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Where Does Electricity Produced 12 Miles Southwest of Las Cruces, N.M. Go?

Public Service Company of New Mexico (PNM), the State’s largest public electric utility, serving north central New Mexico and certain other areas in the state, is proposing a rate increase to raise 60.9 million dollars in new revenue. PNM says that 30% of the new revenue will be used to double generating capacity at the company’s Afton gas powered Generating Plant, south of Las Cruces. The new generation will be needed to meet increasing demand. At the El Paso Electric rate increase hearing in Las Cruces, the Public Regulation Commission expressed concern about how EPE would meet future demand in Las Cruces since the the Texas utility is not building new generating capacity and has made little progress in energy efficiency. So why has PNM and not EPE built a new plant in fast growing Las Cruces?

To understand this arrangement, go back to March 8, 2001, the day New Mexico Governor Gary Johnson delayed and ultimately ended electricity deregulation in New Mexico. Previously, the legislature had jumped on the deregulation band wagon passing the Electric Utility Restructuring Act of 1999. After the Enron/California energy crisis, the legislature reversed itself with Senate Bill 266 which was signed into law. This returned New Mexico consumers to a regulated industry in which power can only be purchased from the local monopoly. However, an amendment known as the PNM Amendment allowed regulated utilities to “construct unregulated generation for sale on the wholesale market.” Utility companies could sell electricity on the open market for the highest price available, while limiting consumers to the local utility.

Building a gas powered generating plant south of Las Cruces, the Afton Plant, was an attractive investment for PNM. As a “merchant” plant, Afton, using local water and gas resources to generate power, sells electricity to the highest bidder on the wholesale market. However to meet increasing base load electricity needs in north New Mexico, PNM’s current plan is to double capacity at Afton and transmit the power to Albuquerque, bypassing Las Cruces.

In the electricity industry “retail wheeling” refers to the ability of an energy consumer to select their own energy supplier, or "wheel in" energy from one of two or more different suppliers. Since the repeal of electricity deregulation, retail wheeling is not available to the consumer in New Mexico but is freely engaged in by the utilities. Hence electrons traveling north on PNM's lines from Las Cruces pass electrons southbound on El Paso Electric lines from Phoenix. Affordable efficient energy, you can’t there from here.




very interesting, but I don't agree with you