Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR HAFC

DATE TYPED 3/5/05

HB 748/HAFCS

SHORT TITLE Renewable Energy and Transmission & Storage Act SB

ANALYST Wilson

APPROPRIATION

Appropriation Contained

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY07

FY08

$0.1 Recurring

Renewable En-

ergy Transmis-

sion Bonding

Fund

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

($0.1) Recurring Renewable Energy

Transmission Bond-

ing Fund

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

The House Appropriations and Finance Committee substitute for House Bill 748 creates the New

Mexico Renewal Energy Transmission and Storage Authority (RETSA), a quasi-governmental

agency that will serve to finance transmission and storage projects with an emphasis on renew-

able energy and facilitate the in-state use of and exportation of New Mexico generated renewable

power. The purpose is to promote the development of renewable energy facilities in the state by

providing additional transmission facilities to take the power to market both within New Mexico

and out of state.

The RETSA will have specialized expertise in electric transmission infrastructure and storage

issues. The RETSA will have the power to issue revenue bonds that will provide financing

House Bill 748/HAFCS-- Page 2

stimulus for public and private entities to construct and operate new transmission lines and elec-

tric storage facilities, both inside and outside of New Mexico.

The RETSA shall be composed of five members as follows: three members shall be appointed by

the governor with the advice and consent of the senate, one member appointed by the speaker of

the house of representatives and one member appointed by the president pro tempore of the sen-

ate.

One member appointed by the governor shall have expertise in financial matters involving the

financing of major electrical transmission projects. The other four members shall have

special knowledge of the public utility industry, as evidenced by college degrees or by experi-

ence, at least five years of which must be with the public utility industry, knowledge of renew-

able energy development and a displayed ability to protect the public interest.

In addition to the appointed members, the secretary of Energy, Minerals & Natural Resources

Department (EMNRD) shall serve as an ex-officio nonvoting member of the RETSA.

The RETSA is not created or organized and its operations shall not be conducted for the purpose

of making a profit, but it is expected to recover the costs of operating the RETSA. No part of the

revenues or assets of the RETSA shall benefit or be distributable to its members, officers or other

private persons.

The PRC will retain permitting and siting authority over jurisdictional transmission lines. New

Mexico regulated utility companies will evaluate the benefits of participation in projects with

PRC oversight of retail rates.

The RETSA will engage in interstate commerce and will be subject to Federal Energy Regula-

tory Commission (FERC) jurisdiction.

The RETSA will have the power of eminent domain for acquiring property for public use for the

purpose of constructing electric transmission lines and related infrastructure.

The bill creates a joint interim legislative committee that shall be known as the New Mexico re-

newable energy transmission and storage RETSA oversight committee. The New Mexico legisla-

tive council shall determine the membership of the committee and shall appoint the members and

designate the chairperson and the vice chairperson in accordance with legislative council poli-

cies. The staff for the committee shall be provided by the legislative council service.

Significant Issues

The EMNRD believes this bill will provide economic development in New Mexico’s rural areas.

A typical New Mexico wind project can generate approximately $40 million for the local in-state

economy over a 25 year period.

FISCAL IMPLICATIONS

There is no appropriation in the bill from the general fund, but the RETSA is authorized to issue

and sell revenue bonds, known as renewable energy transmission bonds, payable solely from the

renewable energy transmission bonding fund, in compliance with the New Mexico Renewable

House Bill 748/HAFCS-- Page 3

Energy Transmission and Storage Act, for the purpose of entering into a project when the

RETSA determines that the project is needed.

The net proceeds from the bonds are appropriated to the RETSA for the purpose of financing or

planning and acquiring eligible facilities.

The bill creates Renewable Energy Transmission Bonding Fund in the state treasury. The fund

shall consist of revenues received by the RETSA from operating or leasing eligible facilities,

fees and service charges collected, and, if the RETSA has provided financing for eligible facili-

ties, money from payments of principal of and interest on loans. Earnings of the fund shall be

credited to the fund. Balances in the fund at the end of any fiscal year shall remain in the fund.

Money in the Renewable Energy Transmission Bonding Fund is pledged for the payment of prin-

cipal and interest on all bonds issued pursuant to the New Mexico Renewable Energy Transmis-

sion and Storage Authority Act. Money in the fund is appropriated to the RETSA for the purpose

of paying debt service, including redemption premiums, on the bonds and the expenses incurred

in the issuance, payment and administration of the bonds.

This bill creates a new fund. The LFC objects to including continuing appropriation language in

the statutory provisions for newly created funds. Earmarking reduces the ability of the legislature

to establish spending priorities.

The receipts from selling equipment or providing services to the RETSA or an agent or lessee of

the RETSA for the planning, construction, repair, maintenance or operation of an electric trans-

mission and storage facility acquired by the RETSA may be deducted from gross receipts.

ADMINISTRATIVE IMPLICATIONS

This bill creates a quasi-state agency, specializing in electric transmission, storage and infrastruc-

ture financing.

DW/yr