PNM Agrees to Pay $1 Million to Settle Power-Trading Probe
PNM Resources Inc., owner of New Mexico’s largest utility, has agreed to pay $1 million to end a federal investigation of its electricity-trading practices during the California energy crisis of 2000 and 2001.
Albuquerque-based PNM didn’t violate California’s market rules by moving electricity around the Southwest for power traders at Enron Corp., El Paso Corp. and Morgan Stanley, the Federal Energy Regulatory Commission said in an order dated Wednesday.
The utility owner still faces a lawsuit over its trading practices filed by California Atty. Gen. Bill Lockyer and moved to federal court, PNM said.
Power prices surged during the energy crisis. FERC last July ordered Enron to forfeit at least $32.5 million in profit that was unjustly gained in Western power markets.
PNM collected $5 million in fees for a practice known as “parking and lending” for power traders and received $356,167 from Enron, FERC said. The company said it ended the practice a year ago, according to the commission order.
In parking, utilities agreed to consume power offered by traders on one day and return the same amount of electricity to market the next, PNM spokesman Frederick Bermudez said in an interview.
Lending consisted of delivering electricity one day and consuming the same amount the next.
PNM’s parking and lending actions were beyond the scope of the FERC investigation, the commission said. The payment will absolve PNM of liability for the practice, FERC said.
Shares of PNM rose 28 cents to $28.69. The stock has climbed 13% this year.