Retail Gas Choice Ok'd in N.M.

Fortnightly Magazine - October 15 1997
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The New Mexico Public Utility Commission has approved a natural gas restructuring plan for Public Service Co. of New Mexico.

The plan allows residential gas customers and small businesses using less than 10,000 therms per year to select gas providers; some as early as December (Case No. 2760).

According to David Warren, PUC executive director, the commission opened natural gas to competition 10 years ago, but because of various barriers, customers didn't take advantage of it. PSNM, for example, continued to charge exiting customers a $35-per-month rental fee.

The New Mexico attorney general proposed a customer-migration cap and expressed fears that if PSNM lost too many customers, it would incur high stranded costs. PSNM estimated it would incur stranded costs with a loss of between 40,000 and 100,000 customers. It serves 368,000 residential and 30,000 commercial customers. The PUC said it wouldn't limit the number of customers leaving the system, but it would leave the docket open to allow for a quick response should "unintended consequences" occur.

PSNM may file a request for stranded cost recovery. If approved, the costs would be recovered not only from remaining customers but from all customers contributing to the costs. Warren pointed out that Enron wanted the entire customer base opened to competition this year, but noted, "I don't think [PSNM] will lose that many customers this year."

Gas marketers can begin advertising when they're certified by the PUC. The PUC made clear that while the program has an initial term of about a year, it shouldn't be seen as a pilot. (em LAB


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