HOUSE JUDICIARY COMMITTEE SUBSTITUTE FOR

HOUSE BILL 218

56th legislature - STATE OF NEW MEXICO- first session, 2023

 

 

 

 

 

 

 

AN ACT

RELATING TO PUBLIC UTILITIES; REQUIRING CERTAIN PUBLIC UTILITIES TO PROVIDE AFFORDABLE RATES OR AN ENERGY AFFORDABILITY PROGRAM TO LOW-INCOME RESIDENTIAL CUSTOMERS; REQUIRING THE PUBLIC REGULATION COMMISSION TO ESTABLISH CRITERIA FOR AFFORDABLE RATES.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 62-8-6 NMSA 1978 (being Laws 1941, Chapter 84, Section 42, as amended) is amended to read:

     "62-8-6. DISCRIMINATION.--

          A. No public utility shall, as to rates or services, make or grant any unreasonable preference or advantage to any corporation or person within any classification or subject any corporation or person within any classification to any unreasonable prejudice or disadvantage. No public utility shall establish and maintain any unreasonable differences as to rates of service either as between localities or as between classes of service.

          B. Nothing shall prohibit, however, the commission from approving:

                (1) economic development rates [and];

                (2) rates designed to retain load [or from approving]; and

                (3) energy efficiency programs designed to reduce the burden of energy costs on low-income customers pursuant to the Efficient Use of Energy Act.

          C. Notwithstanding Subsection A of this section, a public utility may make or grant a reasonable preference or advantage to low-income residential customers, and the commission may approve a rate, charge, service, program, classification or facility that includes such a preference or advantage. The implementation of such a commission-approved rate, charge, service, program, classification or facility by a public utility shall not be deemed to subject any person or corporation to any prejudice, disadvantage or undue discrimination."

     SECTION 2. A new section of Chapter 62, Article 8 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] INVESTOR-OWNED UTILITY AFFORDABLE RATES FOR LOW-INCOME RESIDENTIAL CUSTOMERS.--

          A. Each investor-owned public utility shall offer a just and reasonable affordable rate for low-income residential customers.

          B. Each investor-owned public utility shall file with the commission an initial proposed affordable rate for low-income residential customers no later than January 1, 2024.

          C. Each investor-owned public utility shall file its initial proposed affordable rate with an advice notice that is served on all parties of record in the utility's last rate case at the time it files the advice notice with the commission. The filing shall include information showing that the rate:

                (1) is available to all low-income residential customers;

                (2) meets the definition of "affordable rate" as defined in this section; and

                (3) was developed after soliciting and considering nonbinding recommendations on the design and implementation of the rate from interested parties.

          D. The initial proposed affordable rate shall go into effect thirty days after filing, unless suspended by the commission for a period not to exceed one hundred twenty days. If the commission has not acted to approve an affordable rate by the end of the suspension period, the initial proposed affordable rate shall be deemed approved as a matter of law. If, after a hearing, the commission finds the proposed rate to be unjust and unreasonable, the commission shall determine the just and reasonable affordable rate to be charged.

          E. Notwithstanding Subsection B of this section, an investor-owned public utility may elect to file its initial proposed just and reasonable affordable rate in its first general rate case that is to be filed after the effective date of this section; provided that the rate case shall be filed prior to December 31, 2025.

          F. Each investor-owned public utility shall file a proposed updated affordable rate, if an update is needed to maintain an affordable rate for low-income residential customers, for approval in future general rate cases.

          G. Nothing in this section shall prohibit the commission from:

                (1) approving an affordable rate that is a flat dollar amount rate reduction from general residential rates or a percentage rate reduction from residential rates; provided that the reduction is calculated to result in an affordable rate for the average low-income residential customer;

                (2) approving an affordable rate for low-income residential customers based on specified tiers of household income; or

                (3) authorizing programs that seek to decrease or eliminate participating customer arrears or increase the frequency of participating customer payments; provided that such programs shall be designed to increase affordability and continuity of service for participating customers and to reduce utility costs associated with customer account collection activities.

          H. Each investor-owned public utility shall file affordable-rate evaluations every three years that measure:

                (1) the estimated change in energy burden for an average participating customer, based on publicly available income data and the utility's available billing and usage data;

                (2) disconnection notices and service disconnections;

                (3) frequency of customer payments, utility collection costs, arrearage and bad debt; and

                (4) any other relevant criterion that can be assessed with available data that the commission deems appropriate.

          I. The commission shall promulgate rules and issue orders as necessary to implement, administer and evaluate affordable rates.

          J. The commission shall allow an investor-owned public utility to recover:

                (1) the reasonable cost of implementing an affordable rate, including administrative costs, evaluation costs and start-up costs, on a timely basis; and

                (2) costs incurred because of an approved initial affordable rate in the investor-owned public utility's next general rate case.

          K. Investor-owned public utilities may use information collected or created for the purpose of administering energy assistance programs to formulate affordable rates.

