NOTE: As provided in LFC policy, this report is
intended only for use by the standing finance committees of the
legislature. The Legislative Finance Committee does not assume
responsibility for the accuracy of the information in this report when used for
other purposes.
The most recent FIR
version (in HTML & Adobe PDF formats) is available on the Legislative
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obtained from the LFC in Suite 101 of the State Capitol Building North.
SPONSOR: |
Cervantes |
DATE TYPED: |
02/21/03 |
HB |
663 |
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SHORT TITLE: |
Hearings on Public Utility Rate Adjustments |
SB |
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ANALYST: |
Valenzuela |
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APPROPRIATION
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY03 |
FY04 |
FY03 |
FY04 |
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NFI |
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(Parenthesis
( ) Indicate Expenditure Decreases)
Legislative Finance Committee files
Responses
Received From
Energy,
Minerals and Natural Resources Department (EMNRD)
Department
of Environment (NMED)
SUMMARY
Synopsis
of Bill
House Bill 663 amends NMSA 1978, Section 62-8-7.1 to allow for certain public utilities to make rate adjustments without a hearing. Certain public utilities are defined as those public utilities whose annual operating reserves averaged less than $500,000 over any consecutive three-year period. The rates of these utilities would become effective upon filing of rates with the Commission, without a hearing, provided the utility shall provide written notice to ratepayers at least sixty days prior to filing of the rates.
Significant
Issues
Several regulated utilities have testified to
the LFC and other legislative committees about the length of time that it takes
the PRC to act on and complete docketed cases. Water utilities in particular
have been concerned about having to go through a full rate case when requesting
only a nominal increase in rates such as an inflationary increase. Further,
these utilities have requested increases where ratepayers have no objection but
have not been able to receive an expedited decision. An added concern is that
the water utilities incur technical and legal costs in each rate case, which
ultimately get passed on to the consumer. This bill recognizes that where the requested
fee increase is minimal and uncontested, the rate case should be expedited.
FISCAL IMPLICATIONS
House Bill 663 does
not contain an appropriation.
The LFC has
recommended several performance measures with targets to focus attention on
this issue of timeliness. These measures are shown below:
-
Percent reduction
in average number of days to complete a water utility rate case: 25%
-
Average number of
days to complete a water utility rate case: 194.4 days
-
Percent reduction
in the number of water utility rate cases on the PRC docket: 25%
-
Percent reduction in the number of
docketed cases before the PRC: 25%
Improving the number
of cases going through the PRC could actually make available more resources for
larger more complex cases.
MFV/prr:yr