PRC fines on co-op discussed at prehearing conference

Representatives from Socorro Electric Co-op (SEC), the City of Socorro, and the New Mexico Institute of Mining and Technology (NMT) attended a prehearing conference on June 10 before the New Mexico Public Regulations Commission (NMPRC) in the matter of noncompliance fees for the SEC.

In the order setting settlement discussion guidelines issued on June 18, the hearing examiners for NMPRC, Christopher Ryan and Jocelyn Barrett, offered findings and conclusions.

During the prehearing conference, hearing examiners reported that the parties involved acknowledged the long and complex history of the matter. The NMPRC staff and SEC counsel aimed to resolve the matter without initiating a formal proceeding or holding a public hearing. The parties discussed recent leadership changes at the SEC and expressed a commitment to resolving the issue and adhering to the commission’s orders in the future, according to the order.

During the conference, SEC indicated they contacted the City of Socorro and NMT, who agreed to attempt to settle the matter. Hearing examiners indicated they would be willing to grant a request for a two-month period for parties to engage in settlement discussions.

NMPRC hearing officers gave the parties until Friday, August 15, to engage in settlement discussions to resolve the matter to the NMPRC’s satisfaction without a hearing process. They also ordered the SEC a deadline of July 11 to file a status report to the NMPRC.

The order included a status conference scheduled for August 25 to be attended by all the parties. Any proposed agreement presented at the August conference are required to address four issues identified by the NMPRC, including a determination of a reconciliation amount and method, a mechanism for recovering the fine and corrective actions that do not unduly burden member customers or alternative actions in lieu of paying a fine which would benefit SEC members, a plan to correct the rates and reconciliation for the period of noncompliance. If the settlement recommends disgorgement, the agreement must recommend whether any disgorgement should offset the penalties, states the order.

According to the order, if the issues are not adequately addressed in the proposed settlement agreement or if it is in any way unsatisfactory, the agreement will be rejected, and further action will be determined at that time.

Post meeting comments

Socorro Mayor Ravi Bhasker gave an update on the PRC and SEC during the June 17 city council meeting.

He said the PRC signed an order against the SEC with a $985,000 fine.

Bhasker said the conversation isn’t just about the fine; It is also about economic development rates, solar and what the city can expect from SEC in future.

“In the long run, the fine is going to end up coming out of our consumer’s pockets, and we can’t have that. And there’s also an indication that the co-op might want to raise rates again.” Bhasker said, “We’re going to have that meeting on the 25th, that will be a lawyer-client meeting. So it’ll be confidential. I’m just giving you the meat of what we’re looking at.”

He also spoke to the improved relationship since Manuel Gonzales took the CEO position at the SEC.

“Mr. Gonzales has made great strides in our relationship. There’s no doubt about it, and he’s been open about everything and has shared stuff with us,” Bhasker said.

Delilah Walsh, vice president of administrations and chief financial officer at NMT said they are hopeful for a positive outcome in ongoing discussions on SEC rates.

“Our representatives participated in the June 10th prehearing conference, which initiated a two-month period for settlement discussions aimed at resolving the matter without formal proceedings. During the conference, SEC expressed a desire to resolve the matter and adhere to Commission orders going forward. This willingness to engage in settlement discussions with intervenors to address the Commission’s specific issues and goals was reiterated by all parties,” Walsh said in a statement.

Manuel Gonzales, CEO of the SEC, also expressed a positive outlook on the meetings.

“SEC has a new leadership team in place who are looking forward to listening to all parties’ concerns, working on a timely resolution and focusing on how we can serve our members,” Manuel Gonzales, CEO of SEC said after the conference, “Cooperative leadership puts their members first in all we do, it’s that simple.”

Brief history on the PRC and SEC

In May 2025, the New Mexico Public Regulation Commission (PRC) unanimously appointed co-hearing examiners to explore how Socorro Electric Cooperative (SEC) can repay fines without unduly burdening its members. PRC associate general counsel Erika Avila Stephanz clarified that the hearing’s focus is on repayment methods, not on whether SEC violated any orders.

In December 2018, SEC announced a proposed 5% rate increase aimed at raising $1.25 million. However, after member objections, the PRC rejected the proposal, noting that the increase served board objectives rather than an actual financial need.

In June 2024, the New Mexico Supreme Court ruled that rural utility companies, including SEC, are subject to PRC rate regulation, clarifying that there is no distinction between rural cooperatives and other public utilities regarding the commission’s authority.

During a November 2024 meeting, Commissioner Aguilera suggested that forgiving SEC’s fines could set a precedent since the commission ordered compliance and the company refused.

The PRC said it would base its decision on three factors an accounting of mis-collected amounts, SEC’s proposed corrective plan, and justification for not facing fines.