City Water Takeover Shades Electric Utility Debate

As the city explores taking over electric utility from PNM, officials recall broken promises of low water rates

The city's broken promise that rates wouldn't increase significantly once it took over water distribution from Public Service Company of New Mexico decades ago is already haunting the early stages of a debate about whether Santa Fe should take over electric power distribution from PNM.

District 2 Councilor Joseph Maestas at Wednesday night's Public Utilities Committee meeting advocated for his resolution that would direct city staff to "explore, research and analyze" steps identified in a 2012 study on the

in Santa Fe.

"As I talk to a lot of advocates and skeptics out there, what they tell me is that, 'When you all acquired the water company, you promised lower rates and that's not what happened,'" he said. "So I think that taste, that bad taste, is still in the mouths of many of our citizens. And for that very reason I really feel we should not—we should not go it alone."
Water rates have increased by more than 40 percent since the city's takeover of that distribution system, but at the same time, water conservation has increased.
Maestas' resolution would direct staff to build on the study conducted by the nonprofit New Energy Economy with help from MSA Capital Partners. 
It concluded that a public utility could provide rates anywhere from 9 to 35 percent less than what PNM can offer through 2028, depending on the scenario. A municipally owned utility, the study contends, could at the same time rely more heavily than PNM on renewable energy resources  such as solar and wind. It could cost up to $255 million to acquire PNM's distribution system, says the study, which is in the PDF below this post.
Masetas said he's spoken with county commissioners who might introduce a legislation in that body similar to Maestas' bill.
"We share the cost if we go with the county," he said. "We share the risks if we stay with the county."

District 1 Councilor Patti Bushee questioned whether the study would have reliable cost estimates of taking over electric power from PNM before asking the public its opinion on the issue.

A feasibility study would have to appraise PNM's distribution system in estimates that not only account for the company's infrastructure, but also so-called "stranded costs," or PNM's investment in that infrastructure.

Bushee said she doesn't oppose the idea of taking over electric distribution.

"I know that maybe the intent of this is to really bring back good information, but if you're not starting with good information, then I don't really know what the point of this is," she said.

"Conceptually everybody's interested in knowing more about this idea," Bushee told the committee. "However, I am really, seriously stressing that the devil is in the details on this one."

The resolution, also sponsored by District 3 Councilor Chris Rivera, passed with votes from him, Maestas and Peter Ives. Councilor Bill Dimas was absent from the meeting, and Bushee abstaining from the vote. "I'm looking for more details before I vote on it," she said said.

The Finance Committee is scheduled to hear the resolution Jan. 5 before the full council considers it on Jan. 15.

Public Utility Resolution by justinhorwath

Letters to the Editor

Mail letters to PO Box 4910 Santa Fe, NM 87502 or email them to editor[at]sfreporter.com. Letters (no more than 200 words) should refer to specific articles in the Reporter. Letters will be edited for space and clarity.

We also welcome you to follow SFR on social media (on Facebook, Instagram and Twitter) and comment there. You can also email specific staff members from our contact page.