HGEIC/HB 93/a
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AN ACT
RELATING TO UTILITIES; PROVIDING FOR THE INCLUSION OF
ADVANCED GRID TECHNOLOGY PROJECTS BY PUBLIC UTILITIES WHEN
FILING AN APPLICATION FOR APPROVAL OF GRID MODERNIZATION
PROJECTS TO THE PUBLIC REGULATION COMMISSION; ALLOWING
UTILITIES TO RECOVER FROM CUSTOMERS COSTS FOR ADVANCED GRID
TECHNOLOGY PROJECTS; INCLUDING ADVANCED GRID TECHNOLOGIES IN
UTILITY INTEGRATED RESOURCE PLANS AND THE ANNUAL REPORTS OF
DISTRIBUTION COOPERATIVE UTILITIES; PERMITTING THE GENERATION
AND DISTRIBUTION OF SELF-SOURCED POWER.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 62-8-13 NMSA 1978 (being Laws 2020,
Chapter 15, Section 3, as amended) is amended to read:
"62-8-13. APPLICATION FOR GRID MODERNIZATION PROJECTS--
ADVANCED GRID TECHNOLOGY PROJECTS.--
A. A public utility may file an application with
the commission to approve grid modernization projects that
are needed by the utility, or upon request of the commission.
Applications may include requests for approval of investments
or incentives to facilitate grid modernization, rate designs
or programs that incorporate the use of technologies,
equipment or infrastructure associated with grid
modernization and customer education and outreach programs
that increase awareness of grid modernization programs and of HGEIC/HB 93/a
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the benefits of grid modernization. Applications shall
include the utility's estimate of costs for grid
modernization projects. Applications may include requests
for approval of advanced grid technology projects pursuant to
Subsection G of this section. Applications for grid
modernization projects shall be filed pursuant to Sections
62-9-1 and 62-9-3 NMSA 1978, as applicable.
B. When considering applications for approval, the
commission shall review the reasonableness of a proposed grid
modernization project and as part of that review shall
consider whether the requested investments, incentives,
programs and expenditures are:
(1) reasonably expected to improve the
public utility's electrical system efficiency, reliability,
resilience and security; maintain reasonable operations,
maintenance and ratepayer costs; and meet energy demands
through a flexible, diversified and distributed energy
portfolio, including energy standards established in Section
62-16-4 NMSA 1978;
(2) designed to support connection of New
Mexico's electrical grid into regional energy markets and
increase New Mexico's capability to supply regional energy
needs through export of clean and renewable electricity;
(3) reasonably expected to increase access
to and use of clean and renewable energy, with consideration HGEIC/HB 93/a
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given for increasing access to low-income users and users in
underserved communities;
(4) designed to contribute to the reduction
of air pollution, including greenhouse gases;
(5) reasonably expected to support increased
product and program offerings by utilities to their
customers; allow for private capital investments and skilled
jobs in related services; and provide customer protection,
information or education;
(6) transparent, incorporating public
reporting requirements to inform project design and
commission policy; and
(7) otherwise consistent with the state's
grid modernization planning process and priorities.
C. Except as provided in Subsection D of this
section, a public utility that undertakes grid modernization
projects approved by the commission may recover its
reasonable costs through an approved tariff rider or in base
rates, or by a combination of the two. Costs that are no
greater than the amount approved by the commission for a
utility grid modernization project are presumed to be
reasonable. A tariff rider proposed by a public utility to
fund approved grid modernization projects shall go into
effect thirty days after filing, unless suspended by the
commission for a period not to exceed one hundred eighty HGEIC/HB 93/a
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days. If the tariff rider is not approved or suspended
within thirty days after filing, it shall be deemed approved
as a matter of law. If the commission has not acted to
approve or disapprove the tariff rider by the end of the
suspension period, it shall be deemed approved as a matter of
law.
D. Costs for a grid modernization project that
only benefits customers of an electric distribution system
shall not be recovered from customers served at a level of
one hundred ten thousand volts or higher from an electric
transmission system in New Mexico, except for advanced grid
technology projects pursuant to Subsection G of this section.
E. The provisions of this section do not apply to
a distribution cooperative organized pursuant to the Rural
Electric Cooperative Act.
