Alamogordo Town News Investigative Report: PNM’s Alleged Over Billing Scheme Exposed, Overcharging Residents by the Thousands

Alamogordo N.M. - An investigation by 2nd Life Media Alamogordo Town News has uncovered evidence of an alleged systematic over-billing by Public Service Company of New Mexico (PNM) affecting customers across the Alamogordo region. Multiple residents have reported improper rate-tier charges following the utility’s July 2026 billing disruptions, revealing a pattern that regulators say could potentially represent hundreds of thousands of dollars in overcharges.

This is not an isolated case.

Over the past two weeks, our newsroom has received complaints from dozens of households in Alamogordo and Ruidoso reporting nearly identical billing anomalies—all stemming from the same period when PNM failed to conduct timely meter readings due to staffing shortages. The excuse given by the PNM call center staff is that the area had staffing shortages with meter readers and that they say estimated many  people’s bills. 

This is not an isolated billing error.

Over the past two weeks, our newsroom has received complaints from multiple households in Alamogordo, Ruidoso, and surrounding areas reporting nearly identical improper charges, all stemming from PNM's July 2026 billing disruption period.

PNM confirmed that it operates 8,764 meters across the Alamogordo and Ruidoso areas.

 If even a portion experienced the same over billing pattern documented in this investigation, customers in this region alone have been overcharged by hundreds of thousands of dollars.

THE BILLING SCHEME: STEP-BY-STEP

To understand how PNM may have systematically overbilled customers, we analyzed an actual bill from an Alamogordo resident and cross-referenced it against PNM's own published rate schedule which shows the discrepancy. 

What the Customer Actually Used:

• Total consumption: 2,397 kilowatt-hours (kWh)
• Time period: 62 days (approximately 2 standard billing months)
• Average per month: 1,198.50 kWh

This is a straightforward, normal amount of residential electricity usage for a two-month summer billing period in southern New Mexico.

The Actual Rates on PNM's Bill:

PNM's tiered rate structure (Residential Rate 1A) clearly shows three pricing blocks:

• Block 1: $0.0896783 per kWh (for first 930 kWh per month)
• Block 2: $0.1486546 per kWh (for next portion of usage)
• Block 3: $0.1994661 per kWh (for highest consumption tiers)

This tiered structure is designed to encourage conservation—the more electricity you use, the higher rate you pay on incremental usage.

What PNM Actually Charged:

Instead of calculating charges across two separate billing periods, PNM consolidated all 2,397 kWh into a single bill and applied rates as follows:

What PNM Should Have Charged:

According to PNM's own tariff requirement, stated in their response to regulators:

"If your bill includes more than one month of service, your energy usage will be spread across the applicable billing months before charges are calculated."

When properly split across two 30-day billing periods, the same 2,397 kWh should have been charged as follows:

HOW THE SCHEME WORKS

The overcharge mechanism is elegant in its deception:

By consolidating two months of normal usage into a single billing statement, PNM artificially pushed 537 kilowatt-hours into Block 3 pricing territory when, under normal billing procedures, the customer would never have reached Block 3.

Here's the critical difference:

• Customer's actual monthly consumption: 1,198.50 kWh per month
• Block 3 threshold per month: Never reached (customer stays in Blocks 1-2)
• Result of two-month consolidation:2,397 kWh pushed into Block 3
• Block 3 charges imposed: $107.11 for 537 kWh at $0.1994661 per kWh

The customer was charged the highest tier rate for electricity they used across two normal billing months. Under proper billing, those same kWh would have been charged entirely at Block 1 and Block 2 rates.

The $107.11 Block 3 charge is the core of the overcharge. Additionally, customers were charged $138.25 for 930 kWh in Block 2 when, if usage had been properly distributed, only $79.84 in Block 2 charges should have applied across both months.

A PATTERN AFFECTING HUNDREDS

When we began investigating this case, we contacted multiple residents who had filed complaints about July-August 2026 bills. The consistency was striking:

• Eight of twelve customers interviewed reported bills covering more than one month
• Seven of those eight reported charges in all three rate tiers (Block 1, 2, and 3)
• Six reported never previously having Block 3 charges on any recent bills
• All reported that PNM's response was to offer a payment plan on the inflated amount, not a correction

"They kept saying the bill was correct because I used the power," one resident told us. "I did use the power—over two months. But they charged me as if I used it all in one month at premium rates."

"When I showed them my math, they offered to split it into two payments. They didn't fix it. They just made the overbilling more convenient for me to pay," said another.

THE SCALE OF THE PROBLEM

PNM's own disclosure reveals the scope:

Up to 8,764 meters in Alamogordo and Ruidoso areas could have been affected by delayed or estimated billing during the July 2026 disruption in staffing.

Conservative estimates of the impact

In the Alamogordo and Ruidoso areas alone, customers may have been overcharged by $130,000 to over $500,000 if the scenario above is widespread.

If similar practices occurred across PNM's broader New Mexico service territories during this billing disruption period, the statewide total could easily exceed $1-2 million in customer overbilling.

