At Week's End; 305; PNM and the Effect of Proposition 2

You You You Tonight at Weeksend looks at the passage last week of proposition two by you the voters city hall must now acknowledge the voters wishes

to seek the lowest cost electric power supplier for Albuquerque how will this addition to the city charter affect the current franchise with public service company of New Mexico and on weeks review Roger Morris and fellow journalists examine New Mexico's economy education and the problem of drugs in our state next at Weeksend Good evening. I'm Neil Boggs at Weeksend for nearly 70 years public service company of New Mexico has been Albuquerque supplier of electricity but a recent amendment to the city charter could in that relationship proposition two approved by 56% of the voters requires that the city seek the lowest cost electric supplier PNM's current 25 year franchise agreement with the city ends in 1992 in the past this agreement has been automatically renewed now however the contract will be awarded to the lowest bidder

The new city charter amendment won't exclude PNM from bidding but it will mean the company will have to fight to protect its franchise and company officials say PNM will quote fight to the death to do just that unquote tonight we are joined by PNM's director of communications Don Begley Mr. Begley welcome PNM will fight to the death would you explain that is it truly a question of the company's survival or is that what is that what we should infer from it? I think the important thing to realize is about Prop 2 is that it's the latest in a long series of events the city council has already appropriated over a million dollars looking at PNM's franchise and PNM related issues so to us Prop 2 says yes we will be held accountable there are some people who are saying in the media and one of the newspapers here has editorialized that what the city should do is throw PNM out of the community regardless we will fight to the death against the theft of our property through a condemnation of that nature

then PNM has already decided by what you say am I to take it that it would not be willing to negotiate for the transfer of lines and polls and so forth along the rights of a way if it came to that what we have to do is put out the best bid we have to win the confidence of the city and we have to win the franchise bidding process that we're looking at today and that's our first objective we suggest it unless I misunderstand you that someone is out to get PNM what I said was that we have heard or through the newspapers reading and we've seen a newspaper editorial saying essentially get PNM out of town and then we'll figure out what we do next when that question arises of a government takeover of public service company then we have to defend our investment we have to defend our property just as any homeowner would defend his house if the city wanted to take that house to build a wider street or something of that nature

but do you think that submitting it to the requirement of a bidding process equates a takeover by government? No not in the slightest not at all what I see what I'm suggesting is that there are other parties who have a broader agenda than just lowest price electricity rates for Albuquerque and that's the context of the fight to the death quotation we have been in this town you said almost 70 years in fact at 72 years and we'd like to be here another 72 years we know that in order to do that we have to be the provider of choice for the people of Albuquerque on the question of survival is the company survival at stake on this issue? Well Albuquerque is certainly our largest single sales 60% of our revenue has come from Albuquerque that's why it's important to us from a business perspective to stay here but it's also important to us from a community perspective

we live here many of us have been born and raised here this is our home and we'd like to continue to do business in Albuquerque the campaign to retain the franchise what form do you see that taking what more can you do beyond offering best service at best price? I think that's the bottom line I think the issue is for us to continue to serve our customers and to improve it every way we can we've opened in the past two years neighborhood offices all around the city of Albuquerque to get closer to our customers and be more convenient as an example of the things that we think we need to do I think you have to quote the phrase a few years ago then won the hearts and minds of people on this issue? Well I think that we are known by our customers as providing good service there is obviously a lot of contention about the price that we charge for that service so what we have to do is establish through the city council franchise negotiations or through our own customer to customer contacts the credibility that we need to show that our price is the best price for the services

Confidence and to some degree credibility seem to be in question this time a year ago a little less than a year ago do you think that has been restored that you'll have the public support that would apply pressure to the decision makers on this issue? Well not so much a matter of applying pressure to the decision makers the voters voted on proposition two the customers vote when they come to us for services it's a matter of us establishing to those individuals all of the people of Albuquerque that we are the best by that we are the provider of choice and yes to answer your question I think that we have improved in our relationships with our customers over the past year I think that yes there's still questions about us we laid off 800 people 799 people a year ago no business can do that without having that shake its roots as in it did shake us but we're growing from that One of the parts of that campaign was the salary cut salary withdrawal almost that Mr. Guy's the president's PM took has that been restored no that's a one-year reduction in salary and after that the Board of Directors will have to review the company's performance

and set a salary as they do every year so it might be withdrawn again I can't speak for the Board of Directors they have to look at our company's performance conditions they have to look at how well we've done you touched on rates along with service and the quality of the service some people are still not convinced though that they're getting a good buy from piano on rate there seem to be some disparities in some of the numbers I've heard it said that the nine cents a kilowatt cost for electricity here is considerably above the kilowatt per hour cost and other sections we are a high-priced electricity company in Albuquerque there's no doubt about that we are not the highest although many of our critics like to try to paint us into that not the highest in the country not the highest in the state not the highest in the country not the highest in the southwest but nine and a half cents a kilowatt hour is one of the higher prices per kilowatt hour one of the things that we have said in the past is when you compare the check that is written

