2023 New Mexico Statutes › Chapter 62 - Electric, Gas and Water Utilities › Article 18 - Energy Transition › Section 62-18-4 - Financing order; application contents; pending applications.

A. A qualifying utility that is abandoning a qualifying generating facility may apply to the commission for a financing order pursuant to this section to recover all of its energy transition costs through the issuance of energy transition bonds. To obtain a financing order, a qualifying utility shall obtain approval to abandon a qualifying generating facility pursuant to Section 62-9-5 NMSA 1978. The application for the financing order may be filed as part of the application for approval to abandon a qualifying generating facility.
B. An application for a financing order shall include:
(1) a description of the facility that the qualifying utility proposes to abandon or for which abandonment authority was granted after December 31, 2018;
(2) an estimate of the energy transition costs and shall:
(a) identify the severance pay and job training expenses for affected employees losing their jobs as a result of an abandoned qualifying generating facility and any associated mine that only services the abandoned qualifying generating facility;
(b) identify costs not previously collected from the qualifying utility's customers for plant decommissioning and mine reclamation costs, subject to any limitations ordered by the commission prior to January 1, 2019 and affirmed by the New Mexico supreme court prior to the effective date of the Energy Transition Act, associated with the abandoned qualifying generating facility; and
(c) include an estimate of the financing costs associated with each series of energy transition bonds proposed to be issued;
(3) an estimate of the amount of energy transition charges necessary to recover the costs in Paragraph (2) of this subsection and the proposed calculation thereof, based on the estimated date of issuance and estimated principal amount of each series of energy transition bonds proposed to be issued;
(4) a description of the proposed adjustment mechanism that complies with the provisions of Section 6 [62-18-6 NMSA 1978] of the Energy Transition Act;
(5) a memorandum with supporting exhibits from a securities firm, such firm to be attested to by the state board of finance as being experienced in the marketing of bonds and capable of providing such a memorandum, that the proposed issuance satisfies the current published AAA rating or equivalent rating criteria of at least one nationally recognized statistical rating organization for issuances similar to the proposed energy transition bonds. The request for such attestation may be made by a qualifying utility prior to an application for a financing order, and the state board of finance shall act upon such a request promptly;
(6) a commitment by the qualifying utility to file with the commission following the issuance of the energy transition bonds:
(a) a description of the final structure and pricing of the bonds;
(b) updated financing costs and payment amount required pursuant to Section 16 [62-18-16 NMSA 1978] of the Energy Transition Act; and
(c) an updated calculation of the energy transition charges;
(7) an estimate of timing of the issuance and term of the energy transition bonds, or series of bonds; provided that the scheduled final maturity for each bond issuance shall be no longer than twenty-five years;
(8) identification of plans to sell, assign, transfer or convey, other than as a security, interest in energy transition property, including identification of an assignee, and demonstration that the assignee will be a financing entity wholly owned, directly or indirectly, by the qualifying utility that will be initially capitalized by the qualifying utility in such a way that equity interests in the financing entity are at least one-half percent of the total capital of the assignee;
(9) identification of ancillary agreements that may be necessary or appropriate;
(10) a description of a proposed ratemaking process to reconcile and recover or refund any difference between the energy transition costs financed by the energy transition bonds and the actual final energy transition costs incurred by the qualifying utility or the assignee;
(11) a proposed ratemaking method to account for the reduction in the qualifying utility's cost of service associated with the amount of undepreciated investments being recovered by the energy transition charge at the time that charge becomes effective; and
(12) a statement from the qualifying utility committing that the qualifying utility will use commercially reasonable efforts to obtain the lowest cost objective.
C. The application may include requests for approvals for new resources necessitated by the abandonment of a qualifying generating facility.
D. The qualifying utility or the commission may defer applications for needed approvals for new resources to a separate proceeding; provided that the application identifies adequate potential new resources sufficient to provide reasonable and proper service to retail customers.
