NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

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F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

SJC

 

DATE TYPED:

03/07/03

 

HB

 

 

SHORT TITLE:

Water Conservation Plans for Electric Plants

 

SB

172/CSJC

 

 

ANALYST:

Valenzuela

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

 

 

$72.6

Recurring

General Fund

 

 

 

 

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

Duplicates House Bill 292

 

SOURCES OF INFORMATION

 

Legislative Finance Committee files

 

Responses Received From

Public Regulation Commission (PRC)

Energy, Minerals and Natural Resources Department (EMNRD)

Department of Environment (NMED)

 

SUMMARY

 

     Synopsis of the SCONC Amendment

 

The Senate Conservation Committee (SCONC) amendment to Senate Bill 172 makes several substantive revisions to the original bill. First, the amended bill would grandfather existing electric generating plants from the requirements of the bill and thus apply only to new facilities, generating 300 MW, constructed after January 1, 2003. The amendment also expands the water conservation measures available to power plants, or dry cooling technology. The use of hybrid (wet/dry cooling), produced water and wastewater effluent would be acceptable as water conservation improvements.

 

The amendment strikes in its entirety the sections that require a detailed cost-benefit comparison between wet cooling and dry cooling, that require the State Engineer to recommend changes or additions to the power plant application, and that require public noticing and hearings for the application.

 

     Synopsis of Original Bill

 

Senate Bill 172 would make three major changes to existing statute: (1) amends the statute to expand the PRC authority over siting for electric generating plants of 50 megawatts (MW) or more; (2) adds a new section to the Public Utility Act that prohibits PRC approval of construction or expansion of an electric generating plant that uses more than 100 acre-feet of water per year without a water conservation plan that provides evaluations of water conservation techniques such as dry cooling; and (3) repeals the delayed repeal (July 1, 2003) of the Public Utility Act, Chapter 63 Article 7 NMSA 1978, the Telephone and Telegraph Company Certification Act, the New Mexico Telecommunications Act, and the Cellular Telephone Services Act.

 

     Significant Issues

 

The new section added to the Public Utility Act is designed to encourage electric utilities to consider water-saving operating technologies, such as dry cooling. The bill includes several provisions outlining requirements for a utility who intends to construct or expand its plants.

 

New Mexico’s electric generating facilities use approximately 68,000 acre feet of water, annually, which represents roughly 2 percent of total water use in the state. As examples, the San Juan Generating Station uses 22,000 acre feet/year and the Four Corners Generating Station uses 30,000 acre feet/year. Representatives of the Public Service Company of New Mexico (PNM) have testified about potential concerns with dry cooling technology: it could add 5 to 10 percent to the construction cost of a new facility and could decrease operating efficiency by 10 percent.

 

To date, several companies have planned construction of more than 15 power plants throughout New Mexico. However, the downturn in the economy has stalled these projects.

 

FISCAL IMPLICATIONS

 

Senate Bill 172 does not contain an appropriation. However, enactment could increase the workload on the Utility Division staff. The PRC reports that it will require one additional staff position to deal with the increased workload. The estimate for this staff position, including benefits, is $72.6, which would be paid from the general fund.

 

MFV/sb/njw:yr