F. As used in this section, "grid modernization"
means improvements to electric distribution or transmission
infrastructure through investments in assets, technologies or
services that are designed to modernize the electrical system
by enhancing electric distribution or transmission grid
reliability, resilience, interconnection of distributed
energy resources, distribution system efficiency, grid
security against cyber and physical threats, customer service
or energy efficiency and conservation and includes:
(1) advanced metering infrastructure and HGEIC/HB 93/a
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associated communications networks;
(2) intelligent grid devices for real-time
or near-real-time system and asset information;
(3) automated control systems for electric
transmission and distribution circuits and substations;
(4) high-speed, low-latency communications
networks for grid device data exchange and remote and
automated control of devices;
(5) distribution system hardening projects
for circuits and substations designed to reduce service
outages or service restoration times, but does not include
the conversion of overhead tap lines to underground service;
(6) physical security measures at critical
distribution substations;
(7) cybersecurity measures;
(8) systems or technologies that enhance or
improve distribution system planning capabilities by the
public utility;
(9) technologies to enable demand response;
(10) energy storage systems and microgrids
that support circuit-level grid stability, power quality,
reliability or resiliency or provide temporary backup energy
supply;
(11) infrastructure and equipment necessary
to support electric vehicle charging or the electrification HGEIC/HB 93/a
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of community infrastructure or industrial production,
processing or transportation; and
(12) new customer information platforms
designed to provide improved customer access, greater service
options and expanded access to energy usage information.
G. When considering advanced grid technology
projects for approval, the commission shall review the
reasonableness of the projects proposed and whether the
investments, programs and expenditures of the project would:
(1) reduce costs to ratepayers by avoiding
or deferring the need for investment in new generation or
transmission, including new rights of way;
(2) assist with ensuring grid reliability,
including transmission and distribution system stability,
while integrating sources of renewable energy into the grid;
(3) support the diversification of energy
resources and enhance grid security;
(4) reduce greenhouse gases and other air
pollutants resulting from power generation, as required by
the energy standards established pursuant to Section 62-16-4
NMSA 1978;
(5) be reasonably expected to increase
access to and the use of clean and renewable energy, with
consideration given for increasing access for low-income
users and users in underserved communities; HGEIC/HB 93/a
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(6) be consistent with the state's grid
modernization planning and priorities; and
(7) be the most cost effective among
feasible alternatives, taking into consideration future
benefits for customers that may reasonably result from the
selection of advanced transmission technologies.
H. As used in this section, "advanced grid
technology project" means a project that is consistent with
the priorities of the state's grid modernization planning and
that is contemplated by a utility's most recent integrated
resource plan or most recent grid modernization plan that
makes use of advanced grid technologies."
SECTION 2. A new section of Chapter 62, Article 8 NMSA
1978 is enacted to read:
"DEFINITIONS.--As used in Chapter 62, Article 8 NMSA
1978:
A. "advanced conductor" means a conductor that has
a direct current electrical resistance at least ten percent
lower than existing conductors of a similar diameter while
simultaneously increasing the energy carrying capacity by at
least seventy-five percent;
B. "advanced grid technology" means hardware or
software technology that increases the efficiency, capacity
or reliability of existing or new electric transmission and
distribution systems, facilities and equipment and includes HGEIC/HB 93/a
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advanced conductors, thermal ratings, grid enhancing
technology and technology determined by the commission or the
federal energy regulation commission to increase the
efficiency, capacity or reliability of an existing or new
transmission facility;
C. "advanced power flow controllers" means
hardware or software technology used to push or pull electric
power in a manner that balances overloaded lines and
underused corridors within a distribution or transmission
system;
D. "dynamic line ratings" means hardware or
software technology used to appropriately update the
calculated thermal limits of existing distribution or
transmission lines based on real-time and forecasted weather
conditions;
E. "grid enhancing technology" means hardware or
software technology that reduces congestion or enhances the
flexibility of electric transmission and distribution systems
by increasing the capacity of a line or rerouting electricity
from overloaded to uncongested lines while maintaining
industry safety standards and includes dynamic line ratings,
advanced power flow controllers and topology optimization;
and
F. "topology optimization" means hardware or
software technology that identifies reconfigurations of the HGEIC/HB 93/a
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distribution or transmission grid and can enable the routing
of power flows around congested or overloaded distribution or
transmission elements."
