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AN ACT

RELATING TO ELECTRIC UTILITIES; ENACTING SECTIONS OF THE

RURAL ELECTRIC COOPERATIVE ACT; AMENDING AND ENACTING

SECTIONS OF THE RENEWABLE ENERGY ACT; AMENDING SECTIONS OF

THE EFFICIENT USE OF ENERGY ACT; PROVIDING FOR INCREASES IN

THE RENEWABLE ENERGY PORTFOLIO OF PUBLIC UTILITIES AND RURAL

ELECTRIC COOPERATIVES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. A new section of the Rural Electric

Cooperative Act is enacted to read:

"RENEWABLE PORTFOLIO STANDARD.--

A. Each distribution cooperative organized under

the Rural Electric Cooperative Act shall meet the renewable

portfolio standard requirements, as provided in this section,

to include renewable energy in its electric energy supply

portfolio. Requirements of the renewable portfolio standard

are:

(1) no later than January 1, 2015, renewable

energy shall comprise no less than five percent of each

distribution cooperative's total retail sales to New Mexico

customers;

(2) the renewable portfolio standard shall

increase by one percent per year thereafter until January 1,

2020, at which time the renewable portfolio standard shall be

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ten percent of the distribution cooperative's total retail

sales to New Mexico customers;

(3) the renewable portfolio standard of each

distribution cooperative shall be diversified as to the type

of renewable energy resource, taking into consideration the

overall reliability, availability, dispatch flexibility and

the cost of the various renewable energy resources made

available to the distribution cooperative by its suppliers of

electric power; and

(4) renewable energy resources that are in a

distribution cooperative's energy supply portfolio on January

1, 2008 shall be counted in determining compliance with this

section.

B. If a distribution cooperative determines that,

in any given year, the cost of renewable energy that would

need to be procured or generated for purposes of compliance

with the renewable portfolio standard would be greater than

the reasonable cost threshold, the distribution cooperative

shall not be required to incur that cost; provided that the

existence of this condition excusing performance in any given

year shall not operate to delay any renewable portfolio

standard in subsequent years. For purposes of the Rural

Electric Cooperative Act, "reasonable cost threshold" means

an amount that shall be no greater than one percent of the

distribution cooperative's gross receipts from business

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transacted in New Mexico for the preceding calendar year.

C. By March 1 of each year, a distribution

cooperative shall file with the public regulation commission

a report on its purchases and generation of renewable energy

during the preceding calendar year. The report shall include

the cost of the renewable energy resources purchased and

generated by the distribution cooperative to meet the

renewable portfolio standard.

D. A distribution cooperative shall report to its

membership a summary of its purchases and generation of

renewable energy during the preceding calendar year."

Section 2. A new section of the Rural Electric

Cooperative Act is enacted to read:

"RENEWABLE ENERGY CERTIFICATES--COMMISSION DUTIES.--The

public regulation commission shall establish:

A. a system of renewable energy certificates that

can be used by a distribution cooperative to establish

compliance with the renewable portfolio standard and that may

include certificates that are monitored, accounted for or

transferred by or through a regional system or trading

program for any region in which a rural electric cooperative

is located. The kilowatt-hour value of renewable energy

certificates may be varied by renewable energy resource or

technology; provided that each renewable energy certificate

shall have a minimum value of one kilowatt-hour for purposes

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of compliance with the renewable portfolio standard; and

B. requirements and procedures concerning

renewable energy certificates that include the provisions

that:

(1) renewable energy certificates:

(a) are owned by the generator of the

renewable energy unless: 1) the renewable energy

certificates are transferred to the purchaser of the energy

through specific agreement with the generator; 2) the

generator is a qualifying facility, as defined by the federal

Public Utility Regulatory Policies Act of 1978, in which case

the renewable energy certificates are owned by the

distribution cooperative purchaser of the renewable energy

unless retained by the generator through specific agreement

with the distribution cooperative purchaser of the energy; or

3) a contract for the purchase of renewable energy is in

effect prior to January 1, 2004, in which case the renewable

energy certificates are owned by the purchaser of the energy

for the term of such contract;

