HOUSE JUDICIARY COMMITTEE SUBSTITUTE FOR
HOUSE RULES AND ORDER OF BUSINESS COMMITTEE SUBSTITUTE FOR
HOUSE BILL 325
53rd legislature - STATE OF NEW MEXICO - second session, 2018
AN ACT
RELATING TO THE PUBLIC PEACE, HEALTH, SAFETY AND WELFARE; REQUIRING A PUBLIC UTILITY TO PROCURE REPLACEMENT RESOURCES IF THE PUBLIC UTILITY ABANDONS A FACILITY IN CERTAIN CIRCUMSTANCES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 62-9-1 NMSA 1978 (being Laws 1941, Chapter 84, Section 46, as amended) is amended to read:
"62-9-1. NEW CONSTRUCTION--REPLACEMENT RESOURCES--RATEMAKING PRINCIPLES.--
A. No public utility shall begin the construction or operation of any public utility plant or system or of any extension of any plant or system without first obtaining from the commission a certificate that public convenience and necessity require or will require such construction or operation. This section does not require a public utility to secure a certificate for an extension within any municipality or district within which it lawfully commenced operations before June 13, 1941 or for an extension within or to territory already served by it, necessary in the ordinary course of its business, or for an extension into territory contiguous to that already occupied by it and that is not receiving similar service from another utility. If any public utility or mutual domestic water consumer association in constructing or extending its line, plant or system unreasonably interferes or is about to unreasonably interfere with the service or system of any other public utility or mutual domestic water consumer association rendering the same type of service, the commission, on complaint of the public utility or mutual domestic water consumer association claiming to be injuriously affected, may, upon and pursuant to the applicable procedure provided in Chapter 62, Article 10 NMSA 1978, and after giving due regard to public convenience and necessity, including reasonable service agreements between the utilities, make an order and prescribe just and reasonable terms and conditions in harmony with the Public Utility Act to provide for the construction, development and extension, without unnecessary duplication and economic waste.
B. If a certificate of public convenience and necessity is required pursuant to this section for the construction or extension of a generating plant or transmission lines and associated facilities, a public utility may include in the application for the certificate a request that the commission determine the ratemaking principles and treatment that will be applicable for the facilities that are the subject of the application for the certificate. If such a request is made, the commission shall, in the order granting the certificate, set forth the ratemaking principles and treatment that will be applicable to the public utility's stake in the certified facilities in all ratemaking proceedings on and after such time as the facilities are placed in service. The commission shall use the ratemaking principles and treatment specified in the order in all proceedings in which the cost of the public utility's stake in the certified facilities is considered. If the commission later decertifies the facilities, the commission shall apply the ratemaking principles and treatment specified in the original certification order to the costs associated with the facilities that were incurred by the public utility prior to decertification.
C. The requirements for replacement resources located in a school district in which a facility is being abandoned, pursuant to Subsection B of Section 62-9-5 NMSA 1978, shall not preclude a public utility from being granted a certificate of public convenience and necessity; provided that the requirements of Section 62-9-3 NMSA 1978 are met.
[C.] D. The commission may approve the application for the certificate without a formal hearing if no protest is filed within sixty days of the date that notice is given, pursuant to commission order, that the application has been filed. The commission shall issue its order granting or denying the application within nine months from the date the application is filed with the commission. Failure to issue its order within nine months is deemed to be approval and final disposition of the application; provided, however, that the commission may extend the time for granting approval for an additional six months for good cause shown.
[D.] E. As used in this section:
(1) "mutual domestic water consumer association" means an association created and organized pursuant to the provisions of:
[(1)] (a) Laws 1947, Chapter 206; Laws 1949, Chapter 79; or Laws 1951, Chapter 52; or
[(2)] (b) the Sanitary Projects Act; and
(2) "replacement resource" means a new supply-side resource owned by a public utility or a non-utility provider that the public utility needs, due to the public utility's abandonment of a coal-fired generation facility located in New Mexico, to provide reliable service to the public utility's customers that minimizes environmental impacts and is the public utility's most cost-effective option among feasible resource alternatives available to meet that need in accordance with the requirements of Subsection B of Section 62-9-5 NMSA 1978."
SECTION 2. Section 62-9-5 NMSA 1978 (being Laws 1941, Chapter 84, Section 48, as amended) is amended to read:
"62-9-5. ABANDONMENT OF SERVICE--LOCATION OF REPLACEMENT RESOURCES.--
A. No utility shall abandon all or any portion of its facilities subject to the jurisdiction of the commission, or any service rendered by means of such facilities, without first obtaining the permission and approval of the commission. The commission shall grant such permission and approval, after notice and hearing, upon finding that the continuation of service is unwarranted or that the present and future public convenience and necessity do not otherwise require the continuation of the service or use of the facility; provided, however, that ordinary discontinuance of service or use of facilities for nonpayment of charges, nonuser or other reasons in the usual course of business shall not be considered as abandonment. In considering the present and future public convenience and necessity, the commission shall specifically consider the impact of the proposed abandonment of service on all consumers served in this state, directly or indirectly, by the facilities sought to be abandoned.
B. If a facility being abandoned is a facility described in Paragraph (1) of Subsection G of Section 62-3-3 NMSA 1978, is a coal-fired generation facility located in New Mexico and the abandonment will cause, in the aggregate, a reduction in annual property tax revenue paid to local governments of two million five hundred thousand dollars ($2,500,000) or more that is attributable to the facility being abandoned, then the utility abandoning the facility shall procure replacement resources within the school district in which the facility being abandoned is located; provided that the cost to customers to procure the replacement resources shall be no more than one hundred ten percent of the estimated cost to customers to procure the same resource type and capacity in a different location in the state; and provided further that locating the replacement resources in that school district shall not adversely affect adequate system reliability.
C. Applications for abandonment shall include evidence of property tax revenue attributed to the facility that is being abandoned.
D. As used in this section, "replacement resource" means a new supply-side resource owned by a utility or a non-utility provider that the utility needs, due to the utility's abandonment of a coal-fired generation facility located in New Mexico, to provide reliable service to the utility's customers that minimizes environmental impacts and is the utility's most cost-effective option among feasible resource alternatives available to meet that need in accordance with the requirements of Subsection B of this section."
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