Jemez Mountains Electric Cooperative officials deny that they plan to raise rates for any customers despite passing a policy over seven months ago deemed a rate increase by representatives of the New Mexico Public Regulation Commission.
The policy passed at the Jan. 25 Co-op Board of Trustees meeting would change rates for net-metering customers and member-owners, as well as limit the size of the systems allowed to be installed on homes and the process for rolling over extra power sold back to the Co-op.
The net-metering class of customers have renewable energy systems installed at their properties, such as solar panels, and receive credits for any excess electricity generated by their system that goes back onto the Co-op’s distribution lines. The rates are regulated by Co-op Rule 14, which went into effect in 2003 and was approved by the Public Regulation Commission.
Although the new net metering policy passed in a 7-3 vote, Co-op management will not provide a date for when they plan to file an advice notice with the Public Regulation Commission to begin the rate change process.
Co-op interim general manager Andrew Chávez read a prepared statement on behalf of Board President and District 6 Trustee Leo Marquez during a Monday telephone interview:
“Let (the Rio Grande SUN reporter) know there are no rate increases and there was never talk of one,” Chávez read from the statement. “If indeed there were an anticipated rate increase, (the Co-op) would hire a third-party for a feasibility study and evaluation. At that point, it would be passed onto the membership for review and protest. It would clear hurdles at that point to go to the (Public Regulation Commission) for approval.”
Marquez, who became Board president at the July annual member-owner meeting, replied to a request for an interview about an hour after Chávez read the prepared statement.
“Under my watch I have no intentions of doing any rate increases,” Marquez said.
Despite this statement, he was one of the seven trustees who passed the policy outlining changes to the net metering policy.
“Let’s be clear, this is an operational policy, this isn’t a Board policy,” Marquez said at the Jan. 25 meeting.
Marquez said Monday the policy may never go into effect.
“All we were doing was looking at a policy for something we would be doing later on, if we do it,” he said.
Marquez said in a Tuesday interview that the trustees thought passing the policy would be simple, but it was not, so they decided to reevaluate it.
In the past year, the Board has approved two other policies, dealing with communication between the public and Co-op officials, that were immediately enforced.
Chávez said Monday that he was unable to answer questions about the process of developing the policy because he did not have the information in front of him and because he was not general manager at that time.
Specific questions he was unable to answer included why the Board would pass a policy with no intention of filing an advice notice with the Public Regulation Commission, whether or not a feasibility study was conducted to determine the rate increase outlined in the policy, if costs associated with net metering member-owners were causing a financial burden on the Co-op and if it was Co-op or Public Regulation Commission officials who requested a meeting in March to discuss the policy.
District 6 Member-Owners Cristella and Dave Neal filed Feb. 8 a Public Regulation Commission Consumer Relations Informal Utility Complaint about the policy, stating it would raise their electric bill by about $40. They met with Public Regulation Commission officials on March 28 to discuss the complaint, Dave Neal said.
“Until the rate is filed with the Commission, (the Co-op) can’t change it, so it remains as is,” Milo Chavez, acting director of the Public Regulation Commission’s Utilities-Economic Division, said during a June 17 telephone interview.
The Neals’ initial complaint asks the Public Regulation Commission to intervene and direct the Co-op to suspend the implementation of the net-metering policy, require the Co-op to follow the procedures for adopting a rate increase and complete a rate analysis of other rural electric cooperative net metering policies to determine the equality of the policy.
The complaint also states that Dave Neal attended the Jan. 25 meeting to ask for Trustee-at-Large John Tapia to remove himself from the Board due to alleged violations of the Co-op bylaws.
Tapia said at the Jan. 25 meeting that he is an employee of Mosher Enterprises, a company owned by Jerry Mosher.
Mosher also owns Cuba Jemez, LLC, the same company that will build, own and operate a solar array in Alcalde that will sell energy to the Co-op.
Neal cited Article IV of the Co-op’s bylaws, which state trustees are “not in any way financially interested in a competing enterprise or a business selling electric energy or major supplies to the Cooperative.”
Co-op contract attorney Charles Garcia, of Cuddy & McCarthy, LLC, wrote a memo, dated Jan. 29, that Tapia’s employment did not violate the bylaws.
Dave Neal said he has no problem with the revision of Rate 14, but has a problem with how the Co-op has gone about the process and that it violates member-owners and customers rights to due process.
