Socorro Electric Co-op say they will pay members back for non-compliance rates

The Socorro Electric Co-op (SEC), the City of Socorro and New Mexico Tech (NMT) are close to finalizing an agreement that requires Socorro Electric Co-op to refund members about $600,000 they were overbilled during a non-compliance period with the New Mexico Public Commission (NMPRC).

In a status conference on Friday with attorneys for SEC, NMT, the city and NMPRC Hearing officers the discussion highlighted the collaborative efforts to reach an agreement after years of conflict.

NMPRC hearing officer Jocelyn Barrett said the meeting was informal, not on the record and meant to facilitate resolution without litigation. What was said at the meeting would not be binding on parties or the PRC.

“We believe, on behalf of the Co-op, that we reached agreement with all the parties, and we’re very grateful to the city, the mayor, all the other parties for their work in getting together with us on this issue.” Dan Najjar, attorney for the SEC, said, “This process of seven years, I’ve only been involved the last five months. I think I’ve aged 10 years in that time, but it there’s a lot that has to be unpacked here.”

In a summary of the stipulation, Najjar said the refund to co-op members would be given through credits for current customers and checks for former customers. The stipulation would include changes to be proposed to the cooperative’s bylaws, to be pursued at the next annual meeting, a formation of an advisory committee representing all districts to increase transparency and a new ethics rules will require future board members to commit to compliance.

Najjar said any fine imposed by the commission would be contingent upon compliance for a specified period; if fully compliant, the fine is waived. Also an open letter would be published in the local newspaper explaining how the situation arose and steps being taken.

The attorney representing the city, Keith Herrmann, said the refund and financial figures in the stipulation were calculated jointly by representatives from SEC, the City of Socorro and NMT. There was collective agreement, no dispute about the calculations, and the final numbers were incorporated in the stipulation as a result of this collaborative effort, said Herrmann.

“Generally, we don’t believe a hearing is necessary, and don’t think there’s enough or any undisputed facts right now that would need to be developed for the commission to review and we think an expeditious review and certificate of stipulation will allow all the parties to move forward." Herrmann said.

CEO of the SEC, Manny Gonzales also requested an expeditious review. He said he was anxious to get to work and show all parties that they want to implement the plan.

“I just want to thank everybody. This for me, it’s been kind of a long but short run, but a great run of collaboration,” Gonzales said.

In closing of the conference, PRC Hearing officer Christopher Ryan said in this case the New Mexico Supreme Court was required to answer the question in this matter as to what is the jurisdictional power of the commission over electric cooperatives.

“ It’s a fairly remarkable series of events. And I think even though it often times feels as if the regulatory environment moves at a glacial pace. What I’m hearing you all say is that the end product here has been something of a success. However we got here.” Ryan said.

Hearing Officer Barrett said she was “very pleased” to support the conversations between the parties.

“This is a big deal based on where we started all those years ago, to get to here, and this process itself is very encouraging to us to see and makes us optimistic that the co-op board is going to be able to uphold everything that’s in the stipulation. So we’re looking forward to that.” Barrett said.

The hearing examiners agreed to expedite the process, with testimony due by November 17 and the stipulation to be filed next week.

Brief history of the case

In December 2018, the SEC filed a notice with the NMPRC that it would increase rates by 5% to raise revenue by $1.25 million. State regulators rejected the rate-increase proposal, arguing that the utility wanted the price increase to advance the objectives of its board of trustees rather than needing it financially to operate.

After the meeting Herrmann confirmed the SEC refused to follow the Commission order for 948 days from Sept. 11, 2019, until the Commission approved SEC’s agreement on May 18, 2022.

The case was taken to the New Mexico Supreme court in June 2024 where it was ruled rural New Mexico electrical co-operatives are not exempt from state regulators’ authority over rates. When the co-op rejected the PRC’s findings, the PRC fined the board $1,000 a day for not following its ruling.

In August 2024, SEC CEO Joseph Herrera left the electric co-operative after holding its prime leadership position for 13 years. In January 2025, Gonzales took the position.

In May of 2025 NMPRC voted unanimously on appointing co-Hearing examiners Ryan and Barrett to consider mechanisms for recovering fines accrued by SEC and proper corrective actions that do not unduly burden SEC members.