NOTE: As provided in LFC policy, this report is intended 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 in any other situation.

The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.

Only the most recent FIR version, excluding attachments, is available on the Internet/Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Room 416 of the State Capitol Building.

(Parenthesis ( ) Indicate Expenditure Decreases)

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

Attorney General's Office (AG)

Energy, Minerals and Natural Resources Department (EMNRD)

Department of Finance and Administration, Local Government Division (LGD)

SUMMARY

Synopsis of SCORC Amendments

The Senate Corporations and Transportation Committee amendments to SB710 provide for the following:

• •creation of an "electric service extension charge" in the amount of ten cents ($.10) per month per meter and imposed on each retail electric customer of an electric public utility, as opposed to each electric meter of each retail electric consumer as was specified in the original bill;



• •the loan criteria shall specify that loans are to benefit from the fund are to benefit low-income residential individual customers or low-income intended residential individual customers;



• •a county shall not pledge its full faith and credit to guarantee repayment of the loans offered by the PRC; and



• •the PRC shall establish a board composed of representatives from electric public utilities to collect, administer and disburse money from the fund under the control of the PRC pursuant to rules promulgated by the PRC .

Synopsis of Bill

The bill would impose a ten cent monthly surcharge for five years on every public utility electric meter to create a fund to provide low interest loans for ten years to extend electric service throughout rural New Mexico. The bill provides that a county may apply to the Public Regulation Commission (PRC) for a loan based on criteria to be set by the PRC.

Significant Issues

Currently, the cost of line extension in New Mexico is shared by utilities and customers with the utility paying the first $0.6 to $2.0 and the customer paying the remainder.

FISCAL IMPLICATIONS

The EMNRD indicates the newly created electric service extension charge fund could collect approximately $600.0 annually based on 500,000 consumers contributing 10 cents monthly. The fund could provide funding to extend approximately 30 miles of line a year based on cost estimates of $20.0 per mile.

Any funds remaining in the electric service extension charge fund after July 1, 2009 would revert to the general fund. This amount is estimated at approximately $3 million.

ADMINISTRATIVE IMPLICATIONS

The PRC would require FTE to administer the program.

TECHNICAL ISSUES

The bill has no provision for tribal governments to apply to PRC for loans.

Loans made jointly to a county and a public utility could violate the anti-donation clause of the constitution.

The EMNRD indicates the bill could include provisions for the purchase of renewable energy technologies for remote residents.

RAE/gm