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

SPONSOR Martinez, R.

ORIGINAL DATE

LAST UPDATED

1/19/08

1/22/08 HB

SHORT TITLE Residential Energy Conservation Program

SB 211

ANALYST Leger

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$5,000.0 Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Mortgage Finance Authority (MFA)

SUMMARY

Synopsis of Bill

Senate Bill 211 appropriates $5 million from the general fund to the Department of Finance and

Administration for expenditure in FY09 & FY10 for disbursement to the New Mexico Mortgage

Finance Authority (MFA) to provide a residential energy conservation program to increase the

energy efficiency and reduce energy expenditures of homes occupied by low-income persons in

New Mexico.

FISCAL IMPLICATIONS

The appropriation of $5 million contained in this bill is a non-recurring expense to the general

fund. Any unexpended or unencumbered balance remaining at the end of FY10 shall revert to the

general fund. No more than five percent of the appropriation may be used by MFA for

administrative expense. MFA will expend the funds over a two-year period to create and

implement a residential energy conservation program for low-income households.

Senate Bill 211– Page

2

SIGNIFICANT ISSUES

According to MFA this bill provides additional funding to the New Mexico Energy $mart

program which increases the energy efficiency and reduces the residential energy costs of homes

occupied by low-income people, while improving their health and safety.

PERFORMANCE IMPLICATIONS

MFA reports the following funding for NM Energy$mart (Weatherization Assistance Program):

FUNDING FOR 2007

DOE $1,874,902 (received 7/07)

STATE Funding (DFA Budget) $ 800,000 (received 10/07)

LIHEAP Funding $ 710,000 (received 2/07)

LIHEAP Funding $ 693,506 (received 6/07)

PNM Gas Energy Efficiency Act Funding $ 823,453

(received 12/07)

Total Funding: $5,126,861

PRODUCTION

1607 homes have been weatherized with this funding from the months of 7/06 through 6/07

PROPOSED FUNDING FOR 2008

DOE $1,714,483

STATE (DFA Budget) $ 800,000

LIHEAP $1,402,056

PNM Gas Energy Efficiency Act Funding $ 823,453 (1/1/08 – 12/31/08)

PNM Electric Energy Efficiency Act Funding $ 225,000 (1/1/08 – 6/30/08)

PNM Electric Energy Efficiency Act Funding $ 450,000 (7/1/08 – 6/30/09)

If the requested funding of $5,000,000 is added into the estimates, it would equate to

approximately 1,800 additional households being assisted. Without the funding requested, that

many households would not receive assistance.

ADMINISTRATIVE IMPLICATIONS

The MFA will continue to administer the program.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

According to MFA this bill proposes to address the substantial unmet demand for energy

conservation assistance throughout the state. Accordingly, a direct consequence of not enacting

this bill would be a reduction of 1,800 units to the number of low-income households that could

be assisted. The result is more of those household being faced with high energy bills and

continuing health and safety hazards in their homes. Combined savings for energy and non-

energy benefits in 2006 shows NM Energy $mart returns at $2.69 for every $1 invested. At

current prices, home energy savings average $358 per year.

Senate Bill 211– Page

3

Funding in the NM Energy $mart program is heavily leveraged, meaning that $1 in funding from

the State can actually mean as much as $3 to the program. Without the proposed funding,

subgrantees will be forced to lay off employees which will be a detriment to the numbers of

households being assisted by all of the other funding sources.

JLL/mt