SENATE CONSERVATION COMMITTEE SUBSTITUTE FOR
SENATE BILL 57
50th legislature - STATE OF NEW MEXICO - first session, 2011
AN ACT
RELATING TO ENERGY; ENACTING A NEW SECTION OF THE PUBLIC UTILITY ACT TO PROVIDE FOR ELECTRIC UTILITIES TO RECOVER ALL REASONABLE NEW TRANSMISSION INFRASTRUCTURE IMPROVEMENT COSTS AND CHANGES IN CERTAIN WHOLESALE TRANSMISSION CHARGES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of the Public Utility Act is enacted to read:
"[NEW MATERIAL] RECOVERY OF CERTAIN TRANSMISSION COSTS.--
A. The commission shall adopt rules that provide for an investor-owned electric utility to recover on an annual basis, through a transmission cost adjustment clause, certain of its reasonable and necessary transmission infrastructure improvement costs and changes in wholesale transmission charges to the electric utility under a regional transmission tariff approved by a federal regulatory authority. The commission's rules shall provide for the electric utility to recover the costs and charges on an annual basis through a transmission cost recovery clause, but only to the extent that the costs or charges have been incurred since the end of the test year in the electric utility's most recent base-rate case. The requirements and procedures for a transmission cost recovery clause are:
(1) the electric utility must be an investor-owned person with at least one hundred thousand electric retail customers in the state;
(2) the commission may allow the electric utility to recover only those transmission infrastructure improvement costs for facilities placed into operation by the electric utility for its reliability and load growth needs to serve its own customers;
(3) the commission may allow the electric utility to recover only the costs or charges allocable to its retail customers in the state and shall not allow the electric utility to recover more revenue through the transmission cost adjustment clause than authorized;
(4) an electric utility shall not apply to amend its transmission cost adjustment clause more frequently than once each calendar year;
(5) the rates under a transmission cost adjustment clause shall be in effect for a maximum of thirty-six months, but the electric utility may file an application for new rates to be collected under a new transmission cost adjustment clause;
(6) upon completion of a base-rate case for an electric utility, the transmission cost adjustment clause shall be set to zero; and
(7) after the rates under a transmission cost adjustment clause expire at the end of a thirty-six-month period or the transmission cost adjustment clause is set to zero at the completion of a base-rate case, the commission may order the refund of any over-recovery that occurred during the period the transmission cost adjustment clause was in effect, but the commission shall not order the surcharge of any under-recovery. An over-recovery shall be considered to have occurred if the revenues collected under the transmission cost adjustment clause were greater than the costs and charges that the transmission cost adjustment clause was intended to recover.
B. An electric utility that meets the criteria in Subsection A of this section is subject to the following limitation and reporting requirements:
(1) an electric utility's retail customers in the state shall be held harmless in a base-rate case or a transmission cost recovery case in the event that the electric utility, when an electric utility to which it has been designated to provide new transmission facilities under the guidelines of the regional transmission organization of which it is a member, declined the opportunity to construct or own the new transmission facilities itself, and the electric utility shall not be allowed to recover from its retail customers any higher costs due to an alternative transmission provider constructing or owning the transmission facilities the electric utility declined to own or construct;
(2) the electric utility shall make an annual report to the commission and to any wholesale transmission customer that is a rural electric cooperative that directly provides retail electric service to customers in the state that are within the eastern interconnection power grid to show that any such higher costs due to declining to own or construct a designated transmission facility that are not recovered from its retail customers in the state pursuant to this subsection are not recovered from its wholesale transmission customers; and
(3) if an electric utility declines the opportunity to construct or own the new transmission facilities itself, the electric utility shall, for informational purposes, report the decision to decline to the commission and to any wholesale transmission customer that is a rural electric cooperative that directly provides retail electric service to customers in the state that are within the eastern interconnection power grid."
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