By Cassie McClure
Published in the Las Cruces Bulletin 1/29/21
Rate case arguments between governmental agencies and companies don’t typically make for the most compelling reading. However, these situations are a reminder that there are agencies that take ownership of being responsible fiscal stewards, like Las Cruces Utilities (LCU). A recently resolved rate case between El Paso Natural Gas (EPNG) and its customers, including LCU, allowed LCU to recoup over 1 million dollars in rates paid in breach of an originally negotiated contract.
The backstory comes from the 1996 settlement between EPNG and its customers. EPNG operates a natural gas pipeline that serves the southwest, including Las Cruces. That settlement described certain costs that could not be included in future rates of customers like Las Cruces. But in its rate case filed in September 2010, the requested rates included certain costs LCU deemed inappropriate.
LCU’s legal firm in Washington, D.C., McCarter and English, along with other customers filed protests, thus beginning a long regulatory and legal process. Ultimately, from 2011 to 2018, LCU’s payments were 1 million dollars more than they should have been for natural gas transportation service.
“The Federal Energy Regulatory Commission (FERC) ruled in our favor, ordering EPNG to refund the money,” Mario Puente, LCU gas business analyst, said. “We received the refund in 2018, but EPNG filed an appeal, which is why we had held it in escrow until the case was fully resolved.”
The case went before the United States Court of Appeals that ruled in favor of LCU. The timeline for further appeals expired in October 2020. The money previously held in escrow is now going back into LCU cost of gas rates. Puentes explained that the average customer might not see a huge change in their bills, perhaps 20 dollars over a year depending on their natural gas use.
“Our role is to be good financial stewards of the utility,” Puentes said. “In pursuit of that goal, LCU has entered into long-term prepaid supply agreements that provide a discount from market prices saving our ratepayers more than 3 million dollars in the last 12 years.
“Our customers are benefiting because natural gas is inexpensive relative to where it was 12 years ago when it was ten dollars a dekatherm compared less than three dollars today,” Puentes said. “We do things that are within our control to manage costs by recognizing some things are out of our control, for example, the price of natural gas is set by the market, not regulated. So, the money we save is money that stays in Las Cruces.”
LCU can be reached at 575-528-3500 from 8 a.m. - 5 p.m. Monday through Friday. LCU provides services to approximately 100,000 Las Cruces residents and businesses.
PHOTO 1: Natural gas is an efficient, clean, and cost-effective energy source. LCU has agreements that keep prices low and constant and makes sure that negotiated contracts save customers money.