(b) may be traded, sold or otherwise

transferred by their owner to any other party; provided that

the transfers and use of the certificate by a distribution

cooperative for compliance with the renewable energy

portfolio standard shall require the electric energy

represented by the certificate to be contracted for delivery

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or consumed, or generated by an end-use customer of the

distribution cooperative in New Mexico unless the commission

determines that the distribution cooperative is participating

in a national or regional market for exchanging renewable

energy certificates;

meeting the renewable portfolio standard shall be registered,

beginning January 1, 2008, with a renewable energy generation

information system that is designed to create and track

ownership of renewable energy certificates and that, through

the use of independently audited generation data, verifies

the generation and delivery of electricity associated with

each renewable energy certificate and protects against

multiple counting of the same renewable energy certificate;

(d) that are used once by a

distribution cooperative to satisfy the renewable portfolio

standard and are retired or that are traded, sold or

otherwise transferred by the distribution cooperative shall

not be further used by the distribution cooperative; and

(e) that are not used by a distribution

cooperative to satisfy the renewable portfolio standard or

that are not traded, sold or otherwise transferred by the

distribution cooperative may be carried forward for up to

four years from the date of issuance and, if not used by that

time, shall be retired by the distribution cooperative; and

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(2) a distribution cooperative shall be

responsible for demonstrating that a renewable energy

certificate used for compliance with the renewable portfolio

standard is derived from eligible renewable energy resources

and has not been retired, traded, sold or otherwise

transferred to another party."

Section 3. A new section of the Rural Electric

Cooperative Act is enacted to read:

"RENEWABLE ENERGY AND CONSERVATION FEE.--

A. A distribution cooperative may collect from its

customers a renewable energy and conservation fee of no more

than one percent of the customer's bill. In no event shall a

distribution cooperative collect more than seventy-five

thousand dollars ($75,000) annually through the renewable

energy and conservation fee from any single customer. Money

collected through the renewable energy and conservation fee

shall be segregated in a separate renewable energy and

conservation account from other distribution cooperative

funds and shall be expended only on programs or projects to

promote the use of renewable energy, load management or

energy efficiency. A distribution cooperative that collects

a renewable energy and conservation fee from its customers

shall report to the public regulation commission by March 1

of the following year the following information:

(1) the amount of money collected through

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the renewable energy and conservation fee in the previous

calendar year;

(2) the programs or projects on which the

funds collected were expended; and

(3) the determination of the distribution

cooperative as to whether and in what amount to assess a

renewable energy and conservation fee in the next calendar

year.

B. Each distribution cooperative that collects a

renewable energy and conservation fee from its customers

shall deduct from the fees paid to the state pursuant to

Section 62-8-8 NMSA 1978 an amount equal to fifty percent of

the amount of money collected through the renewable energy

and conservation fee during the preceding calendar year. The

money shall be included in the account with other money from

the renewable energy and conservation fee and expended only

on programs or projects to promote the use of renewable

energy, load management or energy efficiency."

Section 4. A new section of the Rural Electric

Cooperative Act is enacted to read:

" DEFINITIONS--ENERGY EFFICIENCY--RENEWABLE ENERGY.--As

used in the Rural Electric Cooperative Act:

A. "energy efficiency" means measures, including

energy conservation measures, or programs that target

consumer behavior, equipment or devices to result in a

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decrease in consumption of electricity without reducing the

amount or quality of energy services; and

B. "renewable energy" means electric energy:

(1) generated by use of low- or

zero-emissions generation technology with substantial

long-term production potential; and

(2) generated by use of renewable energy

resources that may include:

(a) solar, wind and geothermal

resources;

(b) hydropower facilities brought in

service after July 1, 2007;

fueled; and

(d) biomass resources, such as

agriculture or animal waste, small diameter timber, salt

cedar and other phreatophyte or woody vegetation removed from

river basins or watersheds in New Mexico, landfill gas and

anaerobically digested waste biomass; but

(3) does not include electric energy

generated by use of fossil fuel or nuclear energy."

Section 5. Section 62-16-1 NMSA 1978 (being Laws 2004,

Chapter 65, Section 1) is amended to read:

"62-16-1. SHORT TITLE.--Chapter 62, Article 16 NMSA

1978 may be cited as the "Renewable Energy Act"."

