2023 New Mexico Statutes › Chapter 62 - Electric, Gas and Water Utilities › Article 18 - Energy Transition › Section 62-18-5 - Financing order; issuance; terms of bonds; reports to commission of disbursement of bond proceeds; review and audit of records.

A. The commission may approve an application for a financing order without a formal hearing if no protest establishing good cause for a formal hearing is filed within thirty days of the date when notice is given of the filing of the application for the financing order. If a hearing is held, the commission shall issue an order granting or denying the application for the financing order to a qualifying utility that is abandoning a qualifying generating facility and an order on an accompanying application of the qualifying utility for approval to abandon the qualifying generating facility within six months from the date the application for the financing order is filed with the commission. For good cause shown, the commission may extend the time for issuing the order for an additional three months.
B. Failure to issue an order approving the application or advising of the application's noncompliance pursuant to Subsection E of this section within the time prescribed by Subsection A of this section shall be deemed approval of the application for a financing order and approval to abandon the qualifying generating facility, if abandonment approval was requested as part of the application for the financing order pursuant to this subsection. The commission shall issue an order acknowledging the deemed approvals within seven days of the expiration of the time period described in Subsection A of this section.
C. If an application for a financing order is accompanied by a request for approval of new resources, this section provides an alternative time frame to that provided in Subsection C of Section 62-9-1 NMSA 1978, and the time frame specified in this section shall govern, unless the request has been deferred to a separate proceeding pursuant to Subsection D of Section 4 [62-18-4 NMSA 1978] of the Energy Transition Act.
D. The issuance of a financing order shall be the only approval required for the authority granted in the financing order.
E. The commission shall issue a financing order approving the application if the commission finds that the qualifying utility's application for the financing order complies with the requirements of Section 4 of the Energy Transition Act. If the commission finds that a qualifying utility's application does not comply with Section 4 of the Energy Transition Act, the commission shall advise the qualifying utility of any changes necessary to comply with that section and provide the applicant an opportunity to amend the application to make such changes. Upon those changes being made, the commission shall issue a financing order approving the application.
F. A financing order shall include the following provisions:
(1) approval for the qualifying utility or assignee to issue energy transition bonds as requested in the application, to use energy transition bonds to finance the maximum amount of the energy transition costs as requested in the application, as may be adjusted pursuant to Paragraph (6) of Subsection B of Section 4 of the Energy Transition Act, and to use the proceeds provided in Subsection A of Section 10 [62-18-10 NMSA 1978] of the Energy Transition Act;
(2) approval for the qualifying utility to recover the energy transition costs, as may be adjusted pursuant to Paragraph (6) of Subsection B of Section 4 of the Energy Transition Act, requested in the application through energy transition charges;
(3) approval of the energy transition charges necessary to recover the authorized energy transition costs, to be imposed through a non-bypassable energy transition charge as a separate line item on the qualifying utility's customer bills, assessed consistent with energy and demand cost allocations within each customer class, subject to update pursuant to the notice filing contemplated by Paragraph (6) of Subsection B of Section 4 of the Energy Transition Act and subject to the application of the adjustment mechanism as provided in Section 6 [62-18-6 NMSA 1978] of the Energy Transition Act, until the energy transition bonds issued pursuant to the financing order and the financing costs related to those bonds are paid in full;
(4) approval of the adjustment mechanism in compliance with Section 6 of the Energy Transition Act;
(5) a description of the energy transition property that is created by the financing order that may be used to pay, and secure the payment of, the energy transition bonds and financing costs authorized to be issued in the financing order;
(6) approval to enter into necessary or appropriate ancillary agreements;
(7) approval of any plans for selling, assigning, transferring or conveying, other than as a security, an interest in energy transition property; and
(8) approval of the proposed ratemaking process and method included in the application pursuant to Paragraphs (10) and (11) of Subsection B of Section 4 of the Energy Transition Act.
G. A financing order shall provide that the creation of energy transition property shall be simultaneous with the sale of the energy transition property to an assignee as provided in the application and the pledge of the energy transition property to secure energy transition bonds.
H. A financing order shall authorize the qualifying utility to issue one or more series of energy transition bonds for a scheduled final maturity of no more than twenty-five years for each series; provided that a rated final maturity may exceed twenty-five years. With such authorization, the qualifying utility shall not subsequently be required to secure a separate financing order prior to each issuance.
I. The commission may require, as a condition of the financing order and in every circumstance subject to the limitations set forth in Subsection A of Section 7 [62-18-7 NMSA 1978] of the Energy Transition Act, that, during any period in which energy transition bonds issued pursuant to the financing order are outstanding, an assignee that is a non-utility affiliate and issues energy transition bonds shall provide in the affiliate's articles of incorporation, partnership agreement or operating agreement, as applicable, that in order for a person to file a voluntary bankruptcy petition on behalf of that assignee, the prior unanimous consent of the directors, partners, managers or members, as applicable, shall be required. Any such provision shall constitute a legal, valid and binding agreement of such shareholders, partners or members of the assignee and is enforceable against such shareholders, partners or members.
J. A financing order may require the qualifying utility to file with the commission a periodic report showing the receipt and disbursement of proceeds of energy transition bonds and any other documents necessary for the qualifying utility to implement the financing order. Upon issuance of the energy transition bonds, the qualifying utility shall file an advice notice with the commission, subject to review by the commission for errors and corrections, that identifies the actual energy transition charges to be included on customers' bills, effective fifteen days from the date the advice notice is filed.
K. A financing order may authorize the commission to review and audit the books and records of the qualifying utility and of an assignee that is a non-utility affiliate and issues energy transition bonds, relating to energy transition property and the receipt and disbursement of proceeds of energy transition bonds.
L. After review and approval by the department of finance and administration with regard to reasonableness of contracts for services, a financing order may authorize the commission to impose a fee on the qualifying utility to pay commission expenses for contract bond counsel accredited by a nationally recognized association of bond lawyers to provide advice and assistance to commission staff in reviewing an application for a financing order and the structure and marketing of the proposed energy transition bonds.
M. The provisions of this section shall not be construed to limit the authority of the commission to:
(1) investigate the practices of or to audit the books and records of a qualifying utility; or
(2) issue such further orders as may be necessary to effectuate the provisions of the Energy Transition Act.
History:
Laws 2019, ch. 65, § 5.
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.