HOUSE BILL 183
51st legislature - STATE OF NEW MEXICO - second session, 2014
INTRODUCED BY
Antonio "Moe" Maestas
AN ACT
RELATING TO PUBLIC UTILITIES; AMENDING A SECTION OF THE PUBLIC UTILITY ACT TO PROVIDE FOR ECONOMIC DEVELOPMENT RATES TO CERTAIN CUSTOMERS CERTIFIED BY THE ECONOMIC DEVELOPMENT DEPARTMENT TO ASSIST IN JOB CREATION AND ADDITIONAL INVESTMENT IN THE STATE; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 62-6-26 NMSA 1978 (being Laws 1989, Chapter 5, Section 1, as amended) is amended to read:
"62-6-26. ECONOMIC DEVELOPMENT RATES FOR GAS AND ELECTRIC UTILITIES--AUTHORIZATION.--
A. The commission may approve or otherwise allow to become effective, as provided in Subsection B of this section, applications from utilities or persons subject to regulation pursuant to Subsection B of Section 62-6-4 NMSA 1978 or filings by cooperative utilities pursuant to Subsection F of Section 62-8-7 NMSA 1978, as appropriate, for special rates or tariffs in order to prevent the loss of customers, to encourage customers to expand present facilities and operations in New Mexico and to attract new customers where necessary or appropriate to promote economic development in New Mexico; [Any such special rates or tariffs shall be designed so as to recover at least the incremental cost of providing service to such customers] provided, however, that the commission shall have no authority to disallow an economic development rate pursuant to a contract that meets the requirements of Subsection C of this section.
B. The commission may approve or otherwise allow to become effective applications from utilities or persons subject to regulation pursuant to Subsection B of Section 62-6-4 NMSA 1978 and filings by cooperative utilities pursuant to Subsection F of Section 62-8-7 NMSA 1978 for economic development rates and rates designed to retain load for gas and electric utility customers; provided, however, that the commission shall have no authority to disallow an economic development rate pursuant to a contract that meets the requirements of Subsection C of this section. For purposes of this section and Section 62-8-6 NMSA 1978, economic development rates and rates designed to retain load are rates set at a level lower than the corresponding service rate for which a customer would otherwise qualify.
C. [Economic development rates shall be approved or otherwise allowed to become effective for an electric utility or persons subject to regulation pursuant to Subsection B of Section 62-6-4 NMSA 1978 or filings by cooperative utilities pursuant to Subsection F of Section 62-8-7 NMSA 1978 only when the utility or the substantially full requirements supplier of the utility has excess capacity. For purposes of this section, "excess capacity" means the amount of electric generating and purchased power capacity available to the utility or such supplier that is greater than the utility's or such supplier's peak load plus a fixed percentage reserve margin set by the commission.] An electric utility may enter into a contract with an eligible customer to provide an economic development rate that fixes a rate for no more than seven years that recovers at least the incremental cost of providing service to the customer. The commission shall allow the economic development rate to go into effect without a hearing no later than thirty days after the contract has been filed with the commission, unless the commission finds that there is probable cause to believe that the rate may not meet the requirements of this subsection. If the commission determines that probable cause exists to ensure that the requirements of this subsection are met, it shall, after notice and hearing, render a decision no later than ninety days after the date on which the contract was filed. If the commission does not act by that date, the contract shall go into effect. For purposes of this subsection, "incremental cost" means the fuel and purchased power costs and direct costs of transmission and distribution necessary to provide service to the customer but does not include system-wide or system expansion costs that provide additional transmission or distribution capacity, system reliability or other benefits to other customers.
D. A customer is eligible for an economic development rate if the customer receives a certificate of eligibility from the economic development department. The economic development department shall issue a certificate of eligibility within fifteen days of the filing of an application by a utility customer or prospective utility customer if the customer or prospective customer demonstrates to the reasonable satisfaction of the economic development department that the customer or prospective customer:
(1) has or will have a contract demand at a single location of at least four thousand kilowatts of electric power at its New Mexico facilities under normal operating conditions;
(2) will create or retain at least twenty-five full-time jobs in New Mexico with a minimum annual average salary of forty thousand dollars ($40,000);
(3) will invest not less than five million dollars ($5,000,000) in fixed assets, including machinery and equipment, in New Mexico; and
(4) with the economic development rate negotiated with the utility, intends to operate its facilities in New Mexico for at least ten years and that the operation or continued operation of its facility or facilities in New Mexico for the ten-year period appears economically viable under reasonable assumptions and projections.
E. If the customer meets the eligibility requirements of Subsection D of this section, the economic development department shall issue the certificate of eligibility containing such reasonable terms and conditions that, in its discretion, are reasonably necessary to ensure that the contract demand, job creation or retention and the investment requirements specified in Subsection D of this section are achieved, including establishing reasonable development milestones and requiring the customer to demonstrate through progress reports or otherwise its achievement of the milestones.
F. A customer who receives a certificate of eligibility and pays rates lower than would otherwise be applicable to the customer, but does not in fact fulfill the commitments necessary to qualify, shall be liable to the utility for the difference between the economic development rate and the rate otherwise applicable to the customer. The utility or the economic development department may require the customer or prospective customer to provide reasonable assurances that it will meet the eligibility requirements specified in Subsection D of this section, including deposits or bonds to guarantee payment to the utility of the difference between the economic development rate and the rate that would have otherwise been applicable to the customer's service.
G. A customer that enters into a contract with an electric utility providing an economic development rate pursuant to Subsection C of this section shall be deemed to have accepted all the terms and conditions associated with the certificate of eligibility issued by the economic development department, including the eligibility requirements of Subsection D of this section and the requirements of Subsection F of this section.
H. The commission shall allow the utility to fully recover in a general rate case from all other customers the full amount of the difference, if any, between the revenue recovered pursuant to the contract economic development rate and the utility's cost to provide service to that customer."
SECTION 2. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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