HOUSE BILL 637
54th legislature - STATE OF NEW MEXICO - first session, 2019
RELATING TO PUBLIC UTILITIES; CREATING A PRESUMPTION OF LIMITED USEFUL LIFE FOR CERTAIN NEW ELECTRICAL GENERATING PLANTS.
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--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 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. 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.
E. In determining whether the public convenience and necessity require or will require construction or operation of an electrical generation plant by a public utility on or after July 1, 2019, the commission shall deem that the useful life of any plant designed to emit five hundred pounds or more of carbon dioxide into the atmosphere for every megawatt-hour of electricity produced shall end no later than December 31, 2039. Approval of construction of a plant designed to emit five hundred pounds or more of carbon dioxide into the atmosphere for every megawatt-hour of electricity produced pursuant to this section shall not be interpreted to prevent the commission from subsequently determining, prior to December 31, 2039, that such plant is no longer used and useful, or that the commission shall be required to use December 31, 2039 as the end of the plant's useful life for ratemaking purposes. As used in this subsection, "operation" of an electrical generation plant by a public utility shall include any contractual arrangement by which the output of such plant is committed to the service of the public utility's customers for a period of ten years or longer."
SECTION 2. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2019.
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