Exhibit 10.132


    
      
        

      

    

    EXHIBIT
      10.132

    
BEFORE
      THE NEW MEXICO PUBLIC REGULATION COMMISSION

    


    
      	
              IN
                THE MATTER OF THE APPLICATION OF

            	
              )

            
	
              PUBLIC
                SERVICE COMPANY OF NEW MEXICO

            	
              )

            
	
              FOR
                APPROVAL OF A CERTIFICATE OF 

            	
              )

            
	
              PUBLIC
                CONVENIENCE AND NECESSITY FOR

            	
              )

            
	
              A
                141 MW COMBUSTION TURBINE UNIT AND

            	
              )
                Case No. 05-00275-UT

            
	
              THE
                CONVERSION OF THAT UNIT TO A 272 MW

            	
              )

            
	
              COMBINED
                CYCLE GENERATOR.

            	
              )

            
	 	
              )

            
	
              PUBLIC
                SERVICE COMPANY OF NEW MEXICO,

            	
              )

            
	 	
              )

            
	
              Applicant.

            	
              )

            
	 	
              )

            


    

    


    


    STIPULATION

     

    Public
      Service Company of New Mexico (“PNM”); the Staff of the Utility Division
      (“Staff”) of the New Mexico Public Regulation Commission (“NMPRC” or
“Commission”); the New Mexico Industrial Energy Consumers (“NMIEC”), Patricia
      Madrid, the Attorney General of the State of New Mexico (the “AG”) and the
      Coalition for Clean Affordable Energy (collectively the “Signatories”), through
      their undersigned authorized representatives, agree and stipulate as
      follows:

     

    INTRODUCTION

     

    1.  On
      July
      6, 2005, PNM filed an Application with the Commission seeking authorization
      to
      (a) operate as public utility plant the existing gas-fired combustion turbine
      located near Afton, in Dona Anna County, New Mexico (the “Afton CT”) which PNM
      is currently operating as a merchant plant; (b) convert the Afton CT to a
      gas-fired combined cycle generator (the “Afton CC”) that would expand the
      capacity of the plant and allow it to serve all jurisdictional customers on
      PNM’s system (collectively the Afton CT and Afton CC are referred 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    to
      as the
“Afton Facility”); and (c) include in rate base in PNM’s next electric rate case
      the depreciated net book value of the Afton CT and the actual cost up to $141.8
      million for the Afton CC conversion. PNM’s Application requested a total value
      for the Afton Facility of $211.6 million to be included in rates.

     

    2.  The
      Signatories have arrived at this Stipulation which they believe is fair, just
      and reasonable, and agree that the construction and operation of the Afton
      Facility, pursuant to this Stipulation, is required by the public convenience
      and necessity. In addition to the Signatories, Western Water and Power
      Production Limited; City of Albuquerque; Regents of the University of New
      Mexico; Natural Resources Defense Council; Community Action New Mexico; El
      Paso
      Electric Company; National Nuclear Security Agency; Energy, Minerals &
Natural Resources Department of the State of New Mexico; and People’s Energy
      Resources Company intervened in the proceeding and participated, from time
      to
      time, in settlement discussions.

     

    STIPULATION

     

    3.  The
      Signatories stipulate that PNM’s Application should be approved as provided
      herein and PNM should be authorized to (a) operate as a public utility the
      Afton
      CT; (b) convert the Afton CT to the Afton CC, a gas-fired combined cycle
      generator of approximately 235 MW capacity; (c) include in rate base in PNM’s
      next electric general rate case the cost of the Afton Facility as agreed to
      herein, provided the Afton Facility is in service within eighteen (18) months
      of
      the Commission’s order approving this Stipulation or December 31, 2007,
      whichever is earlier; (d) in the event the deadlines in (c) are not met, PNM
      will only be permitted to recover in rates the net book value of the Afton
      Facility in an electric general rate case subsequent to Afton Facility’s
      in-service date; and (e) receive all other approvals and authorizations as
      may
      be required under the New Mexico Public Utility Act for the issuance of a
      certificate of public convenience and necessity for the Afton Facility on the
      following terms and conditions:

     

    
      
        
        

      

      
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    4.  The
      Afton
      Facility book value for ratemaking in PNM’s 2007 rate case shall be the lower of
      the actual cost of the Afton Facility or $187.6 million.*
      In
      subsequent rate cases, this amount will be adjusted to reflect additional
      depreciation and ADIT from the in-service date of the Afton
      Facility.

