AZTEC — The city of Aztec has the highest electric utility costs in San Juan County, and that's a sore spot for Aztec businesses and residents who pay higher rates than those Farmington and Bloomfield.

But there may be good news in 2016 when Aztec's 10-year contract expires with PNM Electric, the Albuquerque electricity power utility company that provides the city with its power supply.

Currently, an Aztec resident pays just more than 13 cents per kilowatt hour, plus a monthly service charge of $6.44. Businesses in Aztec are charged more, depending on use. Aztec has approximately 3,200 customers who use its electricity. By comparison, Farmington -- which provides electricity to more than 44,000 customers and has many large businesses that use more power -- charges its customers approximately 25 percent less than customers in Aztec, according to Aztec city officials.

"When you're a municipality like the city of Aztec with no generation we have our choice to buy directly off the national electric grid, based on daily market prices or opt into a long-term contract with a supplier like ours with PNM," said Ken George, director of Aztec's electric department. "In 2006, during the height in natural gas costs, we entered into a 10-year agreement with PNM based on natural gas futures at the time. We, by dumb luck or whatever you want to call it, entered into a contract because the projections of buying off the grid (were) going to be more than what we could lock down into a 10-year contract. But that didn't pan out. There was actually only a few months that price was higher than the grid price."

City Manager Josh Ray said officials have tried to renegotiate with PNM over its rates.

"We've met with PNM over the last three years to try to see if there was some wiggle room, but no matter what, they have not been willing to budge an inch," Ray said. "Any change would be great (that would) give a benefit to our customers. It's gotta happen. Unfortunately, until 2016, it's out of our control."

When the contract expires in 2016, the city hopes to secure a lower rate with PNM or to get power directly from the Farmington Electric Utility System, Ray said.

"At this point, it'd be better for us if we buy direct from Farmington," Ray said. "It's more efficient and beneficial to work with Farmington and ensure 10 years of stability and savings."

Part of those savings would be from not having to pay monthly "wheeling fees" the city pays Farmington to deliver electricity. On average, those charges the city pays Farmington to deliver energy add up to approximately $250,000 each year, or about $70 per customer per year.

"Currently, we have talked with the Farmington about our future needs post-2016, and they have been open to supplying Aztec with power," George said. "We're going to do our due diligence and get the best rate for customers. If we could get a contract with Farmington without wheeling fees, it'd make a win-win for the two utilities."

Power the city purchases from PNM is transmitted from Albuquerque to a Western Area Power Administration substation in Shiprock, where high-transmission voltage is reduced from more than 200,000 volts down to 115,000 volts. Then, the power moves to the Bergen substation in Bloomfield -- which is part of the Farmington Electric Utility -- and the voltage is reduced again, to 69,000 volts. It then is delivered to Aztec, where the voltage is lowered a final time to 12,500 volts for distribution to homes and businesses. Wheeling fees are paid at each stop along the way.

"Any transmission of electricity results in losses -- watts lost -- which are also factored into rates," George said. "It gets really complicated. Energy isn't cheap. We preach conservation."

George admits living up to that charge can be dicey at home. His wife, Delain George, oversees the city's utility department.

"If I leave the lights on or the water going on the lawn, Delain tells me, 'Shut it off,' because she runs all the city's utility billing," George said. "But I tell her, 'Hey, I'm just paying myself.'"

IF YOU GO

Need help paying your electric bill each month? For information on the Aztec Utility Assistance and Low-Income Home Energy Assistance programs, call 505-334-7670 or go to www.aztecnm.gov/utility/office.htm .

To contact the electric department, call 505-334-7667 or go to www.aztecnm.gov/electric/department.htm

James Fenton covers Aztec and Bloomfield for The Daily Times. He can be reached at 505-564-4621 and jfenton@daily-times.com. Follow him @fentondt on Twitter.