SB 170
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AN ACT
RELATING TO ECONOMIC DEVELOPMENT; REVISING DEFINITIONS IN THE
NEW MEXICO FINANCE AUTHORITY ACT; AMENDING PERMITTED USES FOR
MONEY IN THE PUBLIC PROJECT REVOLVING FUND; REVISING ECONOMIC
DEVELOPMENT RATES FOR GAS AND ELECTRIC UTILITIES; PROVIDING
FOR EXPEDITED RATEMAKING ORDERS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 6-21-3 NMSA 1978 (being Laws 1992,
Chapter 61, Section 3, as amended) is amended to read:
"6-21-3. DEFINITIONS.--As used in the New Mexico
Finance Authority Act:
A. "authority" means the New Mexico finance
authority;
B. "bond" means any bonds, notes, certificates
of participation or other evidence of indebtedness;
C. "bondholder" or "holder" means a person who
is the owner of a bond, whether registered or not;
D. "emergency public project" means a public
project:
(1) made necessary by an unforeseen
occurrence or circumstance threatening the public health,
safety or welfare; and
(2) requiring the immediate expenditure
of money that is not within the available financial resources SB 170
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of the qualified entity as determined by the authority;
E. "public project" means the acquisition,
construction, improvement, alteration or reconstruction of
assets of a long-term capital nature by a qualified entity,
including land; buildings; water rights; water, sewerage and
waste disposal systems; streets; housing; airports; municipal
utilities; public recreational facilities; public
transportation systems; parking facilities; and machinery,
furniture and equipment. "Public project" includes all
proposed expenditures related to the entire undertaking.
"Public project" also includes the acquisition, construction
or improvement of real property, buildings, facilities and
other assets by the authority for the purpose of leasing the
property;
F. "qualified entity" means the state or an
agency or institution of the state or a county, municipality,
school district, two-year public post-secondary educational
institution, charter school, land grant corporation, acequia
association, public improvement district, federally chartered
college located in New Mexico, intercommunity water or
natural gas supply association or corporation, special water,
drainage, irrigation or conservancy district or other special
district created pursuant to law, rural electric cooperative
pursuant to the Rural Electric Cooperative Act, nonprofit
foundation or other support organization affiliated with a SB 170
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public university, college or other higher educational
institution located in New Mexico, including a university
research park corporation, a nonprofit housing developer,
an Indian nation, tribe or pueblo located wholly or partially
in New Mexico, including a political subdivision or a wholly
owned enterprise of an Indian nation, tribe or pueblo or a
consortium of those Indian entities or a consortium of any
two or more qualified entities created pursuant to law; and
G. "security" or "securities", unless the context
indicates otherwise, means bonds, notes or other evidence of
indebtedness issued by a qualified entity or leases or
certificates or other evidence of participation in the
lessor's interest in and rights under a lease with a
qualified entity and that are payable from taxes, revenues,
rates, charges, assessments or user fees or from the proceeds
of funding or refunding bonds, notes or other evidence of
indebtedness of a qualified entity or from certificates or
evidence of participation in a lease with a qualified
entity."
SECTION 2. Section 6-21-6 NMSA 1978 (being Laws 1992,
Chapter 61, Section 6, as amended) is amended to read:
"6-21-6. PUBLIC PROJECT REVOLVING FUND--PURPOSE–-
ADMINISTRATION.--
A. The "public project revolving fund" is created
within the authority. The fund shall be administered by the SB 170
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authority as a separate account, but may consist of such
subaccounts as the authority deems necessary to carry out
the purposes of the fund. The authority may establish
procedures and adopt rules as required to administer the fund
in accordance with the New Mexico Finance Authority Act.
B. Except as otherwise provided in the New Mexico
Finance Authority Act, money from payments of principal of
and interest on loans and payments of principal of and
interest on securities held by the authority for public
projects shall be deposited in the public project revolving
fund. The fund shall also consist of any other money
appropriated, distributed or otherwise allocated to the fund
for the purpose of financing public projects.
C. Money appropriated to pay administrative costs,
money available for administrative costs from other sources
and money from payments of interest on loans or securities
held by the authority, including payments of interest on
loans and securities held by the authority for public
projects, that represents payments for administrative costs
shall not be deposited in the public project revolving fund
and shall be deposited in a separate account of the authority
and may be used by the authority to meet administrative costs
of the authority.