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Section 6. Section 62-16-2 NMSA 1978 (being Laws 2004,

Chapter 65, Section 2) is amended to read:

"62-16-2. FINDINGS AND PURPOSES.--

A. The legislature finds that:

(1) the generation of electricity through

the use of renewable energy presents opportunities to promote

energy self-sufficiency, preserve the state's natural

resources and pursue an improved environment in New Mexico;

(2) the use of renewable energy by public

utilities subject to commission oversight in accordance with

the Renewable Energy Act can bring significant economic

benefits to New Mexico;

(3) public utilities should be required to

include prescribed amounts of renewable energy in their

electric energy supply portfolios for sales to retail

customers in New Mexico by prescribed dates;

(4) public utilities should be able to

recover their reasonable costs incurred to procure or

generate energy from renewable energy resources used to meet

the requirements of the Renewable Energy Act;

(5) a public utility should have incentives

to go beyond the minimum requirements of the renewable

portfolio standard;

(6) public utilities should not be required

to acquire energy generated from renewable energy resources

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that could result in costs above a reasonable cost threshold;

and

(7) it may serve the public interest for

public utilities to participate in national or regional

renewable energy trading.

B. The purposes of the Renewable Energy Act are

to:

(1) prescribe the amounts of renewable

energy resources that public utilities shall include in their

electric energy supply portfolios for sales to retail

customers in New Mexico by prescribed dates;

(2) allow public utilities to recover costs

through the rate-making process incurred for procuring or

generating renewable energy used to comply with the

prescribed amount; and

(3) protect public utilities and their

ratepayers from renewable energy costs that are above a

reasonable cost threshold."

Section 7. Section 62-16-3 NMSA 1978 (being Laws 2004,

Chapter 65, Section 3) is amended to read:

"62-16-3. DEFINITIONS.--As used in the Renewable Energy

Act:

A. "commission" means the public regulation

commission;

B. "municipality" means a municipal corporation,

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organized under the laws of the state, and H class counties;

C. "public utility" means an entity certified by

the commission to provide retail electric service in New

Mexico pursuant to the Public Utility Act but does not

include rural electric cooperatives;

D. "reasonable cost threshold" means the cost

established by the commission above which a public utility

shall not be required to add renewable energy to its electric

energy supply portfolio pursuant to the renewable portfolio

standard;

E. "renewable energy" means electric energy:

(1) generated by use of low- or

zero-emissions generation technology with substantial

long-term production potential; and

(2) generated by use of renewable energy

resources that may include:

(a) solar, wind and geothermal

resources;

(b) hydropower facilities brought in

service after July 1, 2007;

fueled; and

(d) biomass resources, such as

agriculture or animal waste, small diameter timber, salt

cedar and other phreatophyte or woody vegetation removed from

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river basins or watersheds in New Mexico, landfill gas and

anaerobically digested waste biomass; but

(3) does not include electric energy

generated by use of fossil fuel or nuclear energy;

F. "renewable energy certificate" means a

certificate or other record, in a format approved by the

commission, that represents all the environmental attributes

from one kilowatt-hour of electricity generation from a

renewable energy resource;

G. "renewable portfolio standard" means the

percentage of retail sales by a public utility to electric

consumers in New Mexico that is required by the Renewable

Energy Act to be supplied by renewable energy; and

H. "renewable purchased power agreement" means an

agreement that binds an entity generating power from

renewable energy resources to provide power at a specified

price and binds a public utility to purchase the power at

that price."

Section 8. Section 62-16-4 NMSA 1978 (being Laws 2004,

Chapter 65, Section 4) is amended to read:

"62-16-4. RENEWABLE PORTFOLIO STANDARD.--

A. A public utility shall meet the renewable

portfolio standard requirements, as provided in this section,

to include renewable energy in its electric energy supply

portfolio. Requirements of the renewable portfolio standard

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are:

(1) for public utilities other than rural

electric cooperatives and municipalities:

(a) no later than January 1, 2006,

renewable energy shall comprise no less than five percent of

each public utility's total retail sales to New Mexico

customers;

(b) no later than January 1, 2011,

renewable energy shall comprise no less than ten percent of

each public utility's total retail sales to New Mexico

customers;

renewable energy shall comprise no less than fifteen percent

of each public utility's total retail sales to New Mexico

customers; and

(d) no later than January 1, 2020,

renewable energy shall comprise no less than twenty percent

of each public utility's total retail sales to New Mexico

customers;

(2) the renewable portfolio standard

established by this section shall be reduced, as necessary,

to provide for the following specific procurement

requirements for nongovernmental customers at a single

location or facility, regardless of the number of meters at

that location or facility, with consumption exceeding ten

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million kilowatt-hours per year. On and after January 1,

2006, the kilowatt-hours of renewable energy procured for

these customers shall be limited so that the additional cost

of the renewable portfolio standard to each customer does not

exceed the lower of one percent of that customer's annual

electric charges or forty-nine thousand dollars ($49,000).

