HB 267: UTILITY ENERGY EFFICIENCY AND LOAD MANAGEMENT

An Act Relating To Utilities; Requiring Public Utilities To Acquire Available Cost-effective And Achievable Energy Efficiency And Load Management Resources; Limiting Public Utility Cost Recovery Options.

Add to My Bills

MOD HB 267
UTILITY ENERGY EFFICIENCY AND LOAD MANAGEMENT

Legislative URL:

HB 267 on nmlegis.gov

Emergency Clause:

No

Germane:

N/A

Location:

Signed

Action:

[7] HENRC/HBIC-HENRC [24] DP/a-HBIC [39] DNP-CS/DP - PASSED/H (65-2) [40] SJC [44] DP - PASSED/S (38-0) SGND (Apr.2) Ch.124.

Issue(s):

Energy

Related Legislators

Bill Sponsor:

James Strickler

Related Documents

Downloads:

Introduced
HENRC Committee Report
HBIC Committee Report
HBIC Committee Substitute
Final House Vote
SJC Committee Report
Final Senate Vote
Fiscal Impact Report
Final Version

Summary

The bill amends the Efficient Use of Energy Act to add an additional limit on the amount that a public utility company may recover from its customers, without consent, for the company’s energy efficiency and load management programs. Current law limits recovery to $75,000/year per customer. The bill adds that recovery shall be the lesser of $75,000 or 1% of customer’s bill. In addition, the bill removes “all” from the current directive to electric and gas utilities to acquire ALL cost-effective and achievable energy efficiency and load management resources available in their service territories.

One concern about this bill might be that because of the 1% cap and the removal of “all,” the bill would reduce the implementation of energy efficiency programs in New Mexico by its public utilities to such an extent that the Efficient Use of Energy Act might become essentially ineffective and useless. Another concern may be that it makes little sense to cut back on energy efficiency measures when they are the most cost-effective resource for reducing energy use and costs.

Update: On February 13, 2013, HENRC amended the bill to make the following changes:

1. Current law requires an electric utility to save at least 5% of its 2005 sales in kilowatt-hours in 2014 and 10% in 2020 from energy efficiency and load management programs. The amendment lowers those minimums to 2.5% and 5% respectively.

2. The amendment authorizes the PRC to lower those minimums further if it determines that not doing so would cause the utility to exceed the cost cap.

3.The amendment raises the cap set forth in the original bill from 1% to 3%. Current law does not provide a cap related to a percentage of the customer’s bill, only the $75,000 annual cost/customer cap.

One concern with the amendment might be that the minimum savings required could be too low to provide much benefit from energy efficiency and load management programs in New Mexico, despite the ability of these programs to save customers’ money and reduce the use of energy. Another might be that even through the amendment provides a higher cap than the original bill, the cap might still be so low that it could detrimentally affect the ability of the State to enjoy the full benefits that stronger energy efficiency and load management program might provide.

Update: The HBIC Committee Substitute adopted on March 6, 2013 amends the Efficient Use of Energy Act as follows:

1. It changes the definition of “cost-effective” so that energy efficiency or load management programs must meet the utility cost test rather than the total resource cost test.

2. Adds a definition of “program costs” that provides in part that charges for incentives or the removal of regulator disincentives are not included in program costs.

3. Replaces the “total resource cost test” in the definitions with “utility test”. The difference between the two is that the total resource cost test includes the costs to the utility and to the participants in the energy efficiency or load management program whereas the utility cost test includes only the costs of the public utility. The test is used to determine the cost-effectiveness of the programs and only cos-effective measures may be approved by the PRC.

4.  Utilities no longer would be required to obtain all cost-effective energy efficiency and load management resources available. And, the 2014 target for kilowatt-hours of electricity saved due to using such resources is reduced from 10% to 8% of its 2005 sales.

5. The program costs for electric utilities will be funded at 3% of customer bills, or $75,000 per customer per calendar year, whichever is less. Funding for gas utility programs shall not exceed 3% of total annual revenues nor exceed $75,000 per customer per calendar year. As long as the programs remains cost-effective, at least 5% of the amount received by the public utility for program costs shall be specifically directed to energy-efficiency programs for low income customers.

The details of this complicated bill may raise some potential concerns but also some potential benefits with respect to energy usage and savings that will only become known over time, if ever. The utility cost test may be a benefit because energy efficiency and load management programs might be evaluated at a lower cost. On the other hand, the decrease in the 2014 target may be of concern.

This bill is a companion bill to the Senate Bill 621.

Outcome: HB 267 passed the House (65-2) and Senate (38-0), and was signed into law on April 2nd.

Date of Summary:  1/28/13, Updated 2/16/13; Updated 3/7/13; Updated 5/17/13