bobcat Bite Restaurant on Old Las Vegas Highway with wind energy.

It costs him extra to buy it through Public Service Company of New Mexico’s Sky Blue program. And it doesn’t seem to him the price has gone down much for the wind power since he joined the program three years ago.

“I know it takes more money to build up infrastructure and invest in new sources of energy,” Eckre said. “But once that’s done, you would think the rates would go down. If it doesn’t, it makes you wonder if it is a scam.”

Eckre’s electric bill went up again in June, but it wasn’t for wind energy. It was to help PNM pay for the rising cost of fossil fuels like coal and natural gas.

The Public Regulation Commission approved an increase in PNM’s base electricity rate and allowed the company for the first time to collect a fuel surcharge to cover the rising cost of coal and natural gas.

But if Eckre is purchasing 90 percent of his electricity from wind, should he still be paying the new fossil fuel surcharge like customers who don’t buy renewable energy? Or should the rate be prorated based on the amount of wind energy a customer buys?

Those are the kinds of questions that prompted the PRC this week to announce it is reviewing the tariff PNM charges Sky Blue customers. PNM said it welcomes the review, but that’s not the response it first gave, according to PRC Chairman Jason Marks, when he questioned the company in a letter a month ago. “They said it was worth looking at but didn’t acknowledge the current rates were improper, and they didn’t make a strong statement that they weren’t either,” he said.

The PRC approved the fuel surcharge clause on a split vote after contentious discussions, Marks said, but the commission didn’t look much at how the surcharge would work with the Sky Blue program.

The base rate change the PRC approved this spring was the first one for PNM in

20 years, PNM spokeswoman Susan Sponar said. The fuel surcharge will allow PNM for the first time to cover the changing costs of coal, natural gas and uranium “without making a profit,” Sponar said. “The cost of fuel can change from month to month. We can’t necessarily predict that from month to month.”

The PRC is supposed to review the fuel surcharge every six months.

Customers who buy wind energy still have to use electricity generated by traditional sources like PNM’s coal-fired power plants “when the wind doesn’t blow,” Sponar said.

Marks counters that when the wind does blow, all the electricity goes into the same power grid shared with other sources of electricity. There’s no distinguishing the source of the electricity when it hits a customer’s light switch. The wind energy offsets the fossil fuels PNM needs to use, Marks said, paid for by Sky Blue customers. So maybe they should get a break, he said.

Currently, residential and small-business customers pay an additional $1.69 per 100 kilowatt-hour block of wind energy over their regular monthly electricity bill, or 1.6 cents per kilowatt. That rate has dropped from $1.80 per 100 kilowatt hours since May. The average customer uses about 600 kilowatt hours of electricity a month. Large commercial enterprises can choose to pay extra for a certain percent of electricity from wind power.

About 19,000 customers statewide participate in the program out of PNM’s half-million customers, Sponar said.

The wind power for Sky Blue comes from 136 wind turbines in Eastern New Mexico, owned by FPL Energy. PNM buys the wind power from FPL at cost, which means it can’t mark up the price for profit to customers, according to PNM.

The average residential customers’ bills have increased by about $10 since June with the new base rate and surcharge, according to Sponar.

Gene Butler, owner of The Firebird in Santa Fe, joined the Sky Blue program in 2007. He said he’s seen about a 10 percent increase in his electricity costs since the new fuel surcharge went into effect in June.

“My intent on signing up for Blue Sky program was to do what I could to reduce the carbon footprint of my business,” Butler said. “I think if we’re going to talk about cleaning up the environment, we need to step up and do it. If the rate goes up a little, I can live with that, but I do think the rate should be fairly distributed.”

Eckre also believes in doing his part for clean energy, he said, but “I’m hoping that it’s not just lining someone’s pocket.”

(c) 2008 The Santa Fe New Mexican. Provided by ProQuest Information and Learning. All rights Reserved.