Xcel Energy is seeking a 6.9 percent increase in New Mexico electricity rates.
Xcel spokesman Wes Reeves said the proposed increase was filed Monday at the New Mexico Public Regulation Commission meeting in Santa Fe. He said the increase is needed to pay for new infrastructure that will improve reliability.
Riley Hill, president and CEO of Southwestern Public Service, an Xcel Energy company, said in a press release the increase in rates is needed because the regional economy is changing and growing, and requires greater investment in the power grid. He emphasized that the growth of the power grid must keep pace as industries expand and new businesses come into the region.
“The Commission has up to a year to act on the request,” Reeves said. “Typically it takes around 13 months for an increase proposal to go throughout. This will not be an immediate increase.”
Reeves said that, if approved, a typical residential customer using 1,000 kilowatt-hours of electricity per month will see a monthly increase of $9.32, or about 10.7 percent more per month.
“This is the third rate increase proposed by Xcel in the past three years,” Reeves said. “In 2008 a 2.7 percent overall increase was proposed and in 2009 a 5 percent overall increase.”
Reeves said they have proposed a certain amount and the Public Regulation Commission generally approves a different amount.
The 6.9 percent increase translates into a revenue increase of $19.9 million for Xcel in New Mexico.
Over the next five years, Xcel Energy plans to invest about $2 billion to retrofit generation plants to make them more efficient and to reduce emissions, improve capacity and reliability on its transmission and distribution grid, and develop the future workforce in New Mexico and Texas.
Reeves said the infrastructure in Portales is one that is in need of improvements. He said Xcel plans to invest $874,000 to install new lines to increase capacity and update the facilities in Portales.
“The system was overloaded by the increased demand due to the cold weather stretch in January and February,” Reeves said. He said there were outages in areas across the town. One particular area had four outages in January.
Reeves said the system needs to be built to address the problem and to accommodate increased use.
Current rates are based on 2008 costs. Since that time, the company has absorbed higher costs for materials to expand and maintain its system of transmission and distribution facilities, as well as costs to make its generating fleet cleaner and more efficient, Reeves said.
Xcel Energy’s Texas and New Mexico service area covers more than 50,000 square miles, including most of the Texas Panhandle, the Texas South Plains region, and eastern and southeastern New Mexico.
Peak electricity demand in this region is currently about 5,000 megawatts.