E. If an application for approval to abandon a qualifying generating facility is pending before the commission on the effective date of the Energy Transition Act, the qualifying utility may file a separate application for a financing order, and the commission may join or consolidate the application for a financing order with the pending proceeding involving abandonment of the qualifying generating facility, with the consent of the applicant. On such joinder or consolidation, the time periods prescribed by the Energy Transition Act shall become applicable to the joined or consolidated case as of the date of the joinder or consolidation.
F. If a qualifying utility does not recover energy transition costs pursuant to the Energy Transition Act, the energy transition costs may be recovered pursuant to other applicable provisions of the Public Utility Act [Chapter 62, Articles 1 to 6 and 8 to 13 NMSA 1978].
History:
Laws 2019, ch. 65, § 4.
ANNOTATIONS
Effective dates.
— Laws 2019, ch. 65 contained no effective date provision, but, pursuant to N.M. Const., art. IV, § 23, was effective June 14, 2019, 90 days after the adjournment of the legislature.
The Energy Transition Act does not violate procedural due process.
— Where the public regulation commission (Commission) gave leave for the public service company of New Mexico to issue energy transition bonds of up to $361,000,000 in connection with the abandonment of its interests in the San Juan generating station units one and four and to collect separate and non-bypassable energy transition charges from its customers in repayment of the bonds, pursuant to the Energy Transition Act (ETA), §§ 62-18-1 through 62-18-23 NMSA 1978, and where appellants, two organizations that represent energy consumers, claimed that the ETA deprives energy consumers of procedural due process by allowing a qualified public utility to recover its energy transition costs without Commission oversight, appellants procedural due process was without merit, because the ETA as written contemplates that energy consumers will be given sufficient notice of the utility's application and a meaningful opportunity to be heard upon lodging a protest establishing good cause for a formal hearing in front of the Commission.
Citizens for Fair Rates & the Env't v. NMPRC
, 2022-NMSC-010.
The Energy Transition Act does not violate substantive due process.
— Where the public regulation commission (Commission) gave leave for the public service company of New Mexico to issue energy transition bonds of up to $361,000,000 in connection with the abandonment of its interests in the San Juan generating station units one and four and to collect separate and non-bypassable energy transition charges from its customers in repayment of the bonds, pursuant to the Energy Transition Act (ETA), §§ 62-18-1 through 62-18-23 NMSA 1978, and where appellants, two organizations that represent energy consumers, claimed that the ETA does not permit the Commission to review a utility's estimated energy transition costs before issuing a financing order, and that this limitation on the Commission's authority violates substantive due process protections, appellants substantive due process challenge failed, because under the modified rational basis standard, appellants have not brought forth sufficient record evidence, legislative facts, judicially noticeable materials, case law, or legal argument to establish that the ETA lacks a rational relationship to the interests expressed in § 62-3-1(B) NMSA 1978.
Citizens for Fair Rates & the Env't v. NMPRC
, 2022-NMSC-010.
Appellants failed to demonstrate that the public regulation commission did not comply with statutory requirement.
— Where the public regulation commission (Commission) gave leave for the public service company of New Mexico (PNM) to issue energy transition bonds of up to $361,000,000 in connection with the abandonment of its interests in the San Juan generating station units one and four and to collect separate and non-bypassable energy transition charges from its customers in repayment of the bonds, pursuant to the Energy Transition Act (ETA), §§ 62-18-1 through 62-18-23 NMSA 1978, and where appellants, two organizations that represent energy consumers, challenged the Commission's finding that PNM provided a memorandum from a securities firm that the proposed issuance satisfies the current published AAA rating as required by Subsection 62-18-4(B)(5), the Commission's finding was not in error because the Commission reasonably found that the senior advisor possessed actual or apparent authority to speak on behalf of the securities firm, based on the senior advisor's testimony that he was authorized to represent the securities firm in the proceedings and that he was acting within the scope of his authority.
Citizens for Fair Rates & the Env't v. NMPRC
, 2022-NMSC-010.