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SENATE MEMORIAL 61

TH LEGISLATURE

- STATE OF NEW MEXICO -

FIRST SESSION

, 2007

INTRODUCED BY

Lynda M. Lovejoy

A MEMORIAL

REQUESTING TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION TO

SUBMIT ITS NEXT PROPOSED RATE INCREASES TO THE PUBLIC

REGULATION COMMISSION TO CONDUCT A PUBLIC EVIDENTIARY HEARING

REGARDING THE REASONABLENESS OF ITS PROPOSED INCREASED RATES.

WHEREAS, twelve New Mexico rural electric distribution

cooperatives are members or customers of tri-state generation

and transmission association; and

WHEREAS, the public regulation commission has statutory

authority to review rates of rural electric distribution

cooperatives upon a showing of reasonable cause; however, the

main factor in rate increases borne by retail customers is the

pass-through of tri-state power costs; and

WHEREAS, rural electric distribution cooperatives have

entered into long-term requirement contracts requiring them to

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purchase almost their entire supply of electricity from tri-

state, and these contracts collateralize tri-state loans and

are routinely extended to mirror the terms of tri-state loans;

and

WHEREAS, tri-state is not subject to independent cost or

rate review by any federal regulatory entity, nor by regulatory

entities in the other states in which it operates, and in New

Mexico, it is only subject to public regulation commission

review in the event that protests are received from three

cooperatives, an event that has never occurred; and

WHEREAS, there has been continuing concern from many

quarters regarding the reasonableness of the rates charged by

tri-state as well as the environmental consequences of tri-

state's excessive reliance on conventional coal-fired

generation of electricity; and

WHEREAS, tri-state prepares and presents budgets and cost-

of-service studies, but in the absence of independent and

critical review, such management presentations are insufficient

to demonstrate that tri-state's costs, rates and resource plans

are just and reasonable; and

WHEREAS, objective and public oversight can best be

accomplished by a public regulation commission review of tri-

state's costs and its investment and rate design decisions in

an evidentiary proceeding with due process of notice, discovery

and cross-examination;

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NOW, THEREFORE, BE IT RESOLVED BY THE SENATE OF THE STATE

OF NEW MEXICO that tri-state generation and transmission

association submit its most recent rate increase to the public

regulation commission in the form of a traditional rate case,

providing public notice and allowing interested parties to

intervene and participate, including procedures for the

conducting of discovery, the pre-filing of sworn expert

testimony subject to cross-examination and such other

procedural and due process safeguards as the public regulation

commission may deem necessary to ensure the residents of this

state that electric rates for rural cooperatives are

reasonable, and that the generation of such electricity is

consistent with the policies of this state to reduce air

pollution and carbon emissions and to promote the development

and use of renewable sources of electricity; and

BE IT FURTHER RESOLVED that the findings and conclusions

of the public regulation commission should not be binding on

tri-state, but the commission and tri-state should jointly

report the findings from any such hearing to the appropriate

committees of the legislature; and

BE IT FURTHER RESOLVED that copies of this memorial be

transmitted to the chair of the public regulation commission,

to the tri-state generation and transmission association and to

each of the New Mexico rural electric cooperatives served by

tri-state.