Socorro Electric Co-op fights the PRC and the city

April 2 – When the Socorro Electric Cooperative’s urban right-of-way franchise contract ends in 2024, it could be kicked out of town and replaced by a new municipal utility, according to Socorro Mayor Ravi Bhasker.

Socorro’s eight-member city council unanimously offered to buy out the co-op in early March, but failing that, the city is ready to evict the co-op from its property, Bhasker said.

“We gave the co-op the right to operate in our town and provide electricity, and it’s our right to just take that back,” Bhasker told the Journal. “We can tell them to remove their equipment from our property. We have that power and we will exercise it.”

The dispute between the city and the co-op has been going on for years, but it’s come to a head over the utility’s refusal to comply with an order from the state’s Public Regulatory Commission to restructure its electric rates. If implemented, the PRC ordinance would reduce costs for the city and large consumers such as the New Mexico Institute of Mining and Technology – which effectively subsidizes residential customers with higher rates. high – while increasing the fees imposed on urban and rural residents.

The co-op appealed the PRC’s order to the state Supreme Court, arguing that the commission exceeded its authority by imposing a rate restructuring unsolicited by the utility. But in January the court denied the co-op’s request to stay while it continues to consider the appeal. And on Wednesday, the PRC’s five commissioners unanimously approved a “cease and desist” order to force the cooperative to implement the new tariff structure immediately.

The co-op also faces nearly $900,000 in PRC-imposed fines of $1,000 a day that have accrued since April 2020, when the commission approved penalties for non-compliance with the rate restructuring, ordered originally by the PRC in September 2019. Wednesday’s order also instructed a hearing examiner to consider whether the PRC should calculate the savings that would have been realized for large customers since 2019 if the new rate structure had implemented to return this money to customers.

The cooperative had previously told the PRC that it would not comply with the PRC tariff order until the Supreme Court ruled on its appeal, despite the court rejecting a stay. But the co-op declined to comment on the PRC’s new cease-and-desist order.

“We are engaging our legal counsel and reviewing our options,” the co-op’s general manager, Joseph Herrera, told the Journal. “We cannot comment on ongoing litigation.”

For the city, however, the PRC dispute is now secondary to municipal plans to evict the co-op by 2024, said Bhasker, who called the co-op a “red operation” for challenging the authority of PRC regulations.

“The PRC is supposed to oversee them, but they always say they won’t comply,” the mayor said. “To me, that’s the definition of a red operation and they need to be stopped.”

In the city council’s takeover bid in early March, he said a city utility could operate much more efficiently, lowering electricity rates for all urban residents. It could also extend service to surrounding communities at lower prices than co-ops, Bhasker said.

The city has negotiated with third-party electricity providers who could provide bulk electricity through renewable resources such as solar generation at almost 50% less cost than the co-op, which receives its electricity from the cooperative wholesale supplier Tri-State Generation and Transmission, Bhasker mentioned.

“The co-op pays 8.5 cents per megawatt hour to Tri-State, but we can get wholesale power for only 4.5 cents,” Bhasker said. “We have an opportunity to increase our revenue stream and provide better service to our residents.”

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