This procurement limit criteria shall increase by one-fifth

percent or ten thousand dollars ($10,000) per year until

January 1, 2011, when the procurement limit criteria shall

remain fixed at the lower of two percent of that customer's

annual electric charges or ninety-nine thousand dollars

($99,000). After January 1, 2012, the commission may adjust

the ninety-nine-thousand-dollar ($99,000) limit for

inflation. Nothing contained in this paragraph shall be

construed as affecting a public utility's right to recover

all reasonable costs of complying with the renewable

portfolio standard, pursuant to Section 62-16-6 NMSA 1978.

The commission may authorize deferred recovery of the costs

of complying with the renewable portfolio standard, including

carrying charges;

(3) the renewable portfolio shall be

diversified as to the type of renewable energy resource,

taking into consideration the overall reliability,

availability, dispatch flexibility and cost of the various

renewable energy resources made available by suppliers and

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generators;

(4) upon a commission motion or application

by a public utility, the commission shall open a docket to

provide appropriate performance-based financial or other

incentives to encourage public utilities to acquire renewable

energy supplies that exceed the applicable annual renewable

portfolio standard set forth in this section. The commission

shall initiate rules by June 1, 2008 to implement this

subsection; and

(5) renewable energy resources that are in a

public utility's electric energy supply portfolio on July 1,

2004 shall be counted in determining compliance with this

section.

B. If a public utility finds that, in any given

year, the cost of renewable energy that would need to be

procured or generated for purposes of compliance with the

renewable portfolio standard would be greater than the

reasonable cost threshold as established by the commission

pursuant to this section, the public utility shall not be

required to incur that cost; provided that the existence of

this condition excusing performance in any given year shall

not operate to delay the annual increases in the renewable

portfolio standard in subsequent years. When a public

utility can generate or procure renewable energy at or below

the reasonable cost threshold, it shall be required to add

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renewable energy resources to meet the renewable portfolio

standard applicable in the year when the renewable energy

resources are being added.

C. By December 31, 2004, the commission shall

establish, after notice and hearing, the reasonable cost

threshold above which level a public utility shall not be

required to add renewable energy to its electric energy

supply portfolio pursuant to the renewable portfolio

standard. The commission may thereafter modify the

reasonable cost threshold as changing circumstances warrant,

after notice and hearing. In establishing and modifying the

reasonable cost threshold, the commission shall take into

account:

(1) the price of renewable energy at the

point of sale to the public utility;

(2) the transmission and interconnection

costs required for the delivery of renewable energy to retail

customers;

(3) the impact of the cost for renewable

energy on overall retail customer rates;

(4) the overall diversity, reliability,

availability, dispatch flexibility, cost per kilowatt-hour

and life-cycle cost on a net present value basis of renewable

energy resources available from suppliers; and

(5) other factors, including public

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benefits, that the commission deems relevant; provided that

nothing in the Renewable Energy Act shall be construed to

permit regulation by the commission of the production or sale

price at the point of production of the renewable energy.

D. By September 1, 2007 and July 1 of each year

thereafter until 2022, and thereafter as determined necessary

by the commission, a public utility shall file a report to

the commission on its procurement and generation of renewable

energy during the prior calendar year and a procurement plan

that includes:

(1) the cost of procurement for any new

renewable energy resource in the next calendar year required

to comply with the renewable portfolio standard; and

(2) testimony and exhibits that demonstrate

that the proposed procurement is reasonable as to its terms

and conditions considering price, availability,

dispatchability, any renewable energy certificate values and

diversity of the renewable energy resource; or

(3) demonstration that the plan is otherwise

in the public interest.

E. The commission shall approve or modify a public

utility's procurement or transitional procurement plan within

ninety days and may approve the plan without a hearing,

unless a protest is filed that demonstrates to the

commission's reasonable satisfaction that a hearing is

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necessary. The commission may modify a plan after notice and

hearing. The commission may, for good cause, extend the time

to approve a procurement plan for an additional ninety days.

If the commission does not act within the ninety-day period,

the procurement plan is deemed approved.

