SENATE BILL 276
50th legislature - STATE OF NEW MEXICO - first session, 2011
INTRODUCED BY
Peter Wirth
AN ACT
RELATING TO UTILITIES; AMENDING SECTIONS OF THE EFFICIENT USE OF ENERGY ACT TO PROVIDE FOR COST-EFFECTIVENESS USING THE UTILITY COST TEST.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 62-17-4 NMSA 1978 (being Laws 2005, Chapter 341, Section 4, as amended) is amended to read:
"62-17-4. DEFINITIONS.--As used in the Efficient Use of Energy Act:
A. "achievable" means those energy efficiency or load management resources available to the utility using its best efforts;
B. "commission" means the public regulation commission;
C. "cost-effective" means that the energy efficiency or load management program meets the [total resource] utility cost test;
D. "customer" means a utility customer at a single, contiguous field, location or facility, regardless of the number of meters at that field, location or facility;
E. "distribution cooperative utility" means a utility with distribution facilities organized as a rural electric cooperative pursuant to Laws 1937, Chapter 100 or the Rural Electric Cooperative Act or similarly organized in other states;
F. "energy efficiency" means measures, including energy conservation measures, or programs that target consumer behavior, equipment or devices to result in a decrease in consumption of electricity and natural gas without reducing the amount or quality of energy services;
G. "large customer" means a customer with electricity consumption greater than seven thousand megawatt-hours per year or natural gas use greater than three hundred sixty thousand decatherms per year;
H. "load management" means measures or programs that target equipment or devices to result in decreased peak electricity demand or shift demand from peak to off-peak periods;
I. "public utility" means a public utility that is not also a distribution cooperative utility; and
J. "[total resource] utility cost test" means a standard that is met if the monetary costs that are borne by the utility [and the participants] and that are incurred to develop, acquire and operate energy efficiency or load management resources on a life-cycle basis are less than the avoided monetary costs associated with developing, acquiring and operating the associated supply-side resources. In developing this test for energy efficiency and load management programs directed to low-income customers, the commission shall either quantify or assign a reasonable value to reductions in working capital, reduced collection costs, lower bad-debt expense, improved customer service effectiveness and other appropriate factors as utility system economic benefits."
SECTION 2. Section 62-17-5 NMSA 1978 (being Laws 2005, Chapter 341, Section 5, as amended) is amended to read:
"62-17-5. COMMISSION APPROVAL--ENERGY EFFICIENCY AND LOAD MANAGEMENT PROGRAMS--DISINCENTIVES.--
A. Pursuant to the findings and purpose of the Efficient Use of Energy Act, the commission shall consider public utility acquisition of cost-effective energy efficiency and load management resources to be in the public interest.
B. The commission shall direct public utilities to evaluate and implement cost-effective programs that reduce energy demand and consumption.
C. Before the commission approves an energy efficiency and load management program for a public utility, it must find that the portfolio of programs is cost-effective and designed to provide every affected customer class with the opportunity to participate and benefit economically. The commission shall determine the cost-effectiveness of energy efficiency and load management measures using the [total resource] utility cost test.
D. The commission shall act expeditiously on public utility requests for approval of energy efficiency or load management programs.
E. Public utilities shall obtain commission approval of energy efficiency and load management programs before they are implemented. Public utilities proposing new energy efficiency and load management programs shall, before seeking commission approval, solicit nonbinding recommendations on the design, implementation and use of third-party energy service contractors through competitive bidding on the programs from commission staff, the attorney general, the energy, minerals and natural resources department and other interested parties. The commission may for good cause require utilities to solicit competitive bids for energy efficiency and load management resources.
F. The commission shall, upon petition or its own motion, identify regulatory disincentives or barriers for public utility expenditures on energy efficiency and load management measures and ensure that they are removed in a manner that balances the public interest, consumers' interests and investors' interests. The commission shall also provide public utilities an opportunity to earn a profit on cost-effective energy efficiency and load management resource development that, with satisfactory program performance, is financially more attractive to the utility than supply-side utility resources.
G. Public utilities providing electricity and natural gas service to New Mexico customers shall, subject to commission approval, acquire all cost-effective and achievable energy efficiency and load management resources available in their service territories. This requirement, however, for public utilities providing electricity service, shall not be less than savings of five percent of 2005 total retail kilowatt-hour sales to New Mexico customers in calendar year 2014 and ten percent of 2005 total retail kilowatt-hour sales to New Mexico customers in 2020 as a result of energy efficiency and load management programs implemented starting in 2007.
H. A utility that determines it cannot achieve the minimum requirements established in Subsection G of this section shall report to the commission on why it cannot meet those requirements and shall propose alternative requirements based on acquiring all cost-effective and achievable energy efficiency and load management resources. If the commission determines, after hearing, that the minimum requirements of Subsection G of this section exceed the achievable amount of energy efficiency and load management available to the utility, the commission shall establish lower minimum energy savings requirements for the utility based on the maximum amount of energy efficiency and load management that it determines can be achieved."
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