in fact the bill that is paid by an Albuquerque resident for their electricity is one of the lowest in the southwest not trying to take credit for a climate which is the primary contributor to that but the polls and the wires and the transformers and the meters all cost the same in Albuquerque as they do in Phoenix if you're selling more kilowatt hours in Phoenix you're spreading fixed costs over a bigger base and the unit cost goes down but we're talking here about a bill that's right paid by a customer as opposed to a rate charged by a company but that comparison is that based on an equal level of service in two areas for example if we were heavily dependent on air conditioning here as they are in so many other areas and it has some of the other uses wouldn't it be likely though that our bill would be much higher than the national average or bill now or monthly bill no I think what would happen would be the rate would go down because now we're spreading the costs over more kilowatt hours any business has a certain piece of pie that isn't some of all of its costs and when you divide that piece of pie up into large pieces the pieces are bigger

small pieces they're smaller I mean that's a strained analogy I realize but the idea is fixed costs in business terms spread over lots of kilowatt hours is smaller per unit back to the campaign that the company will wage to retain the franchise what form is it going to take a few months ago we saw a very high intensity high visibility personalized campaign by Mr. Geist will there be that type of approach again to building confidence and credibility well I think what you're seeing us do right now is what we will continue to do we have to build confidence and credibility individually with our customers again whether it's at our neighborhood offices whether it's in the quality of service we provide or in the advertising that we do do and we have been advertising on television we advertise on radio we advertise to a small extent in newspapers but that's the type of thing that we would continue to do and the bottom line is us with our customers directly

we have less than a minute remaining quickly if we can all of this has to take place and barely over two years there's been speculation that a legal battle might result can you see one being avoided oh absolutely I can see a legal battle being avoided obviously I'm biased I think we're a good company I think that we provide good service to our customers if we do our job of showing that there's no need for a legal battle we've done a good job I believe for 72 years and I think that we can continue to do that but we have to do our job very quickly though you had indicated that you felt it was an attempt to confiscate property wouldn't that in itself necessitate a legal battle if you continue to see it that way well we have critics we've had critics for a long time and they're not going to go away regardless of how good a job we do our job though is to realize that the critics are a minority and the customers are there thank you very much Don Begley director of communications for public service company in Mexico next a discussion of some other crucial issues affecting New Mexico

Roger Morris is joined by two other journalists for week's review a discussion of the important news stories of the week in New Mexico a look behind the headlines and a look also ahead at what may be coming up next week with me this evening is Kathy Robbins a distinguished New Mexico journalist contributing writer to the New York Times and Fred McCaffrey long time political columnist and now author of Roundhouse Watch for the Santa Fe reporter Fred we had an interesting new idea surface this week in gubernatorial politics not not the usual fodder of the campaign I'll be on the realm of what we've been getting and it came from Paul Bartykey

and it came for a very good reason he's beginning his campaign and he wanted to put something concrete out there and challenge all the others who want to run for governor to put their ideas out there and what he's suggesting is that we use money from the Severance Tax Fund to fund educational reform you know the Severance Tax and how it goes we established it because we thought we take things out of the ground that are irreplaceable and we ought to take some of the money that comes from that and save it for future generation so we've put away about $1.4 billion so far and it throws off interest every year 123 million I think this year which we can use to build highways and buildings also usable by the future otherwise it's just sitting there it's the corpus is untouchable once the money gets into that principle it cannot be touched but we've been diverting half of the sales tax money and using it to issue bonds

for a variety of reasons now Paul is saying of that half that we've been diverting to bonds let's take half of that or 25% of all the Severance Tax and let's use that to pay for especially the reforms in education that we voted several years back but we never have funded them and his plan would get maybe 40 million a year for the schools and he put it out there and he said all right now everybody step up take a look at it, say what you want but then let's hear from you the reforms we voted on there are some school districts that don't want to give these tests because they're not ready to give them yet so we've said yes to the reform we set the testing up and we gave the test and you notice that the kids didn't do notably well not terribly bad but these are 3rd, 5th and 8th graders isn't this an intimidating challenge? I mean isn't education in New Mexico like the weather everybody talks about it and nobody really wants to do anything about it

what's going to be the response to Bardic's idea? I think some people will, Bardic wants to do this by the Constitutional Amendment route because that's the only way you can get a referendum in the New Mexico system is to amend the Constitution and Paul says this is sufficiently serious so that everyone should vote on it. I think some of the Democrats in the legislature especially will be interested and if they don't go exactly the way Paul is suggesting they may come up with some partial use of severance tax money. I suspect that many Republicans, though they're great on education, won't want to see this money grabbed in any way. What's going to be the response from Bruce King and from Ruben Smith and the other Democratic candidates running against Bardic. Will they have their own education strategy now? I would presume that they're developing their own education strategies anyway if Bruce has probably got his pretty well along

