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

SPONSOR Lovejoy

ORIGINAL DATE

LAST UPDATED

3/06/07

HB

SHORT TITLE Electricity Rate Increase Hearings

SM 61

ANALYST Earnest

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Public Regulation Commission (PRC)

SUMMARY

Synopsis of Bill

Senate Memorial 61 requests the Tri-State Generation and Transmission Association, which

supplies electricity to 12 New Mexico cooperatives, to file its most recent rate increase with the

PRC in the form of a traditional rate case. PRC’s findings and conclusions of the rate case

review would not be binding on Tri-State, but PRC and Tri-State should jointly report the

findings to the appropriate legislative committees.

FISCAL IMPLICATIONS

None identified.

SIGNIFICANT ISSUES

PRC indicates that Tri-State most recently changed its New Mexico rates effective January 1,

2007, pursuant to the Advice Notice No. 11 filed with the Commission on September 14.

Senate Memorial 61 – Page

2

If files as a regular rate case, interested parties to provide testimony and otherwise participated in

the review of the rates to ensure that residents are paying reasonable electric rates for energy

from Tri-State.

PRC notes that its findings and conclusions from this traditional rate case review of Tri-State’s

most recent rate increase would not be binding on Tri-State. Commission has limited jurisdiction

over Tri-State Generation and Transmission Association, Inc wholesale rates (upon the filing of

three protests and Commission finding of just cause). NMSA 1978 § 62-6-4(D).

ADMINISTRATIVE IMPLICATIONS

PRC indicates that it would incur all the expenses associated with a filed rate proceeding.

Depending upon the timing of this filing, PRC staff might experience an increase in workload

and a need to prioritize this review with other filings by regulated entities. Upon Tri-State’s

voluntary completion and filing of its rate case, PRC would begin a nine month process,

including the analysis by PRC staff and any review of interested party filings, consideration of

requests for clarifications and explanations of that analysis, a hearing process, and then final joint

report of the Commission and Tri-State.

According to PRC, Tri-State’s members consist of 44 rural electric distribution cooperatives

spread throughout a four state region. Each of the 44 coops served by Tri-State has a seat on Tri-

State’s board of directors. The cost of this proceeding would be passed through to all of the

member cooperatives in New Mexico.

ANA/csd