SECTION 3. Section 62-17-4 NMSA 1978 (being Laws 2005,
Chapter 341, Section 4, as amended) is amended to read:
"62-17-4. DEFINITIONS.--As used in the Efficient Use of
Energy Act:
A. "achievable" means those energy efficiency or
load management resources available to the utility using its
best efforts;
B. "advanced conductor" means a conductor that has
a direct current electrical resistance at least ten percent
lower than existing conductors of a similar diameter while
simultaneously increasing the energy carrying capacity by at
least seventy-five percent;
C. "advanced grid technology" means hardware or
software technology that increases the efficiency, capacity
or reliability of existing or new electric transmission and
distribution systems, facilities and equipment and includes
advanced conductors, thermal ratings, grid enhancing
technology and technology determined by the commission or the
federal energy regulation commission to increase the
efficiency, capacity or reliability of an existing or new
transmission facility;
D. "advanced power flow controllers" means HGEIC/HB 93/a
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hardware or software technology used to push or pull electric
power in a manner that balances overloaded lines and
underused corridors within a distribution or transmission
system;
E. "commission" means the public regulation
commission;
F. "cost-effective" means that the energy
efficiency or load management program meets the utility cost
test;
G. "customer" means a utility customer at a
single, contiguous field, location or facility, regardless of
the number of meters at that field, location or facility;
H. "distribution cooperative utility" means a
utility with distribution facilities organized as a rural
electric cooperative pursuant to Laws 1937, Chapter 100 or
the Rural Electric Cooperative Act or similarly organized in
other states;
I. "dynamic line ratings" means hardware or
software technology used to appropriately update the
calculated thermal limits of existing distribution or
transmission lines based on real-time and forecasted weather
conditions;
J. "energy efficiency" means measures, including
energy conservation measures, or programs that target
consumer behavior, equipment or devices to result in a HGEIC/HB 93/a
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decrease in consumption of electricity and natural gas
without reducing the amount or quality of energy services;
K. "grid enhancing technology" means hardware or
software technology that reduces congestion or enhances the
flexibility of electric transmission and distribution systems
by increasing the capacity of a line or rerouting electricity
from overloaded to uncongested lines while maintaining
industry safety standards and includes dynamic line ratings,
advanced power flow controllers and topology optimization;
L. "large customer" means a customer with
electricity consumption greater than seven thousand megawatt-
hours per year or natural gas use greater than three hundred
sixty thousand decatherms per year;
M. "load management" means measures or programs
that target equipment or devices to result in decreased peak
electricity demand or shift demand from peak to off-peak
periods;
N. "program costs" means the prudent and
reasonable costs of developing and implementing energy
efficiency and load management programs, but "program costs"
does not include charges for incentives or the removal of
regulatory disincentives;
O. "public utility" means a public utility that is
not also a distribution cooperative utility;
P. "topology optimization" means hardware or HGEIC/HB 93/a
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software technology that identifies reconfigurations of the
distribution or transmission grid and can enable the routing
of power flows around congested or overloaded distribution or
transmission elements; and
Q. "utility cost test" means a standard that is
met if the monetary costs that are borne by the public
utility and that are incurred to develop, acquire and operate
energy efficiency or load management resources on a life-
cycle basis are less than the avoided monetary costs
associated with developing, acquiring and operating the
associated supply-side resources."
SECTION 4. Section 62-17-10 NMSA 1978 (being Laws 2005,
Chapter 341, Section 10) is amended to read:
"62-17-10. INTEGRATED RESOURCE PLANNING.--Pursuant to
the commission's rulemaking authority, public utilities
supplying electric or natural gas service to customers shall
periodically file an integrated resource plan with the
commission. Utility integrated resource plans shall evaluate
renewable energy, energy efficiency, load management,
distributed generation and conventional supply-side resources
on a consistent and comparable basis and take into
consideration deployment of advanced grid technologies, risk
and uncertainty of fuel supply, price volatility and costs of
anticipated environmental regulations in order to identify
the most cost-effective portfolio of resources to supply the HGEIC/HB 93/a
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energy needs of customers. The preparation of resource plans
shall incorporate a public advisory process. Nothing in this
section shall prohibit public utilities from implementing
cost-effective energy efficiency and load management programs
and the commission from approving public utility expenditures
on energy efficiency programs and load management programs
prior to the commission establishing rules and guidelines for
integrated resource planning. The commission may exempt
public utilities with fewer than five thousand customers and
distribution-only public utilities from the requirements of
this section. The commission shall take into account a
public utility's resource planning requirements in other
states and shall authorize utilities that operate in multiple
states to implement plans that coordinate the applicable
state resource planning requirements. The requirements of
this section shall take effect one year following the
commission's adoption of rules implementing the provisions of
this section."