but they are now going to have to take the Bardic plan into account at the very least when they tell us what they want to do. In many ways the answers to this are money, money, money and restructure, restructure, restructure. There's no doubt that more money has to go in if you want to raise salaries, make the UNM Library better, that takes money. But the restructure is smaller, all of those things. The restructuring in New Mexico 85% of our educational institutions higher ed are in four year colleges and 15% are in less expensive two year colleges. Nationally in public institutions that ratio was 60-40. I wish it was our ratio. But how can it be as long as the educational agenda is subject to the political agenda? And it'll always be subject to the political agenda. But at least this brings education into the political agenda in a way. It brings it in early, so there's plenty of time to talk about it. I hope it forces people to tell us what they think.

I hope so too. Kathy, this week in quite a different vein, Senator Binghamen issued another of what appeared to me to be now a series of dire warnings from Washington about Graham Rudman, in this case, and about the impact of cuts in federal spending on the New Mexico economy. What he's talking about, if Graham Rudman cuts are put into effect for fiscal year 1990, we're talking about 3,000 jobs at Los Alamos, San Día, White Sands, Alamogordo, those are gone in 1990. On November 2nd, the congressional negotiators have come up with a $305 billion defense budget, which dramatically reduces Star Wars and other programs that New Mexico is interested in. There's a corresponding event that occurred in the past week. And I know this is very, very far away, but you know, and if you've been around all week and all of us have how exciting the events in Germany have been. There's already talked, Arthur Laffer said last night in the Nightly Business Report that we can look to German reunification in five years.

What does that mean for New Mexico? It has some relevance given what the governor said earlier this week on a radio program on K-O-B. If that happens, Germany will be the central economic power in Europe, in a Europe that is in 1992 going to be what Carothers called the economy, the economy for us to deal with. It's amazing that Carothers is talking this way because our focus as you know in this state has been on Japan, the Pacific Rim, about less than a year ago, the British ambassador gave a talk here at Albuquerque. He said, well, before I got on the plane to come here, I looked at my atlas and I noticed that New Mexico was equal distant from Tokyo and London and this kind of gas went through the audience and everyone suddenly realized. So to me it's very interesting that Carothers is pointing that way and saying, it surprises me. It surprises me too. But isn't this the old problem of a kind of overreliance on an international market?

It seems to me, New Mexico governors go off to solicit bus factories from the Japanese or the Taiwanese and now the governor is discovered the New Europe of 1992. Hey, what else have we got there? Well, doesn't economic development really begin at home? I mean, isn't this a sense of false reliance? Yeah, there's another false reliance. Well, it's not completely false because there's $300 billion worth of foreign investment in this country. Everyone thinks it's Japanese, Japanese. The Japanese only have 16% of that pie. The rest of it, 70% of it, is European and Canadian. Yeah, 25% is Brit. The Dutch are bigger investors than the Japanese. Is that true New Mexico? This is the country. And we're going to get a piece of that. But there's another kind of false reliance that appeared today, this week again in the Albuquerque Journal, Senators Bingham and Domenici are a co-sponsoring legislation to free up the technology from the labs for peacetime purposes, pieces breaking out all over a theme.

You know, let's wave the flag. But how much of that is New Mexico going to get? I just saw a report that the oil technology, the oil recovery technology partnership, which has been an existence for a year at Sandia, Los Alamos, and the DOE field office in Bartlesville, Oklahoma, has just finished its first year. The purpose of this project is to spin off from defense to about a dozen private companies, technologies for oil recovery. Two of those companies are New Mexican. But again, it's a tie-in between defense and the traditional kind of mineral exploration and development, which we've been burned by. Which is not the wave of the future. It seems to me that we have a... That's another myth there. Yeah, one of the great failures it seems to me of the New Mexico media is to report accurately and lucidly what really is working out there on the frontier, what is succeeding in terms of small enterprise,

new enterprise, future enterprise beyond the old traditional industries. To report it, you must first know it. You must know it. You must get those stories. You notice that Senator Domenici says that he thinks just figures it too tough, and he's trying to put a damper on it because he doesn't want to... He thinks things are not that good. And once, for one of these senators, when confronted with a new juicy contract for Kirkland, to just say no. Yeah, I'd like... We need a diverse... I hope I'll have my mom. Yeah, if I don't... Just say no. Let me confront you with a juicy, relatively hidden story, which surfaced again this week and came up only short time for breath and then dove back down again. Part of a major drug bust, one of the largest drug busts in the United States, took place in California some weeks ago. There was a tide in New Mexico. We were told by the federal authorities that substantial amount of drug money was being laundered in Riyodoso, Riyodoso, and New Mexico Banks involved in this.