D. Except as otherwise provided in the New Mexico
Finance Authority Act, money in the public project revolving SB 170
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fund is appropriated to the authority to pay the reasonably
necessary costs of originating and servicing loans, grants
or securities funded by the fund and to make loans or grants
and to purchase or sell securities to assist qualified
entities in financing public projects in accordance with
the New Mexico Finance Authority Act.
E. Money in the public project revolving fund
not needed for immediate disbursement, including money held
in reserve, may be deposited with the state treasurer for
short-term investment pursuant to Section 6-10-10.1 NMSA 1978
or may be invested in direct and general obligations of
or obligations fully and unconditionally guaranteed by
the United States, obligations issued by agencies of the
United States, obligations of this state or any political
subdivision of the state, interest-bearing time deposits,
commercial paper issued by corporations organized and
operating in the United States and rated "prime" quality
by a national rating service, other investments permitted
by Section 6-10-10 NMSA 1978 or as otherwise provided by the
trust indenture or bond resolution, if money is pledged for
or secures payment of bonds issued by the authority.
F. The authority shall establish fiscal controls
and accounting procedures that are sufficient to assure
proper accounting for public project revolving fund payments,
disbursements and balances. SB 170
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G. Money on deposit in the public project
revolving fund may be used to make interim loans for a term
not exceeding two years to qualified entities for the purpose
of providing interim financing for any project approved or
funded by the legislature.
H. Money on deposit in the public project
revolving fund may be used to acquire securities or to make
loans to qualified entities in connection with the small loan
program. As used in this subsection, "small loan program"
means the program of the authority designed to provide
financing for public projects in amounts not to exceed one
million dollars ($1,000,000) per project. A public project
financed pursuant to the small loan program shall not require
specific authorization by law.
I. Money on deposit in the public project
revolving fund may be designated as a reserve for any
bonds issued by the authority, including bonds payable from
sources other than the public project revolving fund, and the
authority may covenant in any bond resolution or trust
indenture to maintain and replenish the reserve from money
deposited in the public project revolving fund after
issuance of bonds by the authority.
J. Money on deposit in the public project
revolving fund may be used to purchase bonds issued by
the authority, which are payable from any designated source SB 170
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of revenues or collateral. Purchasing and holding the bonds
in the public project revolving fund shall not, as a matter
of law, result in cancellation or merger of the bonds
notwithstanding the fact that the authority as the issuer of
the bonds is obligated to make the required debt service
payments and the public project revolving fund held by the
authority is entitled to receive the required debt service
payments.
K. Money on deposit in the public project
revolving fund may be used to capitalize other financing
programs of the authority authorized by law, either directly
or from proceeds of bonds issued by the authority and secured
by money in the public project revolving fund.
L. After June 30, 2028, only public projects
referenced in Subsection D of this section that are
specifically authorized by law shall be eligible for funding
from the public project revolving fund."
SECTION 3. Section 62-6-26 NMSA 1978 (being Laws 1989,
Chapter 5, Section 1, as amended) is amended to read:
"62-6-26. ECONOMIC DEVELOPMENT RATES FOR GAS AND
ELECTRIC UTILITIES--AUTHORIZATION.--
A. The commission may approve or otherwise
allow to become effective, as provided in Subsection B of
this section, applications from utilities or persons subject
to regulation pursuant to Subsection B of Section 62-6-4 SB 170
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NMSA 1978 or filings by cooperative utilities pursuant to
Section 62-8-7 NMSA 1978, as appropriate, for special rates
or tariffs in order to prevent the loss of customers, to
encourage customers to expand present facilities and
operations in New Mexico and to attract new customers where
necessary or appropriate to promote economic development in
New Mexico. Any such special rates or tariffs shall be
designed so as to recover at least the incremental cost of
providing service to such customers.
B. The commission may approve or otherwise
allow to become effective applications from utilities or
persons subject to regulation pursuant to Subsection B of
Section 62-6-4 NMSA 1978 and filings by cooperative
utilities pursuant to Section 62-8-7 NMSA 1978 for economic
development rates and rates designed to retain load for gas
and electric utility customers. For purposes of this section
and Section 62-8-6 NMSA 1978, economic development rates and
rates designed to retain load are rates set at a level lower
than the corresponding service rate for which a customer
would otherwise qualify.
