The question of whether electric utility rates in Truth or Consequences are too high has been raised several times recently on social media. Opinions abound. The Sun did the research to provide a definitive answer and reports the results below.
The type of utility ownership was considered in grouping rate comparisons with other New Mexico communities.
T or C is among only five cities in the state that own an electric utility, according to the American Public Power Association’s publicpower.org website. Aztec, Farmington, Gallup and Raton also own electric utilities. Among those cities, T or C charges the second highest rate; Aztec charges the most. Aztec and T or C are small cities, which may partially account for rates higher than the larger cities of Farmington or Gallup. But Raton is also a small city, and it charges the least of any city-owned electric utilities in the state.
Aztec’s and T or C’s rates may be higher because they transfer money out of their electric funds and into their general funds. T or C plans to transfer $1.5 million out of the electric fund this fiscal year, according to the second-quarter budget report the city submitted to the New Mexico Department of Finance and Administration. Aztec transferred $650,000 out of its “joint utility fund,” which pools electric, sewer and water utilities funds, and into its general fund in the fiscal year ending June 30, 2019, according to the most recent year-end audit report available on the New Mexico Office of the State Auditor’s website.
The Sun also compared T or C’s electric utility rate to other New Mexico cities of like size, such as Taos and Edgewood, serviced by rural cooperative electric utilities. These were the highest utility rates among those compared, reflecting the cost of installing and maintaining miles of transmission lines to serve areas with less dense populations. The Sun included Sierra Electric Cooperative’s rates among this group, since it also is a cooperative serving rural customers in Sierra County and parts of Catron, Luna and Socorro counties. Sierra Electric was the most expensive among all rates compared.
The Sun then looked at PNM, a commercial company and the largest electric utility in the state. Its economies of scale allow it to charge lower rates than T or C in isolated towns with populations less than 3,000, such as Bayard, Lordsburg and Clayton, while also serving high-density areas. Other towns PNM serves are Albuquerque, Rio Rancho, Los Lunas, Belen, Santa Fe, Alamogordo, Las Vegas, Ruidoso, Silver City and Deming.
The Sun compared only residential rates, using as our metric a past bill for 132 kilowatt hours received by this reporter from T or C. Since management costs and asset upkeep affect and are included in the billed amount, we combined the kilowatt rate and base monthly fee to arrive at a per-kilowatt rate.
City-owned electric utilities
T or C has a population of about 5,900 and about 4,160 electric customers, according to a recent “Utility Billing Report.” It is the only utility among those compared that charges a “cost adjustment,” which covers the city’s operation and management costs and is tied to the kilowatt usage. The cost adjustment is $.04136 per kilowatt hour, or $5.46 for 132 kilowatt hours. The monthly fee is $8, which also covers management costs. Usage is $ .09 per kilowatt hour, or $11.88 for 132 kilowatt hours. The total cost, without tax, is $25.34, or $ .19 per kilowatt hour.
Aztec has a population of about 6,530 and about 3,500 electric customers, according to a city spokesperson. The $25.75 base monthly rate includes the first 100 kilowatt hours. Each kilowatt hour, from 100 to 500 kilowatt hours, is $ .038. The remaining 32 kilowatt hours cost would be $7.26, for a total bill of $34.23, or $ .26 per kilowatt hour.
Farmington has a population of about 45,258 and its city-owned utility has about 46,000 customers, according to the city website. The monthly charge is $6.75, and each kilowatt hour is $.10010. Usage of 132 kilowatt hours costs $13.21, for a total bill of $19.96, or $ .1512 per kilowatt hour.
Gallup has a population of about 21,854 and about 10,544 customers, according to the city’s Electric Department Director John Wheeler. The $7.80 monthly fee includes the first 50 kilowatt hours. Thereafter, each kilowatt hour costs $ .13. The remaining 82 kilowatt hours cost $10.66, for a total bill of $18.46, or $ .1398 per kilowatt hour.
Raton has a population of 6,047 and 4,550 electric customers, according to a utility spokesperson. The monthly base rate for urban residents is $ .0567 a kilowatt hour and for rural residents $ .0602 a kilowatt hour. There is a “fuel charge” of $ .0765 per kilowatt hour for both rural and urban residents. An urban resident pays $17.70 for 132 kilowatts, or $ .134 per kilowatt hour. A rural resident pays $18.04, or $ .1367 per kilowatt hour.
Taos has a population of about 5,967. Electricity is provided by the Kit Carson Electric Cooperative, with 22,278 customers, according to its website. The monthly service charge is $20.50. Each kilowatt hour is $ .11349. Usage of 132 kilowatt hours costs $14.98, for a total bill of $35.48 or $ .269 per kilowatt hour.
Edgewood has a population of 6,071. The Central New Mexico Electric Cooperative, which provides Edgewood’s electric service, has a total of 13,500 customers, according to its website. The monthly service charge is $21.75 and each kilowatt hour is $ .132. Usage of 132 kilowatt hours costs $17.42, for a total bill of $39.17, or $ .297 per kilowatt hour.
Sierra Electric Cooperative serves 3,185 customers, including unincorporated areas of Sierra County, as well as the City of Elephant Butte, according to its website. The monthly system charge is $25, and each kilowatt hour is $ .14385. Usage of 132 kilowatt hours costs $18.99, for a total bill of $43.99, or $.333 per kilowatt hour.
Commercial electric company
PNC is the state’s largest electric utility, with 525,000 customers. The monthly service charge is $7.11. The first 450 kilowatt hours are $ .0779432 each. The second 450 kilowatt hours are $ .1240339 each. Above 900 kilowatt hours are $ .1495326 each. Usage of 132 kilowatt hours costs $10.29, for a total bill of $17.40, or $ .1318 per kilowatt hour.