     

    5.  Allocation
      of the Afton Facility costs is 50% to TNMP customers and 50% to PNM customers,
      until rates equalize in the 2010 to 2015 timeframe as specified in the
      Commission’s Final Order in NMPRC Case No. 04-00315-UT.

     

    6.  In
      future
      rate cases, PNM will work with the Signatories towards the goal of avoiding
      reinstatement of a fuel adjustment clause. To mitigate risk associated with
      gas
      cost volatility for gas-fired electric generation, the Signatories will support
      PNM’s recovery in base rates of the reasonable costs of prudently hedging its
      gas requirements and otherwise mitigating its gas cost risks. 

     

    7.  PNM
      will
      propose in its next general rate case Application interruptible rates and a
      new
      inverted block rate to absorb any residential rate increase. If it is
      demonstrated that the proposed rate increase to residential customers in that
      case is too great to place entirely in the third block, it will file a
      supporting study and propose an alternative that encourages less consumption.
      PNM will preserve the structure, but not necessarily the rates, of its
      Incremental Interruptible Power Rate for customers currently on that tariff.
      

     

    
      
        
          
            

          

           *
            The
            $187.6 million is exclusive of Accumulated Deferred Income Taxes (“ADIT”). ADIT
            will be treated for regulatory purposes consistent with past rate
            proceedings.

           

        

      

      
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    8.  PNM
      shall
      conduct a feasibility study of Algodones, Person and other load side sites
      for
      future jurisdictional generation, by the earlier of 90 days after any filing
      requesting additional jurisdictional generation or December 31, 2006.


     

    9.  Prior
      to
      the anticipated Reeves’ retirement and/or repowering, but with sufficient time
      for reasonable alternatives to be implemented, PNM will demonstrate the economic
      benefit to ratepayers of Reeves’ retirement and/or repowering.

     

    10.    
      The
      entirety of transmission costs associated with the Afton Facility shall be
      $2.9
      million per year for customers in areas served by TNMP and $3.0 million for
      PNM
      customers through December 31, 2010. In addition, PNM will not seek more than
      $2.9 million in the Afton Facility transmission costs in any TNMP rate case
      filed before December 31, 2010. After 2010, the Afton Facility transmission
      costs will be allocated 50% to customers in areas served by TNMP and 50% to
      PNM
      customers until rates are combined between the two customer groups.

     

    11.  In
      the
      future, PNM will file any applications to include merchant plant in ratebase
      at
      least 36 months prior to the date requested for inclusion in ratebase, unless
      all signatories agree otherwise.

     

    12.  Recognizing
      the importance of environmental, energy efficiency and renewable energy concerns
      to PNM’s facility planning process, in the analysis undertaken to prepare PNM’s
      2007 Electric Supply Plan to be filed on February 1, 2007 pursuant to the Case
      3137 Stipulation, PNM commits to incorporate Integrated Resource Planning
      principles including:

     

    
      	a)  	
              demand
                side management options for reducing energy and peak load,

               

            


    

    
      	b)  	
              an
                assessment of renewable energy alternatives, and

               

            


    

    
      	c)  	
              an
                environmental risk analysis.

            


    

    


    
      
        
        

      

      
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    In
      addition, PNM will also incorporate Integrated Resource Planning principles
      in
      its distribution and transmission planning processes.

     

    13.  By
      January 31, 2007, PNM will file at the Commission an application to initiate
      comprehensive electric energy efficiency programs, which will take into account
      the results of the electric energy efficiency potential study and the appliance
      saturation study that PNM will undertake during 2006 pursuant to the Stipulation
      in NMPRC Case No. 05-00261-UT. 

     

    14.  PNM
      will
      undertake a third-party engineering study to evaluate the potential at the
      Afton
      facility for boiler feedwater pre-heating using renewable energy generation
      facilities that could be constructed at or in reasonable proximity to the
      generation station; however, this commitment does not constitute a requirement
      that PNM would need to acquire additional land and permits solely for the
      purpose of reserving the potential for future renewable energy boiler feedwater
      pre-heating facilities. 