C. Except as provided in Subsection D of this
section, economic development rates shall be approved or
otherwise allowed to become effective for an electric utility
or persons subject to regulation pursuant to Subsection B of
Section 62-6-4 NMSA 1978 or filings by cooperative utilities SB 170
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pursuant to Section 62-8-7 NMSA 1978 only when the utility or
the substantially full requirements supplier of the utility
has excess capacity. For purposes of this section,
"excess capacity" means the amount of electric generating
and purchased power capacity available to the utility or
such supplier that is greater than the utility's or such
supplier's peak load plus a fixed percentage reserve
margin set by the commission.
D. Economic development rates may be approved or
otherwise allowed to become effective for electric utilities
or persons subject to regulation pursuant to Subsection B of
Section 62-6-4 NMSA 1978 or filings by cooperative utilities
pursuant to Section 62-8-7 NMSA 1978 that do not meet the
qualifications of Subsection C of this section; provided
that the following conditions are met:
(1) economic development rates approved
under this subsection shall not be lower than the incremental
cost of providing service to the economic development rate
customer as determined by the commission. As used in this
subsection, "economic development rate customer" means a
customer that directly benefits from the economic development
rate established pursuant to this subsection; and
(2) an economic development rate approved
for any customer under this subsection shall last no longer
than four years, except that the commission may approve the SB 170
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rate for up to twelve additional months if it finds that the
additional period is necessary to attract a particular
economic development rate customer to New Mexico.
E. Prior to July 1, 2035, the commission shall
allow public utilities to recover prudent and reasonable
costs incurred by a public utility for the ongoing
development, construction or maintenance of resources for
economic development projects that provide incremental
capacity, or serve incremental load growth, within the
economic development project's service area. For economic
development projects implemented after the effective date of
this 2025 act, the reasonable costs of economic development
projects shall be recoverable in rates through a rate rider,
base rates or a combination thereof, when the associated
equipment and facilities begin serving the new load
associated with the economic development project or the
utility demonstrates that the economic development project
provides benefits to existing customers. A public utility
shall be allowed to defer costs incurred for economic
development projects that are not included in rates to a
regulatory asset. Notwithstanding the time lines in
Subsection C of Section 62-9-1 NMSA 1978, the commission
shall review a public utility's application for an economic
development project and issue a final order approving,
modifying or denying the application within six months of the SB 170
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application filing date; provided, however, that the
commission may extend the time for granting approval for an
additional three months for good cause shown. All projects
shall be certified by the economic development
department using industry standard guidelines for site
selection and approved by the commission. All certified and
approved projects shall be allowed to complete construction.
F. The economic development department shall
certify, using industry standard guidelines for site
selection, whether the economic development project will
support reasonably anticipated economic development within
the state. Prior to the certification, the department shall
provide an opportunity for public comment regarding whether
the proposed economic development project will support
reasonably anticipated economic development within the state.
The department shall issue a certification letter within
sixty days of a request from a public utility or project
developer, and the certification letter shall be included in
a public utility's application filed pursuant to Subsection E
of this section.
G. For purposes of this section:
(1) "economic development project" means
the construction or modification of new or existing electric
generation facilities, energy storage facilities,
transmission and distribution facilities, zero-carbon SB 170
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resources as defined in Subsection K of Section 62-16-3
NMSA 1978, alternative fuel facilities, energy efficiency
programs, renewable energy and fuel cell facilities, recycled
energy or other technologies necessary to serve reasonably
anticipated new load and that have been certified by the
economic development department pursuant to Subsection F
of this section;
(2) "incremental capacity" means the
increase in capacity attributable to new or expanded
facilities up to ten percent of a public utility’s total
system peak load per calendar year;
(3) "incremental cost" at a minimum shall
include all additional costs incurred to serve the economic
development rate customer that would not otherwise have been
incurred to serve other customers, fuel and purchased power
costs, costs recoverable from customers pursuant to the
Renewable Energy Act and the Efficient Use of Energy Act and
the direct costs of facilities necessary to provide service
to the customer. The commission shall not impute to the
electric utility revenues that would have been received from
the economic development rate or load retention customer if
they had been provided service under the corresponding rate
for which they would have otherwise qualified;
(4) "incremental load growth" means the
increase in forecasted load attributable to commercial and SB 170
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industrial growth or electrification of utility customer
infrastructure; and
(5) "recycled energy" means energy
produced by a generation unit that converts the otherwise
lost energy from exhaust stacks or pipes to electricity
without combustion of additional fossil fuel."