F. The commission may reject a procurement or

transitional procurement plan if it finds that the plan does

not contain the required information and, upon the rejection,

may suspend the public utility's obligation to procure

additional resources for the time necessary to file a revised

plan; provided that the total amount of renewable energy to

be procured by the public utility shall not change.

G. A public utility may file a transitional

procurement plan requesting that the commission determine

that the costs of renewable energy resources that the public

utility has committed to, or may commit to, prior to the

commission's establishing a reasonable cost threshold, are

reasonable and recoverable pursuant to Section 62-16-6 NMSA

1978. The requirements of annual procurement plan filings

shall be applicable to any transitional procurement plan

filing pursuant to this section.

H. The commission shall determine if it is in the

public interest for the commission to provide appropriate

performance-based financial or other incentives to encourage

public utilities to acquire renewable energy supplies in

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amounts that exceed the requirements of the renewable

portfolio standard."

Section 9. Section 62-16-5 NMSA 1978 (being Laws 2004,

Chapter 65, Section 5) is amended to read:

"62-16-5. RENEWABLE ENERGY CERTIFICATES--COMMISSION

DUTIES.--The commission shall establish:

A. a system of renewable energy certificates that

can be used by a public utility to establish compliance with

the renewable portfolio standard and that may include

certificates that are monitored, accounted for or transferred

by or through a regional system or trading program for any

region in which a public utility is located. The

kilowatt-hour value of renewable energy certificates may be

varied by renewable energy resource or technology; provided

that each renewable energy certificate shall have a minimum

value of one kilowatt-hour of renewable energy represented by

the certificate for purposes of compliance with the renewable

portfolio standard; and

B. requirements and procedures concerning

renewable energy certificates that include the provisions

that:

(1) renewable energy certificates:

(a) are owned by the generator of the

renewable energy unless: 1) the renewable energy

certificates are transferred to the purchaser of the energy

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through specific agreement with the generator; 2) the

generator is a qualifying facility, as defined by the federal

Public Utility Regulatory Policies Act of 1978, in which case

the renewable energy certificates are owned by the public

utility purchaser of the renewable energy unless retained by

the generator through specific agreement with the public

utility purchaser of the energy; or 3) a contract for the

purchase of renewable energy is in effect prior to January 1,

2004, in which case the renewable energy certificates are

owned by the purchaser of the energy for the term of such

contract;

(b) may be traded, sold or otherwise

transferred by their owner to any other party; provided that

the transfers and use of the certificate by a public utility

for compliance with the renewable energy portfolio standard

shall require the electric energy represented by the

certificate to be contracted for delivery, or consumed or

generated by an end-use customer of the public utility in New

Mexico unless the commission determines that there is a

national or regional market for exchanging renewable energy

certificates;

meeting the renewable portfolio standard shall be registered,

beginning January 1, 2009, with a renewable energy generation

information system that is designed to create and track

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ownership of renewable energy certificates and that, through

the use of independently audited generation data, verifies

the generation and delivery of electricity associated with

each renewable energy certificate and protects against

multiple counting of the same renewable energy certificate;

(d) that are used once by a public

utility to satisfy the renewable portfolio standard and are

retired or that are traded, sold or otherwise transferred by

the public utility shall not be further used by the public

utility; and

(e) that are not used by a public

utility to satisfy the renewable portfolio standard or that

are not traded, sold or otherwise transferred by the public

utility may be carried forward for up to four years from the

date of issuance and, if not used by that time, shall be

retired by the public utility; and

(2) a public utility shall be responsible

for demonstrating that a renewable energy certificate used

for compliance with the renewable portfolio standard is

derived from eligible renewable energy resources and has not

been retired, traded, sold or otherwise transferred to

another party."

Section 10. Section 62-16-6 NMSA 1978 (being Laws 2004,

Chapter 65, Section 6) is amended to read:

"62-16-6. COST RECOVERY FOR RENEWABLE ENERGY.--

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A. A public utility that procures or generates

renewable energy shall recover, through the rate-making

process, the reasonable costs of complying with the renewable

portfolio standard. Costs that are consistent with

commission approval of procurement plans or transitional

procurement plans shall be deemed to be reasonable.

B. The commission shall not exclude from such

recovery reasonable interconnection and transmission costs

incurred by the public utility in order to deliver renewable

energy to retail New Mexico customers.

