A. A public utility that procures or generates renewable energy shall recover, through the rate-making process, the reasonable costs of complying with the renewable portfolio standard. Costs that are consistent with commission approval of procurement plans or transitional procurement plans shall be deemed to be reasonable.
B. The commission shall not exclude from such cost recovery reasonable interconnection and transmission costs and costs to comply with electric industry reliability standards incurred by the public utility in order to deliver renewable energy to retail New Mexico customers.
C. If a public utility has been granted a certificate of public convenience and necessity prior to January 1, 2015 to construct or operate an electric generation facility and the investment in that facility has been allowed recovery as part of the utility's rate-base, the commission may require the facility to discontinue serving customers within New Mexico if the replacement has less or zero carbon dioxide emissions into the atmosphere; provided that no order of the commission shall disallow recovery of any undepreciated investments or decommissioning costs associated with the facility.
History: Laws 2004, ch. 65, § 6; 2007, ch. 4, § 10; 2019, ch. 65, § 31.
ANNOTATIONSThe 2019 amendment, effective June 14, 2019, prohibited the public regulation commission from excluding reasonable costs of recovery and costs to comply with electric industry reliability standards that are incurred to deliver renewable energy, and authorized the public regulation commission to require certain electric generation facilities to discontinue serving customers in the state if a replacement has less or zero carbon dioxide emissions into the atmosphere; in the section heading, added "and emissions reduction"; in Subsection B, after "transmission costs", added "and costs to comply with electric industry reliability standards"; and completely rewrote Subsection C.
The 2007 amendment, effective July 1, 2007, added Subsection C.
Rate making process. — The rate-making process includes both general rate cases and automatic adjustment clause recovery, depending upon the type of cost involved. N.M. Indus. Energy Consumers v. N.M. PRC, 2007-NMSC-053, 142 N.M. 533, 168 P.3d 105.
Cost of investor-supplied prepaid pension asset may be included in utility's rate base. — A utility can include prepayments for pension expenses in its rate base because the utility is out-of-pocket for such costs until they are recovered from ratepayers and is therefore entitled to recover its costs of financing such prepaid expenses; only investor-supplied working capital may be included in the rate base. N.M. Att'y. Gen. v. N.M. Pub. Regulation Comm'n, 2015-NMSC-032.
Where utility's investors made contributions to its pension fund which generated earnings that effectively reduced the utility's pension expense, and the investors, not the ratepayers, absorbed the cost of funding the pension program, the prepaid pension asset was properly included in the rate base because the asset amounted to working capital that benefitted the ratepayers by reducing the total pension costs needed in the utility's revenue requirement. N.M. Att'y. Gen. v. N.M. Pub. Regulation Comm'n, 2015-NMSC-032.