HOUSE BILL 85
49th legislature - STATE OF NEW MEXICO - second session, 2010
INTRODUCED BY
John A. Heaton
AN ACT
RELATING TO ENERGY; AMENDING AND ENACTING SECTIONS OF THE PUBLIC UTILITY ACT TO PROVIDE FOR ELECTRIC UTILITIES TO RECOVER ALL REASONABLE COSTS INCURRED FOR INVESTMENT IN NEW TRANSMISSION FACILITIES THAT ARE CERTIFIED AND APPROVED BY THE PUBLIC REGULATION COMMISSION TO FACILITATE ECONOMIC DEVELOPMENT AND DEVELOPMENT OF RENEWABLE ENERGY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. A new section of the Public Utility Act is enacted to read:
"[NEW MATERIAL] RECOVERY OF TRANSMISSION INFRASTRUCTURE IMPROVEMENT COSTS.--
A. The commission shall adopt rules that provide for an electric utility to recover on an annual basis, through a transmission cost adjustment clause, its reasonable and necessary transmission infrastructure improvement costs and changes in wholesale transmission charges to the electric utility under a regional transmission tariff approved by a federal regulatory authority to the extent that the costs or charges have been incurred since the end of the test year in the electric utility's most recent base-rate case. The commission may allow the electric utility to recover only the costs or charges allocable to its retail customers in the state and shall not allow the electric utility to recover more revenue through the transmission cost adjustment clause than authorized.
B. An electric utility's retail customers in the state shall be held harmless in a base-rate case or a transmission cost recovery case in the event the electric utility, when it had been designated to provide new transmission facilities under the guidelines of the regional transmission organization of which it is a member, declined the opportunity to construct or own, or both, the new transmission facilities itself, to the extent the declined opportunity results in higher costs to the electric utility's retail customers in the state."
Section 2. Section 62-9-1 NMSA 1978 (being Laws 1941, Chapter 84, Section 46, as amended) is amended to read:
"62-9-1. NEW CONSTRUCTION--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 commission may issue an order and a certificate of convenience and necessity to an electric utility to construct or enlarge transmission or transmission-related facilities but only for facilities to be constructed in the utility's New Mexico service area. If the commission issues a certificate of convenience and necessity to an electric utility for transmission and transmission-related facilities, or if the commission orders an electric utility to construct or enlarge transmission or transmission-related facilities that the commission determines are needed for achieving the goals of
promoting economic development or development of renewable energy projects, the commission shall find that the transmission facilities are used and useful for providing public utility service in accordance with this section and are prudent and includable in the utility's rate base.
[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, "mutual domestic water consumer association" means an association created and organized pursuant to the provisions of:
(1) Laws 1947, Chapter 206; Laws 1949, Chapter 79; or Laws 1951, Chapter 52; or
(2) the Sanitary Projects Act."
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