     

    15.  Except
      as
      specifically stated in the language of this Stipulation, the provisions of
      this
      Stipulation have no precedential effect and the Parties do not waive rights
      they
      may have in any other pending or future proceeding and will not be deemed to
      have approved, accepted, agreed to or consented to the application of any
      concept, principle, theory or method in any future proceeding.

     

    16.  A
      Final
      Order issued by the Commission approving this Stipulation will not constitute
      a
      bar to further litigation of issues raised in pleadings and testimony or any
      issues which could have been raised or any other matters which have not been
      specifically addressed by this Stipulation. In accordance with
      17 NMAC 1.2.23.4, by approving this Stipulation, the Commission is
      neither granting any approval nor creating any precedent regarding any principle
      or issue in this or any other proceeding.

     

    
      
        
        

      

      
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    17.  This
      Stipulation reflects a negotiated settlement, and if the Stipulation is not
      executed or is not adopted in its entirety by the Commission, without additions
      or deletions, the Stipulation will be void and any statement made or positions
      taken by the Parties during the course of these negotiations will not be
      admissible before any regulatory agency or court. The Stipulation contains
      the
      full intent and understanding of the entire agreement of the Parties and no
      implication should be drawn on any matter not addressed in the Stipulation.
      There are not and have not been, any representations, warranties or agreements
      other than those specifically set forth above.

     

    18.  This
      Stipulation may be executed in a number of counterparts including by telefax,
      each of which will be deemed to be an original and all of which will constitute
      one and the same agreement. 

     

    Respectfully
      submitted this 30th
      day of
      November, 2005.

    Patrick
      Ortiz

    Gary
      Boyle

    Alvarado
      Square, MS 2822

    Albuquerque,
      NM 87158-2822

    (505)
      241-2896

    (505)
      241-2368 (fax

    portiz@pnm.com

    


    WHITE,
      KOCH, KELLY & McCARTHY, P.A.

    


    


    By: /s/
      Benjamin Phillips 

    BENJAMIN
      PHILLIPS

    REBECCA
      DEMPSEY

    433
      Paseo
      de Peralta

    Santa
      Fe,
      NM 87501

    Phone:
      (505) 982-4374

    Fax:
      (505) 984-8631

    phillips@wkkm.com

    rdempsey@wkkm.com

    


    Attorneys
      for PNM

    



    
      
         

        
        

      

      
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    UTILITY
      DIVISION STAFF OF THE

    NEW
      MEXICO PUBLIC REGULATION

    COMMISSION

     

    By: /s/
      Dahl Harris  

    DAHL
      HARRIS

    Staff
      Counsel

    223
      East
      Palace

    Santa
      Fe,
      NM 87502-2013

    Phone: (505)
      827-7479

    Fax: (505)
      927-6916

    


    


    NEW
      MEXICO INDUSTRIAL ENERGY

    CONSUMERS.

     

    By: /s/
      Steve S. Michel 

    STEVEN
      S.
      MICHEL

    134A
      Martinez Street

    Santa
      Fe,
      NM 87501

    Phone: (505)
      989-1450

    Fax: (505)
      989-8731

    stevensmichel@msn.com 

    


    


    PATRICIA
      MADRID, ATTORNEY GENERAL OF THE STATE OF NEW MEXICO

     

    By: Telephonically
      approved 11/30/05 BP 

    JEFF
      TAYLOR

    Assistant
      Attorney General

    Post
      Office Drawer 1508

    Santa
      Fe,
      NM 87504-1508

    Phone: (505)
      827-6000

    Fax: (505)
      827-5826

    


    


    COALITION
      FOR CLEAN AFFORDABLE ENERGY

    


    Susan
      Innis

    Western
      Resource Advocates

    2260
      Baseline Rd., Suite 200

    Boulder,
      CO 80302

    


    
      
        
        

      

      
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    BELIN
      & SUGARMAN

     

    By: /s/
      Alletta Belin

    ALLETTA
      BELIN

    618
      Paseo
      de Peralta

    Santa
      Fe,
      New Mexico 87501

    Phone: (505)
      983-8936

    Fax: (505)
      983-0036

    belin@bs-law.com
      

    


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