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AN ACT

RELATING TO RURAL ELECTRIC COOPERATIVES; AMENDING PROTEST

PROCEDURES FOR RATE CHANGES.

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

Section 1. Section 62-8-7 NMSA 1978 (being Laws 1991,

Chapter 251, Section 1, as amended) is amended to read:

"62-8-7. CHANGE IN RATES.--

A. At any hearing involving an increase in rates

or charges sought by a public utility, the burden of proof to

show that the increased rate or charge is just and reasonable

shall be upon the utility.

B. Unless the commission otherwise orders, no

public utility shall make any change in any rate that has been

duly established except after thirty days' notice to the

commission, which notice shall plainly state the changes

proposed to be made in the rates then in force and the time

when the changed rates will go into effect and other

information as the commission by rule requires. The utility

shall also give notice of the proposed changes to other

interested persons as the commission may direct. All proposed

changes shall be shown by filing new schedules that shall be

kept open to public inspection. The commission for good cause

shown may allow changes in rates without requiring the thirty

days' notice, under conditions that it may prescribe.

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C. Whenever there is filed with the commission by

any public utility a complete application as prescribed by

commission rule proposing new rates, the commission may, upon

complaint or upon its own initiative, except as otherwise

provided by law, upon reasonable notice, enter upon a hearing

concerning the reasonableness of the proposed rates. If the

commission determines a hearing is necessary, it shall suspend

the operation of the proposed rates before they become

effective but not for a longer initial period than nine months

beyond the time when the rates would otherwise go into effect,

unless the commission finds that a longer time will be

required, in which case the commission may extend the period

for an additional three months. The commission shall hear and

decide cases with reasonable promptness. The commission shall

adopt rules identifying criteria for various rate and tariff

filings to be eligible for suspension periods shorter than

what is allowed by this subsection and to be eligible for

summary approval without hearing.

D. If after a hearing the commission finds the

proposed rates to be unjust, unreasonable or in any way in

violation of law, the commission shall determine the just and

reasonable rates to be charged or applied by the utility for

the service in question and shall fix the rates by order to be

served upon the utility or the commission by its order shall

direct the utility to file new rates respecting such service

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that are designed to produce annual revenues no greater than

those determined by the commission in its order to be just and

reasonable. Those rates shall thereafter be observed until

changed, as provided by the Public Utility Act.

E. Except as otherwise provided by law, any

increase in rates or charges for the utility commodity based

upon cost factors other than taxes or cost of fuel, gas or

purchased power, filed for after April 4, 1991, shall be

permitted only after notice and hearing as provided by this

section. The commission shall enact rules governing the use

of tax, fuel, gas or purchased power adjustment clauses by

utilities that enable the commission to consider periodically

at least the following:

(1) whether the existence of a particular

adjustment clause is consistent with the purposes of the

Public Utility Act, including serving the goal of providing

reasonable and proper service at fair, just and reasonable

rates to all customer classes;

(2) the specific adjustment mechanism to

recover tax, gas, fuel or purchased power costs;

(3) which costs should be included in an

adjustment clause, procedures to avoid the inclusion of costs

in an adjustment clause that should not be included and

methods by which the propriety of costs that are included may

be determined by the commission in a timely manner, including

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what informational filings are required to enable the

commission to make such a determination; and

(4) the proper adjustment period to be

employed.

F. The commission may eliminate or condition a

particular adjustment clause if it finds such elimination or

condition is consistent with the purposes of the Public

Utility Act, including serving the goal of providing

reasonable and proper service at fair, just and reasonable

rates to all customer classes; provided, however, that no such

elimination or condition shall be ordered unless such

elimination or condition will not place the affected utility

at a competitive disadvantage. The commission rules shall

also provide for variances and may provide for separate

examination of a utility's adjustment clause based upon that

utility's particular operating characteristics.

G. Whenever there is filed with the commission a

schedule proposing new rates by a rural electric cooperative

organized under the Rural Electric Cooperative Act, the rates

shall become effective as proposed by the rural electric

cooperative without a hearing. However, the cooperative shall

give written notice of the proposed rates to its affected

patrons at least thirty days prior to the filing with the

commission, and the commission shall suspend the rates and

conduct a hearing concerning the reasonableness of any

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proposed rates filed by a rural electric cooperative pursuant

to Subsections C and D of this section upon the filing with

the commission of a protest setting forth grounds for review

of the proposed rates signed by the lesser of one percent of

or twenty-five members of a customer class of the rural

electric cooperative and if the commission determines there is

just cause for reviewing the proposed rates on one or more of

the grounds of the protest. The protest shall be filed no

later than twenty days after the filing with the commission of

the schedule proposing the new rates. The hearing and review

shall be limited to the issues set forth in the protest and

for which the commission may find just cause for the review,

which issues shall be contained in the notice of hearing. The

provisions of this subsection shall not be construed to affect

commission authority or procedure to regulate the sale,

furnishing or delivery by wholesale suppliers of electricity

to rural electric cooperatives pursuant to Section 62-6-4 NMSA

1978. In addition to the adjustments permitted by Subsections

E and F of this section, the commission may authorize rate

schedules of rural electric cooperatives to recover, without

notice and hearing, changes in the cost of debt capital

incurred pursuant to securities that are lawfully issued. For

the purposes of this subsection, a member of a rural electric

cooperative is a member as defined by the Rural Electric

Cooperative Act."

Section 2. EFFECTIVE DATE.--The effective date of the

provisions of this act is July 1, 2007.

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