SECTION 5. Section 62-17-11 NMSA 1978 (being Laws 2005,
Chapter 341, Section 11, as amended) is amended to read:
"62-17-11. DISTRIBUTION COOPERATIVE UTILITIES.--
A. Distribution cooperative utilities shall
periodically examine the potential to assist their customers
in reducing energy consumption or peak electricity demand in
a cost-effective manner. Based on these studies, by January HGEIC/HB 93/a
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1, 2009, distribution cooperative utilities shall establish
energy efficiency and load management targets and begin to
implement cost-effective energy efficiency and load
management programs that are economically feasible and
practical for their members and customers. Approval for such
programs shall reside with the governing body of each
distribution cooperative utility and not with the commission.
B. Each distribution cooperative utility shall
file with the commission, concurrently with its annual
report, a report that describes all of the distribution
cooperative utility's programs or measures that promote
energy efficiency, conservation or load management, including
the deployment of advanced grid technologies. The report
shall set forth the costs of each of the programs or measures
for the previous calendar year and the resulting effect on
the consumption of electricity. In offering or implementing
energy efficiency, conservation or load management programs,
a distribution cooperative utility shall attempt to minimize
any cross-subsidies between customer classes.
C. Each distribution cooperative utility shall
include in the report required by Subsection B of this
section a description of all programs or measures to promote
energy efficiency, conservation or load management, including
the deployment of advanced grid technologies, that are
planned and the anticipated date for implementation. HGEIC/HB 93/a
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D. Costs resulting from programs or measures to
promote energy efficiency, conservation or load management,
including the deployment of advanced grid technologies, may
be recovered by the distribution cooperative utility through
its general rates. In requesting approval to recover such
costs in general rates, the distribution cooperative utility
may elect to use the procedure set forth in Subsection H of
Section 62-8-7 NMSA 1978."
SECTION 6. A new section of Chapter 62 NMSA 1978 is
enacted to read:
"SELF-SOURCED POWER GENERATION.--
A. Persons located within the state may receive
electricity service using a qualified microgrid that may also
deliver electricity to equipment, lines and facilities
operated by an electric public utility; provided that the
person and the electric public utility enter into an electric
service agreement.
B. This section authorizes an electric public
utility, subject to approval by the public regulation
commission, to acquire self-source generation resources or
energy and dedicate those resources or energy to retail
services, wholesale services or self-generation services, or
any combination of those services, and rates established for
those services shall take into account the public interest
and need, reliability and affordability. The public HGEIC/HB 93/a
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regulation commission shall not approve an acquisition
pursuant to this section from a facility that does not
qualify as a self-source generation resource.
C. Energy generated and sold from a self-source
generation resource that is owned in whole or in part by a
qualified microgrid shall not be considered retail sales or
energy as contemplated under Sections 62-15-34, 62-16-4 and
62-18-10 NMSA 1978 until 2035, whether serving the qualified
microgrid or purchased in whole or in part by the electric
public utility to provide service. By 2045, all of the
energy that a qualified microgrid generates and sells shall
be from net-zero carbon resources. An operator of a
qualified microgrid shall file reports as required by the
public regulation commission, certifying the qualified
microgrid's progress toward and compliance with the net-zero
carbon resource standard.
D. A person who only provides self-source
generation sales from a self-source generation resource to
that person's employees or tenants, when the service or
commodity is not resold to or used by others, shall not be
considered an electric public utility.
E. As used in this section:
(1) "electric public utility" means an
electric public utility certified by the public regulation
commission to provide retail electric service in New Mexico HGEIC/HB 93/a
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pursuant to the Public Utility Act that is not also a
distribution cooperative utility;
(2) "net-zero carbon resource" means an
electricity generation resource that emits no carbon dioxide
into the atmosphere, or that reduces methane emitted into the
atmosphere in an amount equal to no less than one-tenth of
the tons of carbon dioxide emitted into the atmosphere, as a
result of electricity production;
(3) "qualified microgrid" means a permanent
or temporary electrical system that:
(a) incorporates a microgrid
controller;
(b) includes a self-source generation
resource that is capable of generating not less than twenty
megawatts; and
(c) is capable of operating
independently and disconnected from the grid;
(4) "self-source generation resource" means
a permanent or temporary electricity generating resource that
is dedicated to primarily serving the persons connected
either directly or indirectly through business affiliates to
the construction and installation of a qualified microgrid;
and
(5) "self-source generation sales" means
sales of electricity to persons or utilities generated from a HGEIC/HB 93/a
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self-source generation resource."
SECTION 7. EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2025.