SENATE BILL 283
51st legislature - STATE OF NEW MEXICO - second session, 2014
INTRODUCED BY
Stuart Ingle
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 approve or otherwise allow to become effective 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 approve or otherwise allow to become effective 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 contract rate to go into effect without 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 contract rate may not meet the requirements of this subsection. If the commission determines that probable cause does exist, to assure 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. As used in this subsection, "incremental cost" means fuel and purchased power costs, costs recoverable from customers pursuant to the Renewable Energy Act and the Efficient Use of Energy Act, and the direct costs of transmission and distribution facilities necessary to provide service to the customer, but "incremental cost" 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. An existing or prospective customer is an eligible customer if:
(1) the existing or prospective customer provides evidence satisfactory to the utility that:
(a) the availability of the economic development rate is a critical contributing factor in the existing or prospective customer's decision to add new or additional load or in retaining existing load that would otherwise be lost;
(b) in the case of an existing customer that is seeking an economic development rate to retain load, the customer has 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;
(c) in the case of an existing or prospective customer seeking an economic development rate to add new or additional load, the customer will have a contract demand or an additional contract demand at a single location of at least one thousand kilowatts of electric power at its New Mexico facilities under normal operating conditions;
(d) the existing or prospective customer intends to operate its facilities in New Mexico for at least ten years;
(e) the operation or continued operation of the existing or prospective customer's facility or facilities in New Mexico for the ten-year period is economically viable under reasonable assumptions and projections; and
(f) the existing or prospective customer that is or will be located in New Mexico has or will have sales revenue at least fifty percent of which is for sales outside the state of New Mexico; or
(2) the existing or prospective 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 an existing or prospective utility customer if the customer demonstrates to the reasonable satisfaction of the economic development department that, in addition to the conditions provided in Paragraph (1) of this subsection:
(a) in the case of an existing customer seeking an economic development rate to retain load, the customer will retain at least twenty full-time jobs in New Mexico with a minimum annual salary of forty thousand dollars ($40,000), and in the case of an existing or prospective customer that is seeking an economic development rate to add additional or new load, the customer will create at least twenty full-time jobs in New Mexico with a minimum annual salary of forty thousand dollars ($40,000);
(b) in the case of an existing customer seeking an economic development rate to retain load, the customer has invested not less than five million dollars ($5,000,000) in fixed assets, including machinery and equipment in New Mexico, and in the case of an existing or prospective customer that is seeking an economic development rate to add additional or new load, the customer will invest not less than five million dollars ($5,000,000) in fixed assets, including machinery and equipment, in New Mexico; and
(c) the existing or prospective customer that is or will be located in New Mexico has sales revenue at least fifty percent of which is for sales outside the state of New Mexico.
E. In issuing a certificate of eligibility, the economic development department shall prescribe reasonable terms and conditions necessary to assure that the contract demand, job creation or retention and investment requirements for a certificate of eligibility 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 that accepts the terms and conditions for eligibility in Subsection D of this section by paying economic development rates lower than would otherwise be applicable to the customer, but does not in fact fulfill the commitments necessary for eligibility, shall be liable to the utility for the difference between the economic development rate and the rate otherwise applicable to the customer. The customer shall provide reasonable assurances to the utility that it will fulfill the commitments necessary for eligibility 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. The commission shall allow a utility to recover, through the ratemaking process, the full amount of the difference between the revenue recovered under the contract economic development rate and the revenue the utility would have recovered under the rate the customer would have paid if the customer were not on the economic development rate.
H. For purposes of Subsections C through G of this section, "electric utility" or "utility" means a public utility as defined by Paragraph (1) of Subsection G of Section 62-3-3 NMSA 1978; provided, however, that "electric utility" or "utility" does not include a member of a regional transmission organization regulated by the federal energy regulatory commission and does not include rural electric cooperatives."
SECTION 2. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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