PNM'S RESPONSE: INADEQUATE AND MISLEADING

When the complaint was escalated to the New Mexico Public Regulation Commission (PRC), PNM's written response promised what it had already failed to deliver.

What PNM promised in writing:

"If your bill includes more than one month of service, your energy usage will be spread across the applicable billing months before charges are calculated. This helps ensure you are not billed as though all usage occurred in a single month."

What PNM actually did:

Rather than recalculate charges with properly distributed usage, PNM offered only to split the inflated bill into two equal payments of approximately $240 each in the example scenario above and similar accounts as per other customers we have spoke to. 

This is not a correction. This is not a refund. This is asking the customer to pay the inflated amount on a convenient payment plan.

"It's as if someone overcharged you $58 on a bill, and when you complained, they offered to let you pay it in two installments. The problem isn't solved—it's just deferred,"said one regulatory analyst.

THE ACQUISITION TIMING: A CRITICAL QUESTION

The timing of PNM's overbilling raises red flags for regulators and consumer advocates.

PNM is currently in acquisition negotiations. The utility is being evaluated as a potential acquisition target by larger utility company and the acquisition has been under regulatory scrutiny. During these negotiations, and review by regulators and legislators PNM's financial statements, revenue reports, and profitability metrics are under intense scrutiny.

Systematically overbilling thousands of customers during this exact window could potentially:

• Artificially inflate reported revenue during a critical evaluation period
• Boost apparent profitability when those numbers are being reviewed by acquisition bidders and regulators. 
• Misrepresent the company's actual earning capacity to potential investors
• Constitute consumer fraud affecting thousands of ratepayers simultaneously

"If there's systematic overbilling occurring during an acquisition evaluation period, that's material information," said one utility industry observer and consumer advocate. "It could potentially mean the company's reported financial performance may not reflect actual, sustainable earnings. It raises questions on whether this is a one off issue or potentially a sustained practice of over-billing.  Customers may have been inflating the company's revenue to benefit acquisition bidders if this issue is widespread or has existed not as an isolated case.”

The coincidence—that meter reading failures, billing consolidation errors, and improper rate tiering all occurred simultaneously during the company's sensitive period of trying to close an acquisition —raises questions about whether this was negligence, systemic failure, or something more deliberate. Time, investigations and transparency will tell rather this was isolated or systematic. 

REGULATORY RESPONSE

The New Mexico Public Regulation Commission has formally documented complaints filed by multiple Alamogordo and Ruidoso residents. Commission staff are examining PNM's billing methodology during the affected period and are allegedly requesting documentation on how the utility calculated charges for consolidated multi-month bills. Alamogordo Town News has asked for details of any investigations and is filing an IPRA for more details. 

The New Mexico Attorney General's Consumer Protection Division has also been notified and is allegedly reviewing the matter, Alamogordo Town News is seeking more information. 

Both agencies have broad authority to:

• Order a comprehensive audit of all PNM bills issued during the disruption period
• Mandate refunds with interest to all customers found to have been overbilled
• Assess civil penalties against PNM for tariff violations
• Require systematic reforms to prevent recurrence
• Investigate whether the overbilling was intentional, negligent, or part of broader misconduct

If systematic overbilling is substantiated, isolated and or widespread the Attorney General could pursue additional remedies under consumer fraud and unfair business practices statutes.

WHAT EXPERTS SAY

Utility billing experts we consulted were unanimous in their assessment:

"This is a clear tariff violation," said one regulatory analyst with 20 years of utility oversight experience. "PNM's own rules require that multi-month bills have usage spread across the appropriate billing periods for rate calculation. The company did the opposite—it consolidated usage to push customers into higher tiers. That's not a clerical error; that's a structural problem."

"When you consolidate two months of normal usage into one bill, you're essentially gaming the rate structure. The tiered system is designed to charge different rates based on monthly consumption patterns. By combining months, you destroy that design and artificially inflate rates. Every customer affected should receive a refund," observed another expert.

A third observer focused on the timing: "The coincidence of this overbilling occurring during acquisition negotiations and regulatory review is troubling. Regulators need to ask whether this was a deliberate revenue-boost strategy or a systemic failure. Either answer is problematic."

THE QUESTION FOR REGULATORS

As the NMPRC and the Attorney General's office begin their investigations, a central question emerges:

Was this an isolated software error affecting a few hundred customers, or does it represent a systematic practice that affected thousands?

And more troublingly: Did PNM benefit financially from this overbilling during a period when its acquisition value was being determined?

The answers will determine whether this becomes a modest billing correction or a major consumer protection scandal.

HOW TO FILE A COMPLAINT

If you received a PNM bill in July or August 2026 that included more than one month of service, or if your bill showed unusually high charges in Block 2 or Block 3 rates, you may have been overbilled.

New Mexico Public Regulation Commission:

File a formal complaint at:www.prc.nm.gov

Or  call: (505) 827-7500

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