Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Dixon/Gonzales/Chatfield/Sanchez/Vin
cent
LAST UPDATED
ORIGINAL DATE 2/14/2025
SHORT TITLE Rural Electric Co-op Wildfire Liability
Act
BILL
NUMBER House Bill 334
ANALYST Davidson
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
PRC
No fiscal
impact
$167.5 $177.6 $345.1 Recurring General Fund
EMNRD
No fiscal
impact
$150.0 $150.0 $300.0 Recurring General Fund
Total
No fiscal
impact
$317.5 $327.6 $645.1 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Duplicates Senate Bill 281
Sources of Information
LFC Files
Agency Analysis Received From
Energy, Minerals and Natural Resources Department (EMNRD)
Public Regulation Commission (PRC)
SUMMARY
Synopsis of House Bill 334
House Bill 334 (House Bill 334) creates the Rural Electric Cooperative Wildfire Liability Act,
which requires rural electric cooperatives to develop and submit wildfire mitigations plans to the
Forestry Division of the Energy, Minerals and Natural Resources Department (EMNRD) and to
the Public Regulation Commission (PRC) for approval. The bill also creates limits on the amount
of liability for damage awards for claimants in the event a wildfire is caused by an electric
cooperative’s equipment, operations, was set intentionally by the cooperative, or the cooperatives
conduct was the proximate cause of the wildfire. The bill sets a damage claim ceiling, regardless
of total number of claimants, at $2 million.
The effective date of this bill is July 1, 2025.
House Bill 334 – Page 2
FISCAL IMPLICATIONS
Analysis from EMNRD notes implementation House Bill 334 would require one additional FTE
for technical review and then .5 FTE for legal review. The total for these 1.5 additional FTE
would be an additional $150 thousand in recurring funds.
Analysis from PRC notes implementation of House Bill 334 would require:
1 Utilities Division Engineer I position ($128.6 thousand), 1/16 of Office of General
Counsel attorney ($9,433), 1/8 Legal attorney ($18.2 thousand), 1/16 of a hearing
examiner ($11.3 thousand). For a total of annual cost to PRC of $167.5 thousand in FY26
and $ $177.6 thousand in FY27.
SIGNIFICANT ISSUES
Wildfires. Wildfires will be an ever-present part of the state’s future, and the state’s risk of
wildfires will only increase as snowpacks decline, average precipitation drops, and average
temperatures rise. New Mexico already has a higher risk of wildfire compared to 82 percent of
states in the United States. Wildfire risk is based on likelihood, intensity, exposure, and
susceptibility. New Mexico is in the 86th percentile for wildfire risk to homes.
In New Mexico, 46 percent of homes and buildings are located in direct exposure areas, meaning
they are adjacent to flammable vegetation and indirect sources, such as embers and home-to-
home ignition. The remaining homes are in areas with minimum exposure (or not likely to be
subjected to wildfire) or in indirect exposure (close to indirect sources).
Analysis from the Western Fire Chiefs Association notes between 2016 and 2020, 19 percent of
all wildfires were caused by electric power networks, typically from either downed lines,
vegetation contact, conductor slap, or repetitive faults. The largest fire in Texas’s history was
caused by equipment issues from a utility company and the fires in Maui were also ignited by
power lines.
1
The analysis identifies best practices for wildfire prevention for utilities and
electricity providers is vegetation management, undergrounding distribution lines, investing it
installing sensors with fast-trip settings, and investing in innovation of electrical grids.
2
Agency Analysis. Analysis from PRC notes House Bill 334 would require the agency to add
wildfire mitigation expertise to the agency’s review process in order to credibly assess the
wildfire cooperative plans the bill would require. While not specifically called for in the bill,
PRC analysis notes the additional expertise would be necessary.
PRC analysis expresses concerns relating to the bill’s reference to non-confidential plans being
posted within thirty days of approval:
HB334 appears to contemplate a dimension of confidentiality that will necessarily pertain
to such review proceedings. See Section 4, Paragraph E (discussing the public posting of
non-confidential versions of the plan), which suggests by implication that the plan
submitted for the Commission’s review will contain confidential information. This
further implicates Commission process referable to information deemed confidential,
1
https://www.nytimes.com/2024/03/22/business/energy-environment/electric-utilities-wildfires-climate-change.html
2
https://wfca.com/wildfire-articles/power-lines-and-wildfires/ House Bill 334 – Page 3
which will complicate the review by, for example, necessitating the entry of an
appropriate protective order, determining whether and to what extent the plan under
review contains information that actually satisfies the legal standards governing whether
something is or is not confidential in the context of Commission proceedings,
consideration for the segregation of filings that meet the legal standard for being
designated as confidential, the conduct of public proceedings implicated by the review
and consideration of confidential materials against the backdrop of laws such as the Open
Meetings Act, the Inspection of Public Records Act, etc. The procedural implications
resulting from this particular facet of HB334 are myriad and potentially far-reaching.
Analysis from EMNRD notes the bill’s current definition of wildfire is not consistent with the
state’s Forest Conservation Act and recommends the bill be amended to use the definition from
the National Wildland Fire Coordinating Group.
EMNRD analysis notes the bill should be amended to clarify the Forestry Division will only
review the cooperative’s vegetation management plans for reasonableness and not are not liable
for any opinions. EMNRD also recommends adding standards of fuel mitigation to the proposed
wildfire mitigation plans and recommends adding guidance in the bill to electric cooperatives to
monitor national weather and fire service websites for forecasting and awareness.
EMNRD analysis also recommends the bill specify electric cooperative’s emergency wildfire
communication procedures before and during red flag events (high wildfire risk). The list should
include a list emergency contact numbers and/or radio frequencies. EMNRD analysis also notes
the bill should require electric cooperatives to participate in annual pre-wildland fire season
coordination and communication meetings with other stakeholders.
EMNRD analysis recommends the planned review of cooperative plans should be in either the
winter or early spring to provide the Forestry Division with time to review the plan. If the plan
review is within or during Forestry’s filed season, or if it is during an active wildfire, review
could take longer than the proposed 45 days. EMNRD also recommends the review should be
more frequent than every 5 years, due to the variability of fire conditions and other complicating
factors.
EMNRD analysis notes House Bill 334’s limiting of damage claims to $2 million, regardless of
number of claimants or culpability, could not be enough to cover the significant costs associated
with wildfire suppression and recovery. Further, for a state agency to be reimbursed or recover
costs requires a state agency to file suit in a district court; House Bill 334 does not establish
whether an agency may recoup legal or administrative costs associated with the common suit and
reimbursement process.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
House Bill 334 duplicates Senate Bill 281.
Senate Memorial 2 proposes to create a wildfire study group, with stakeholders from electric
cooperatives and investor-owned utilities.
AD/hj