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

SPONSOR Martinez

ORIGINAL DATE

LAST UPDATED

01/24/08

HB

SHORT TITLE Study PRC Regulation of Propane Gas

SM 16/aSRC/aSCONC

ANALYST Shaya

Duplicates HM 13

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of SCONC Amendment

Senate Conservation Committee amendment of Senate Memorial 16; On page 2, line 18, strike

"possible regulation of"; On page 2, line 19, strike "by the public regulation commission".

The amendment removes the possible regulation of the propane gas industry by the public

regulation commission.

Synopsis of SRC Amendment

Senate Rules Committee amendment of Senate Memorial 16 ; On page 1, line 23, after "to",

strike the remainder of the line, strike line 24 and strike line 25 up to the semicolon and insert in

lieu thereof "the high costs of fuel be protected":

2. On page 2, between lines 19 and 20, insert the following: "BE IT FURTHER RESOLVED

that the study include a review of the following: A. the relationship between the low income

home energy assistance program and the price of propane; B. current regulation of propane

installations by the construction industries division of the regulation and licensing department;

and C. liability issues associated with the propane industry; and".,

The amendment changes the language of the original bill to high fuel costs from excessive or

unjustified increases in the price of fuel. The amendment also requires the study to include the

relationship between the low income home energy assistance program and the price of propane;

the current regulation of propane installations by the construction industries division of the

regulation and licensing department; and the liability issues associated with the propane industry

Synopsis of Original Bill

Senate Memorial 16 requests the New Mexico Legislative Council to direct the appropriate

Interim Legislative Committee to study the possible regulation of the propane gas industry by the

Public Regulation Commission.

Senate Memorial 16/aSRC/aSCONC – Page

2

The appropriate Interim Legislative Committee appointed by the Legislative Council will be

directed to hold a hearing on this issue by November 1, 2008. Copies of this Memorial are to be

transmitted to the New Mexico Legislative Council and the Chair of the Public Regulation

Commission.

SIGNIFICANT ISSUES

SM 16 proposes that with rising fuel costs across the nation, there is in increasing concern to the

public, especially low-income persons living in rural areas of New Mexico. Many New

Mexicans living in rural communities depend on propane gas as an energy source to heat their

homes in the winter. SM 16 states that it is necessary to protect the most vulnerable New

Mexicans from excessive and unjustified increases in the price of fuel from persons who may

take unfair advantage of them.

Currently, the Public Regulation Commission does not regulate the propane gas industry and the

rates charged for propane gas services. SM 16 proposes oversight of the propane gas industry by

the Public Regulation Commission to ensure that New Mexicans, particularly low-income New

Mexicans, are paying fair prices for propane gas. Under the Public Utility Act, the Public

Regulation Commission would be provided with the authority and oversight of the entities

“manufacturing, storing, selling, or distributing propane gas in enclosed containers or tank trucks

for the use of consumers, except consumers who receive their supply through any pipeline

system operating under municipal authority," according to the Memorial.

DUPLICATION

SM 16 duplicates HM 13.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

The consequence of not enacting this bill will result in the continued unregulated practices of the

propane gas industry and the rates charged for propane gas service to New Mexicans. The State’s

most vulnerable populations, especially low-income persons living in rural communities, will be

the one’s most severely affected because many low-income persons rely on propane gas to heat

their homes in the winter.

POSSIBLE QUESTIONS

Is the propane gas industry taking advantage of the citizens of the State of New Mexico by

increasing its rates charged for propane gas services.

RS/bb