SECTION 4. Section 62-9-1 NMSA 1978 (being Laws 1941,
Chapter 84, Section 46, as amended) is amended to read:
"62-9-1. NEW CONSTRUCTION--RATEMAKING PRINCIPLES.--
A. No public utility shall begin the construction
or operation of any public utility plant or system or of any
extension of any plant or system without first obtaining from
the commission a certificate that public convenience and
necessity require or will require such construction or
operation. This section does not require a public utility to
secure a certificate for an extension within any municipality
or district within which it lawfully commenced operations
before June 13, 1941 or for an extension within or to
territory already served by it, necessary in the ordinary
course of its business, or for an extension into territory
contiguous to that already occupied by it and that is not
receiving similar service from another utility. If any
public utility or mutual domestic water consumer association
in constructing or extending its line, plant or system
unreasonably interferes or is about to unreasonably interfere SB 170
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with the service or system of any other public utility or
mutual domestic water consumer association rendering the same
type of service, the commission, on complaint of the public
utility or mutual domestic water consumer association
claiming to be injuriously affected, may, upon and pursuant
to the applicable procedure provided in Chapter 62,
Article 10 NMSA 1978, and after giving due regard to public
convenience and necessity, including reasonable service
agreements between the utilities, make an order and prescribe
just and reasonable terms and conditions in harmony with the
Public Utility Act to provide for the construction,
development and extension, without unnecessary duplication
and economic waste.
B. If a certificate of public convenience and
necessity is required pursuant to this section for the
construction or extension of a generating plant or
transmission lines and associated facilities, a public
utility may include in the application for the certificate
a request that the commission determine the ratemaking
principles and treatment that will be applicable for the
facilities that are the subject of the application for the
certificate. If such a request is made, the commission
shall, in the order granting the certificate, set forth the
ratemaking principles and treatment that will be applicable
to the public utility's stake in the certified facilities in SB 170
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all ratemaking proceedings on and after such time as the
facilities are placed in service. The commission shall use
the ratemaking principles and treatment specified in the
order in all proceedings in which the cost of the public
utility's stake in the certified facilities is considered.
If the commission later decertifies the facilities, the
commission shall apply the ratemaking principles and
treatment specified in the original certification order to
the costs associated with the facilities that were incurred
by the public utility prior to decertification.
C. The commission may approve the application for
the certificate without a formal hearing if no protest is
filed within sixty days of the date that notice is given,
pursuant to commission order, that the application has been
filed. The commission shall issue its order granting or
denying the application within nine months from the date the
application is filed with the commission. Failure to issue
its order within nine months is deemed to be approval and
final disposition of the application; provided, however, that
the commission may extend the time for granting approval for
an additional six months for good cause shown.
D. Notwithstanding the time lines contained in
Subsection C of this section, for applications certified by
the economic development department pursuant to Subsection F
of Section 62-6-26 NMSA 1978, the commission shall issue an SB 170
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order granting or denying the application within six months
from the date the application is filed with the commission.
Failure to issue the commission's order within six months
is deemed to be approval and final disposition of the
application; provided, however, that the commission may
extend the time for granting approval for an additional three
months for good cause shown.
E. In an application for a certificate of public
convenience and necessity for an energy storage system, the
commission shall approve energy storage systems that:
(1) reduce costs to ratepayers by avoiding
or deferring the need for investment in new generation and
for upgrades to systems for the transmission and distribution
of energy;
(2) reduce the use of fossil fuels for
meeting demand during peak load periods and for providing
ancillary services;
(3) assist with ensuring grid reliability,
including transmission and distribution system stability,
while integrating sources of renewable energy into the grid;
(4) support diversification of energy
resources and enhance grid security;
(5) reduce greenhouse gases and other air
pollutants resulting from power generation;
(6) provide the public utility with the SB 170
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discretion, subject to applicable laws and rules, to operate,
maintain and control energy storage systems so as to ensure
reliable and efficient service to customers; and
(7) are the most cost effective among
feasible alternatives.
F. As used in this section:
(1) "energy storage system" means methods
and technologies used to store electricity; and
(2) "mutual domestic water consumer
association" means an association created and organized
pursuant to the provisions of:
(a) Laws 1947, Chapter 206; Laws 1949,
Chapter 79; or Laws 1951, Chapter 52; or
(b) the Sanitary Projects Act."