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
Sens. Muñoz and Shendo/Reps. Dixon and
Sanchez
LAST UPDATED
ORIGINAL DATE 2/11/2025
SHORT TITLE Create Utility Oversight Fund
BILL
NUMBER Senate Bill 143
ANALYST Rodriguez/Graeser
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
Fees $0.0 $19,020.0 $19,260.0 $19,490.0 $19,700.0 Recurring
Utility
Oversight
Fund
Fees $0.0 ($16,340.0) ($16,550.0) ($16,740.0) ($16,919.0) Recurring General Fund
Parentheses ( ) indicate revenue decreases.
*Amounts reflect most recent analysis of this legislation.
Relates to Senate Bill(s) 9 and 109
Sources of Information
LFC Files
Agency Analysis Received From
Public Regulation Commission (PRC) Agency Analysis was Solicited but Not Received From
New Mexico Office of the Attorney General (NMAG)
State Treasurer’s Office (STO)
SUMMARY
Synopsis of Senate Bill 143
Senate Bill 143 (SB143) establishes the utility oversight fund, a nonreverting fund administered
by the Public Regulation Commission (PRC) subject to appropriation by the Legislature, for
PRC to carry out its duties pursuant to the Public Utility Act. The fund consists of inspection and
supervision fees on public utility companies, regulatory fees on telephone and transmission
companies, and pipeline operator fees. Companies must pay fees by April 30 each year. The bill
allows PRC to adjust fees annually based on the employment cost index until July 1, 2031. The
bill also provides the authority to PRC to sue to collect unpaid fees, interest, and penalties, as
opposed to the New Mexico Attorney General as is currently in statute.
SB143 increases inspection and supervision fees on public utilities from 0.506 percent to 0.59
percent of gross receipts and increases regulatory fees on telephone companies from 0.511 Senate Bill 143 – Page 2
percent to 0.59 percent. The bill also gives PRC the authority to increase administrative hearing
fees in amounts that do not exceed the cost of administrative proceedings.
SB143 also directs excavation penalties to be deposited to the “current school fund” instead of
the general fund.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025. See “Significant Issues” below for more
context.
FISCAL IMPLICATIONS
This bill creates a new nonreverting fund that would be administered by PRC and subject to
appropriation by the Legislature to PRC to carry out its duties pursuant to the Public Utility Act.
The bill does not include a recurring appropriation, but diverts or “earmarks” revenue,
representing a recurring loss from the general fund. LFC has concerns with including continuing
distribution language in the statutory provisions for funds because earmarking reduces the ability
of the Legislature to establish spending priorities.
Proposed Increase in Fees. SB143 increases inspection and supervision fees on public
utilities from 0.506 percent to 0.59 percent of gross receipts and increases regulatory fees on
telephone and transmission companies from 0.511 percent to 0.59 percent. PRC provides the
following fee comparison between the fees collected in FY24 at the current rates and the
projected fees with the rates proposed in SB143.
Collected Fees in FY24
Projected Fees at
Proposed 0.59 percent
Electric IOUs $9,542,302 $11,126,400
Gas IOUs $2,733,748 $3,187,572
Electric Coops $2,08 4,752 $2,430,837
Telecom $1,264,596 $1,460,101
Water Utilities $134,648 $157,001
Total $15,770,870 $18,361,911
The proposed increase on inspection and supervision fees on utilities and telecommunication
companies would increase total amount collected by 16.4 percent.
Fee Adjustments. SB143 allows PRC to annually adjust inspection and supervision fees by no
more than the prior year’s increase in the employment cost index for state and local government
as published by the federal Bureau of Labor Statistics (BLS) until July 1, 2031. This employment
cost index is not forecasted by S&P and, therefore, LFC uses the state and local compensation
index from S&P to forecast possible increases.
BLS and S&P State and Local Compensation Index
BLS State and Local Government Compensation S&P State and Local Compensation
Index
Index Yea r-over-Year Change Senate Bill 143 – Page 3
FY20 2.88% 3.6% 4.1%
FY21 2.15% -25.2% 5.2%
FY22 2.88% 33.7% 1.7%
FY23 4.80% 67.0% 0.1%
FY24 4.78% -0.5% 2.1%
FY25 4.70% -1.6% 4.2%
FY26
4.3%
FY27
4.2%
FY28
4.0%
Below is a breakdown of possible increases to inspection and supervision fees at the proposed
0.59 percent and with possible growth as adjusted by PRC based on the forecasted S&P State
and Local Compensation index. Based on the proposed changes in SB143, fees could increase as
much as 31 percent.
Projected Fees with Proposed 0.59 percent rate and Indexed at S&P State and Local
Compensation (in thousands)
Current and Projected Fees
Collected
Projected Fees at
Proposed 0.59 percent
Indexed Projected
Fees
FY24 $15,771.0
FY25 $16,118.0
FY26 $16,339.0 $19,023.0
FY27 $16,545.0 $19, 263.0 $20,096.0
FY28 $16,738.0 $19, 488.0 $21,150.0
FY29 $16,919.0 $19, 699.0 $22,170.0
SIGNIFICANT ISSUES
PRC’s Recurring Budget. PRC’s recurring general fund revenue has increased by 49.1
percent over the past four years. This increase reflects an increase in the agency’s responsibilities
due to growing workload, regulatory changes, and the state’s energy efficiency goals. As noted
by PRC, the proposed changes in SB143 would “allow the PRC to be a self-sustaining agency,
relying on regulatory fees rather than state general fund appropriations”. However, as noted in
the “Fiscal Impact”, the LFC has concerns with including continuing distribution language in the
statutory provisions for funds because earmarking reduces the ability of the Legislature to
establish spending priorities.
Senate Bill 143 – Page 4
Penalties. SB143 also directs excavation penalties to be deposited to the “current school fund”
instead of the general fund. This language amends the statute to follow Section 22-8-32 NMSA
1978 which directs the state treasurer to deposit all fines and forfeitures under general laws into
the current school fund. In practical effect, the “common school fund” is the general fund as a
result of an agreement in the mid-1950’s for the general fund to make up the difference between
dedicated revenues including the emergency school tax imposed on oil and gas, fines and
forfeitures, and property taxes and needs.
Employment Cost Index for State and Local Government. SB143 allows PRC to
annually adjust inspection and supervision fees no greater than the prior year’s increase in the
employment cost index for state and local government until July 1, 2031. As demonstrated in the
chart included in the “Fiscal Impact” section above (Chart: BLS and S&P State and Local
Compensation Index), the BLS State and Local Government Compensation Index fluctuates
significantly—increasing as much as 67 percent in some years and decreasing by 25.2 percent in
other years. LFC recommends using a more stable index, such as the S&P State and Local
Compensation Index.
Effective Date. SB143 does not include an effective date, as such it would go into effect 90
days after the Legislature adjourns, or June 20, 2025. Under this effective date, the collected fees
would be transferred to the proposed fund beginning on June 20, 2025. However, by then, PRC
will have already been appropriated its general fund revenue for FY26. Therefore, this analysis
assumes an appropriation from the Legislature from the new utility oversight fund to PRC
wouldn’t occur until FY27.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
SB143 relates to Senate Bill 9, which changes the daily and maximum civil penalties for any
person who owns or operates gas or oil pipeline facilities and is found to have violated
regulations to mirror those under related federal pipeline regulations. SB143 also relates to
Senate Bill 109, which cleans language in the Public Regulation Commission Act.
JR/rl