          L. As used in this section:

                (1) "affordable rate" means a rate for electric and natural gas utility service designed to prevent an average low-income customer from paying an unsustainable share of income toward these services, the design of which shall be further prescribed by the commission by rule or order and which may be based solely upon publicly available aggregate income data for New Mexico residents;

                (2) "energy burden" means the percentage of gross household income spent by a customer on an individual investor-owned public utility's bills;

                (3) "investor-owned public utility" means a public utility subject to regulation by the commission that provides electric or natural gas service to residential customers, but "investor-owned public utility" does not mean a cooperative organized pursuant to the Rural Electric Cooperative Act; and

                (4) "low income" means an annual household adjusted gross income, as defined in the Income Tax Act, equal to or less than two hundred percent of the current federal poverty level guidelines published by the United States department of health and human services."

     SECTION 3. Section 62-15-37 NMSA 1978 (being Laws 2007, Chapter 4, Section 4, as amended) is amended to read:

     "62-15-37. DEFINITIONS--ENERGY EFFICIENCY--RENEWABLE ENERGY.--As used in the Rural Electric Cooperative Act:

          A. "affordable rate" means a rate for electric and natural gas utility service designed to prevent an average low- income customer from paying an unsustainable share of income toward these services, the design of which shall be further prescribed by the commission by rule or order and which may be based solely upon publicly available aggregate income data for New Mexico residents;

          B. "energy burden" means the percentage of gross household income spent by a customer on bills for electric service provided by a cooperative;

          [A.] C. "energy efficiency" means measures, including energy conservation measures, or programs that target consumer behavior, equipment or devices to result in a decrease in consumption of electricity without reducing the amount or quality of energy services;

          D. "low income" means an annual household adjusted gross income, as defined in the Income Tax Act, equal to or less than one hundred fifty percent of the current federal poverty level guidelines published by the United States department of health and human services;

          [B.] E. "renewable energy" means electric energy generated by use of renewable energy resources and delivered to a rural electric cooperative;

          [C.] F. "renewable energy certificate" means a certificate or other record, in a format approved by the public regulation commission, that represents all the environmental attributes from one megawatt-hour of electricity generated from renewable energy;

          [D.] G. "renewable energy resource" means electric or useful thermal energy:

                (1) generated by use of the following energy resources, with or without energy storage and delivered to a rural electric cooperative:

                     (a) solar, wind and geothermal;

                     (b) hydropower facilities brought in service on or after July 1, 2007;

                     (c) other hydropower facilities supplying no greater than the amount of energy from hydropower facilities that were part of an energy supply portfolio prior to July 1, 2007;

                     (d) fuel cells that do not use fossil fuels to create electricity;

                     (e) biomass resources, limited to agriculture or animal waste, small diameter timber, not to exceed eight inches, salt cedar and other phreatophyte or woody vegetation removed from river basins or watersheds in New Mexico; provided that these resources are from facilities certified by the energy, minerals and natural resources department to: 1) be of appropriate scale to have sustainable feedstock in the near vicinity; 2) have zero life cycle carbon emissions; and 3) meet scientifically determined restoration, sustainability and soil nutrient principles; and

                     (f) landfill gas and anaerobically digested waste biomass; and

                (2) does not include electric energy generated by use of fossil fuel or nuclear energy;

          [E.] H. "useful thermal energy" means renewable energy delivered from a source that can be metered and that is delivered in the state to an end user in the form of direct heat, steam or hot water or other thermal form that is used for heating, cooling, humidity control, process use or other valid end-use energy requirements and for which fossil fuel or electricity would otherwise be consumed;

          [F.] I. "zero carbon resource" means an electricity generation resource that emits no carbon dioxide into the atmosphere, or that reduces methane emitted into the atmosphere in an amount equal to no less than one-tenth of the tons of carbon dioxide emitted into the atmosphere, as a result of electricity production; and

          [G.] J. "zero carbon resource standard" means providing New Mexico rural electric cooperative retail customers with electricity generated from one hundred percent zero carbon resources."

     SECTION 4. A new section of the Rural Electric Cooperative Act is enacted to read:

     "[NEW MATERIAL] RURAL ELECTRIC COOPERATIVE ENERGY AFFORDABILITY FOR LOW-INCOME RESIDENTIAL CUSTOMERS.--

          A. Each cooperative shall establish an energy affordability plan for low-income residential customers by no later than the date of the cooperative's next general rate adjustment.

          B. An energy affordability plan shall be designed to lower the energy burden of the average low-income residential customer in the cooperative's service territory.

          C. An energy affordability plan may consist of:

                (1) an affordable rate for low-income residential customers; or

                (2) programs or services designed to reduce the energy burden of low-income residential customers that may include:

                     (a) energy efficiency improvements;

                     (b) weatherization improvements;

                     (c) bill assistance funded by voluntary member contributions;

                     (d) outreach and communications efforts; and

                     (e) other programs to reduce energy burden; or

                (3) a combination of Paragraphs (1) and (2) of this subsection.

          D. Each cooperative shall annually publish a report on its website on the availability and progress of the cooperative's energy affordability plan, including the number of low-income residential customers served by each component of the program to the extent reasonably determinable and the estimated impact of the plan on the energy burden of an average low-income residential member of the cooperative.

          E. A cooperative that chooses to offer an energy affordability plan for low-income residential customers prior to its next general rate adjustment may recover any reasonable implementation costs through an existing rate adjustment mechanism or charge until its next general rate adjustment."

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