Many Lea County residents have noticed significant increases on their electric bills following the recent cold snap and Texas energy crisis. With stories of Texas residents receiving energy bills as high as 300 times the usual amount, New Mexicans are wondering if their own high bills are part of the fallout from the crisis.
The answer is complicated, but at least for this most recent bill it seems not to be the case.
Energy providers in New Mexico are regulated by the New Mexico Public Regulation Commission (NMPRC), and rate increases have to go through an extensive review process before they can be approved and take effect. However, the NMPRC does allow for some adjustments on bills to account for changing energy costs. These are referred to as fuel recovery costs and are based on previously approved formulas for calculating such an adjustment.
Bobby Ferris, General Manager of Lea County Electric Cooperative (LCEC), said that their rates were unaffected so far by the Texas Energy Crisis. “We have rates that are set and governed by the PRC here in New Mexico. They are flat,” said Ferris. “We haven’t had a rate change here since 2016, and the one prior to that was in 2009.
So while some LCEC customers have noticed higher bills than usual, higher rates aren’t to blame.
Our members’ bills go up and down because of usage, not because of a rate changeBobby Ferris, LCEC
Lea County Electric doesn’t serve everyone in Lea County, however. The largest city in the county, Hobbs, is serviced by Xcel Energy, a national company which operates in eight states. Their own rate story is a bit more complicated.
Like LCEC, Xcel’s service in New Mexico is regulated by the NMPRC. However, Xcel customers have been receiving mailers notifying them of a rate increase. While the timing of this rate increase coming shortly after the Texas Energy Crisis might seem suspicious, the increase had actually been planned for some time before. Xcel Energy has gone through several rate increases in the past few years in order to pay for new investments in energy infrastructure.
People who do find their electric bills higher than usual may want to check to see if the bill includes an adjustment for fuel recovery costs. Natural gas prices have skyrocketed following the Texas Energy Crisis and those extra fuel costs may start making their way into consumer energy bills as a fuel recovery cost adjustment. However, New Mexicans likely won’t encounter the shock many Texans have with energy bills hitting absurdly high figures.
In the case of LCEC customers, the fuel cost adjustment is currently a credit of 1.2 cents per kilowatt hour. This adjustment is listed as “Power Cost Adj Per Kwh” on their bill. The full ramifications of increased energy costs are yet to be seen, however.
“I do see some impact coming,” Ferris offered, “because of how high natural gas got to be during this, and so much of our generation is fossil fuel based.” It may take a few billing cycles before LCEC has the final numbers to base an adjustment on, and there are credits to consider as well as costs. “Costs will probably be higher due to increases in natural gas prices but will be offset by the energy that was produced by natural gas during the same period of time. I don’t know yet what the delta between those numbers is,” Ferris explained.
The most likely reason people are seeing unusually high energy bills in New Mexico is because of unusually high energy usage due to the prolonged cold spell. Southeastern New Mexico is not used to getting very cold during winter, and certainly not for several consecutive days. Heating appliances generally use quite a lot of energy too. So while someone might run their heater or an electric blanket for an hour or two a few days throughout the winter, it’s a very different thing to have them running several hours non-stop day after day.
Ferris noted that space heaters were sold out in many stores in the area due to the extreme cold. People didn’t need these solely for comfort, though. Keeping pipes from freezing was a big concern, particularly among folks with their own water wells, and livestock and pets too would require extra attention to survive the harsh cold.
Electric bills typically include a usage chart so customers can see how their usage in the billing cycle compared to previous months. Most likely if you were running heaters through the prolonged period of intense cold, you’d see much higher usage for that period.
If you don’t think usage accounts for the increased cost, or think your usage seems higher than it should be, you should contact your utility provider. Perhaps a mistake was made or maybe a faulty appliance is draining extra electricity. But for this last cycle at least, the high cost of energy and increased rates aren’t to blame.