“It is a very fair thing to do, but going about it the way they did, which is denying the members any opportunity (to protest), ” he said.
Dave Neal said he and his wife had a meeting with Public Regulation officials on March 28 to discuss their complaint.
Public Regulation Commission staff met with Co-op officials two weeks earlier on the morning of March 15, according to an email from Commission Consumer Relations Division Supervisor Ryan Jimenez.
“It was the consensus of our staff that (the Co-op) has been billing correctly according to its Rate 19 for the recovery of Tribal Rights of Way expenses,” Jimenez wrote.
Co-op Rate 19 includes all the rate riders charged to customers and member-owners for recouping the costs of tribal easements. Rate riders are charged to customers depending on their location within the Co-op’s service area.
Jimenez wrote in the same email that allegations of conflict of interest with trustees remain unsolved and that staff is continuing discussions with Co-op officials.
The Neals filed Aug. 5 a Motion for Rehearing and Reconsideration of their original Consumer Relations Informal Utility Complaint.
The couple wrote in the motion that they did not agree with the Public Regulation Commission’s response. They refer to an April 16 email exchange between themselves and Jimenez to ask if any progress had been made on their first complaint.
“I was under the assumption that after the meeting, the consensus was that you had understood JMEC’s latest response (re: billing rate) and that there was nothing more to proceed with,” Jimenez wrote.
The issue, Dave Neal said, is there are problems with how the Co-op bills net metering customers and what is written in Rate 14, the rate that governs how Co-op net metering operates, and what is in the new policy.
Rate 14 states bills may be increased to include any taxes under the Gross Receipts and Compensating Tax Act, as well as any other taxes, fees or charges “payable by (the) Cooperative and levied or assessed by any tribal or governmental authority on the service rendered, or on the right or privilege of rendering the service, or on any object or event incidental to the rendition of the service.”
The net metering policy passed in January reflects this language.
“All applicable riders will be charged to the customer based on the amount of energy delivered plus the excess produced by the system during the billing cycle,” the net metering policy passed in January states.
This means net metering customers will be charged the rate rider fee applicable to their area for any electricity delivered by the Co-op to their property and for any excess electricity generated by their system and put back on the Co-op’s distribution lines.
Dave Neal said the problem is that the Co-op is not following Rate 14 and he is not being charged all the applicable rate riders for any excess electricity generated by his net metering facility and put back onto the Co-op’s grid.
The Neal’s July 17 bill shows no charges for Rate Rider 4, which is applicable to customers in the El Rancho area and pays for tribal easement costs associated with San Ildefonso Pueblo. It also does not include any charges for Rate Rider 2, which is charged to all customers in the Co-op’s service area.
Although Rate 14 and the new net metering policy are in agreement, it would change how customers are billed, he said, and this necessitates the Co-op to go through the formal rate increase process.
Marquez said the Co-op just wants everyone to pay their fair share of the rate rider costs.
Public Regulation Commission Legal Division Attorney Bradford Borman said in a July 27 telephone interview that state statute regulates the process for what happens when a rural electric cooperative proposes new rates.
Rural electric cooperatives must file an advice notice, which allows customers and member-owners an opportunity to file protests with the Public Regulation Commission objecting to the change in rates, he said.
According to state law, “whenever there is filed with the commission by any public utility a complete application as prescribed by commission rule proposing new rates, the commission may, upon complaint or upon its own initiative, except as otherwise provided by law, upon reasonable notice, enter upon a hearing concerning the reasonableness of the proposed rates.”
Borman said Public Regulation Commission Rule 540 also governs the procedure regarding the review of rates for cooperatives.
Rule 540 implements the state statute, the rule states. If 1 percent of a rate class or 25 member-owners, whichever number is less, file protests, the Commission “will determine if there is just cause to review the rate proposal through a formal rate hearing.”
Since the Co-op has not filed an advice notice to start the formal rate increase process, member-owners cannot follow the protest procedures outlined in the state’s administrative code and statutes.
Instead, Dave and Cris Neal filed their two complaints using a different state statute that allows any party or person to file a complaint if “any rate, service regulation, classification, practice or service in effect or proposed to be made effective is in any respect unfair, unreasonable, unjust or inadequate.”
The Public Regulation Commission can hold a hearing if it finds probable cause for the complaint, the statute states. The Commission may also hold a hearing without a complaint being made “whenever it deems that the public interest or the interest of consumers and investors so requires.”