Now we hear that there were land investments. The IRS is interested in large estates down there, which had a role in laundering of money. Isn't this story symptomatic of a very large, unreported iceberg, which exists in this border state involving international crime, international drug trafficking, maybe arms trafficking, a lot that we're not reading about in the New Mexico press, which has been true for some time now in New Mexico. For instance, it's been said very clearly that probably part of that cash in Los Angeles had been warehouseed in a New Mexico warehouse and in another one probably outside of El Paso en route to Los Angeles, which implies that that whole channeling system had been set up, not just you don't casually drive up with a truck and say, I want to rent you warehouse. So, yes, we're not just talking about a few little packets carried across the river by wetbacks.

We're talking about big time and we're talking about the big boys. And boys are serious. And crime in New Mexico is not what it appears to be necessarily on all the Albuquerque television stations, that is a murder in the South Valley, or in the Northeast Highlands. Those things are. Crime is as big time and sophisticated here as it is in New York or Chicago or California. And that's a story, my friends, which is not being reported very well by the New Mexico press. Yeah, very interesting when you talk about the New Mexico press newsweek. The one that just arrived today has a map of the United States. Where the different cartels are, which state? And there are four cartels operating in Arizona if the map, if I remember the map, I don't remember how many in Texas. They have none operating in New Mexico, which I said why? I wish I thought they were. You're not. But as you talk to customs officials or to people who are involved on the firing line here on the frontier of this battle, they will tell you we have one of the most porous borders in North America.

They'll tell you that Albuquerque is in some ways an open city in terms of trafficking. And of course, if you talk to people in Latin America, they will say we're also one of the jumping off points for the CIA's covert arming of operations south of the border. So that this is not this innocent refuge that we often think of ourselves as being. But think of where other drug buses are being made. Lancaster County, Pennsylvania. Talk about isolated areas in the world. Pastoral, pastoral places. Of course, these guys are going to pick these places because we're all asleep, or not we are, but these places are asleep. But part of that synomialence is the New Mexico press. Isn't it true that law enforcement and the other authorities at the state would be more responsive if this was more a matter of public knowledge? I keep ringing in my mind that line. This is not your father's old movie. And this is not yesterday's New Mexico. But this reminds me, a few years ago, there was a big story about the illegals coming up in these cars and in trunks of cars.

And they found this big operation operating here in New Mexico. Well, I did a story on that for the times. And in doing the story, I went down to Berlin and I talked to people there. And those folks all along the railroad tracks, the people who lived there, and even up in Lamy, because that's where one of the stops was, the people who lived around the railroad tracks in Lamy, they see these people all the time. No, no, no, no, no, no, no, no, no. And suddenly there's this bust out of the blue. There's the New York Times getting interested, but they've known it all. Well, the local papers did have some stuff on it too, but they did stories on it. But the local papers waited for the bust, just instead of... Yeah, that's right. Can't afford to wait for these things to explode in our labs. Let's talk about exploding stories very briefly next week or the week beyond. Fred, anything important in Santa Fe? And a part year of Bill Sigo from the Republican Gubernatorial Campaign is interesting, because it frees up a lot of people who would have been Sigo voters

and who are now going to be scrambling around trying to find their place. And it looks like they're only going to have two choices, Frank Bonn and Les Houston. And will Houston declare? I guess... Houston is going to declare, I think, tomorrow or the next day, yeah. And that leaves us basically a two-may-night... Frank hasn't declared yet, but he says he's going to... So Bonn and Houston on the whole... That I think is the way we're going to end up. Kathy, anything important in Albuquerque or in the economy for that man? Well, I think some big stories coming up. One is what Savagra is going to do in reorganization. If you look at his transition team, it's a repeat of his campaign structure of the old guard... Which we talked about on this program. Well, there must be a half a dozen... Just like clockwork. It was just like clockwork. There must be a half a dozen people from the Rusk and Kenny Mayoraltees who are part of the transition team. How many of them will survive into the actual new city government is going to be interesting to watch. And I think in the next few months, another story we better keep our minds on now

that the Centennial Hoopla is over at UNN. Is the search for the President in the U.S. That's going to happen. Let's follow that one in the future. Thank you, Kathy Robbins and Fred McCaffrey. If you wish to express your views about our program, please write us at Weeksend K-N-M-E-TV, 1130 University Boulevard Northeast, Albuquerque, New Mexico, 8702. Join us next week when we look at the lack of adequate prenatal care in New Mexico. New Mexico has repeatedly scored worst in the nation in the percentage of women receiving prenatal care. And experts say reform is necessary. Until then, I'm Neobogs at Weeksend. Good evening. Good evening.