C. Upon a commission motion or application by a

public utility, the commission shall open a docket to provide

appropriate performance-based financial or other incentives

to encourage public utilities to acquire renewable energy

supplies that exceed the applicable annual renewable

portfolio standard pursuant to the Renewable Energy Act. The

commission shall initiate rules by June 1, 2008 to implement

this subsection."

Section 11. Section 62-16-8 NMSA 1978 (being Laws 2004,

Chapter 65, Section 8) is amended to read:

"62-16-8. RURAL ELECTRIC COOPERATIVE--VOLUNTARY

TARIFFS.--

A. The commission may require that a rural

electric cooperative:

(1) offer its retail customers a voluntary

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program for purchasing renewable energy under rates and terms

that are approved by the commission, but only to the extent

that the cooperative's suppliers make renewable energy

available under wholesale power contracts;

(2) report to the commission the demand for

renewable energy pursuant to a voluntary program; and

(3) comply with the requirements for the

procurement of renewable energy set forth in the Rural

Electric Cooperative Act.

B. The commission shall establish and amend rules

and regulations for the implementation of renewable portfolio

standards consistent with the Rural Electric Cooperative

Act."

Section 12. Section 62-17-1 NMSA 1978 (being Laws 2005,

Chapter 341, Section 1) is amended to read:

"62-17-1. SHORT TITLE.--Chapter 62, Article 17 NMSA

1978 may be cited as the "Efficient Use of Energy Act"."

Section 13. Section 62-17-5 NMSA 1978 (being Laws 2005,

Chapter 341, Section 5) 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 investments in cost-effective energy

efficiency and load management to be an acceptable use of

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ratepayer money.

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 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 and implementation of the

programs from commission staff, the attorney general, the

energy, minerals and natural resources department and other

interested parties.

F. The commission shall, upon petition or its own

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motion, open a docket to identify any disincentives or

barriers that may exist for public utility expenditures on

energy efficiency and load management measures and, if found,

ensure that they are eliminated and that an appropriate

ratemaking treatment and performance-based, financial or

other incentives are considered in order that public

utilities are financially neutral in their preference for

acquiring demand- or supply-side utility resources.

G. Public utilities shall set a goal of at least

five percent reduction by January 1, 2020 in total retail

sales to New Mexico customers, adjusted for load growth."

Section 14. Section 62-17-6 NMSA 1978 (being Laws 2005,

Chapter 341, Section 6) is amended to read:

"62-17-6. COST RECOVERY.--

A. A public utility that undertakes cost-effective

energy efficiency and load management programs shall recover

the costs of all the programs implemented after the effective

date of the Efficient Use of Energy Act through an approved

tariff rider. Program costs may be deferred for future

recovery through creation of a regulatory asset, provided

that the deferred recovery does not cause the tariff rider to

exceed the limits imposed by this section. The tariff rider

for any utility customer shall not exceed the lower of the

commission's approved tariff for that customer's bill or

seventy-five thousand dollars ($75,000) per year except that,

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upon application by a public utility with the advice and

consent of the entity designated by law to represent

residential and commercial utility customers, the commission

may approve a tariff rider in excess of the commission's

approved tariff for customers other than large customers and

may approve a tariff rider in excess of the lower of the

commission's approved tariff or seventy-five thousand dollars

($75,000) per year for a large customer that consents to such

a rider. The commission shall approve such applications upon

finding that the proposed energy efficiency and load

management programs are cost-effective and that the cost

recovery proposal is just and reasonable.

B. The tariff rider shall provide for the

recovery, on a monthly basis or otherwise, of all reasonable

costs of approved energy efficiency and load management

programs.

C. A tariff rider proposed by a public utility to

fund approved energy efficiency and load management programs

shall go into effect thirty days after filing, unless

suspended by the commission for a period not to exceed one

hundred eighty days. If the tariff rider is not approved or

suspended within thirty days after filing, it shall be deemed

approved as a matter of law. If the commission has not acted

to approve or disapprove the tariff rider by the end of an

ordered suspension period, it shall be deemed approved as a

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matter of law. The commission shall approve utility

reconciliations of the tariff rider annually based upon

recovery of the reasonable costs of the utility's programs.

D. The commission shall ensure that there are no

cross-subsidies between a public utility's energy efficiency

and load management activities and the public utility's

supply-side activities and shall ensure that the existence of

a tariff rider does not permit a public utility to earn an

excessive rate of return."

Section 15. EFFECTIVE DATE.--The effective date of the

provisions of this act is July 1, 2007.