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Gas Utility Gets Burned on the Spot Market

Fortnightly Magazine - May 1 1997

that should be renegotiated.

For the past several years, PSNM had been "playing Russian roulette with its portfolio strategy," pointing the gun at its customers rather than itself, the commission said. The commission rejected PSNM's argument that its reliance on the spot market had "saved consumers millions of dollars" in the past. It concluded, "Simple common sense and accepted business standards of business conduct" should have led the company to pursue methods such as price hedging to limit the risks to ratepayers. Re PNM Gas Services, a div. of Pub. Serv. Co. of New Mexico, Case No. 2752, Feb. 13, 1997 (N.M.P.S.C.). t

Phillip S. Cross is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

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