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PNM Resources'
PNM New Mexico utility, PNM, Friday filed an agreement
with the Federal Energy Regulatory Commission that would settle its generation
rate case with Navopache Electric Cooperative submitted in September 2011.
The agreement requires approval from FERC and the Navopache Board of
Directors. It does not impact retail rates for New Mexico residential or
business customers. PNM has been the full requirements wholesale provider for
Navopache since July 2000.
As permitted by FERC rules, in April 2012, PNM began billing at the higher
rates associated with the filed case, subject to refund. Revenues recorded by
PNM since April have been aligned with the agreed-to annual increase of $5.3
million. This is expected to result in a $0.03 improvement in 2012 ongoing
diluted earnings per share compared with 2011, which is in line with the
previously issued 2012 guidance range of $0.00 - $0.05 and $0.04 for a full
year of 2013.
This “black box” settlement has an imputed rate base of $36.7 million and a 10
percent return on equity. The associated debt/equity ratio is 50-50. Under the
settlement, the contract with Navopache is extended for ten years, and the
rates are locked in until Jan. 1, 2015.
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