SB 489 — ENERGY TRANSITION ACT

h r i s (1) payment of the fee authorized pursuant to h , t, Subsection L of Section 5 of the Energy Transition Act;

e u g e b l e e h (2) principal, interest, acquisition, n d d i = = o h defeasance and redemption premiums that are payable on energy l ] b ,d i a º e transition bonds;

r(3) iany =payment rrequired tunder ean wancillary dagreement (3)and any paymentamount required to fund or replenish a reserve account or other account established under anany indenture, ancillary magreement aor nother ofinancing ddocument mrelating :to the energy transition bonds;

b(4) eany dcosts, sfees ºand oexpenses trelated nto =issuing, ssupporting, krepaying, mservicing eand .214314.4refunding -energy 6transition -bonds, ethe aapplication nfor ea dfinancing rorder, eincluding lrelated ustate [board Aof dfinance agreementexpenses, andor anyobtaining amountan requiredorder toapproving fundabandonment orof replenish a reservequalifying accountSCORC/SB or489 otherPage account6 establishedgenerating underfacility; any indenture, ancillary agreement or other financing document relating to the energy transition bonds;

(4) any costs, fees and expenses related to issuing, supporting, repaying, servicing and refunding energy transition bonds, the application for a financing order, including related state board of finance expenses, or obtaining an order approving abandonment of a qualifying generating facility;

h (7) preliminary and continuing costs g o associated with subsequent financing;

and t hr g e i k (8) any other related costs approved for h r i s recovery in the financing order;

h , t, L.

"financing order" means an order of the e u g e b l commission that authorizes the issuance of energy transition e e h n d d i = = o h bonds, authorizes the imposition, collection and periodic l ] b ,d i a º e adjustments of the energy transition charge and creates energy r i = r t e w d transition property;

mM. a n o d m :

b"financing eparty" dmeans sa ºtrustee, ocollateral tagent nor =other sperson kacting mfor ethe .214314.4benefit -of 7a -bondholder, eand a nparty eto dan rancillary eagreement lor uthe [energy Atransition dbonds, the rights and obligations of which relate to or depend upon the existence of energy transition property, the enforcement and priority of a security interest SCORC/SB 489 M.Page 7 in energy transition property or the timely collection and payment of energy transition revenues;

"financing party" means a trustee, collateral agent or other person acting for the benefit of a bondholder, and a party to an ancillary agreement or the energy transition bonds, the rights and obligations of which relate to or depend upon the existence of energy transition property, the enforcement and priority of a security interest in energy transition property or the timely collection and payment of energy transition revenues;

"municipality" means any incorporated city, town or village, whether incorporated under general act, special act h or special charter, incorporated counties and H class counties;

u » r P.

"non-bypassable" means that the payment of an t h g e energy transition charge may not be avoided by an electric l i h r i s service customer located within a utility service area and h , e h shall be paid by the customer that receives electric delivery t u g e b l service from the qualifying utility imposing the charge for as e e , gh n d d i = = o h long as the energy transition bonds secured by the charge are l ] b ,d i a º r outstanding and the related financing costs have not been e r = t e w d recovered in full;

mQ. a n o d m :

b"non-utility raffiliate" emeans, twith ºrespect oto ta nqualifying =utility, sa kperson mthat eis .214314.4an -affiliated 8interest, -as ethat term is used in the Public Utility Act, but a n"non-utility eaffiliate" ddoes rnot einclude la upublic [utility Athat dprovides Q.retail utility service to customers in the SCORC/SB 489 Page 8 state;

"non-utility affiliate" means, with respect to a qualifying utility, a person that is an affiliated interest, as that term is used in the Public Utility Act, but a "non-utility affiliate" does not include a public utility that provides retail utility service to customers in the state;

"qualifying generating facility" means a coal-coal-fired fired generating facility in New Mexico that may be composed of multiple generating units that:

(3) if operated by a qualifying utility prior to the effective date of the Energy Transition Act, is to be h abandoned prior to January 1, 2023;

and g o (4) if not operated by a qualifying utility t hr g e i k prior to the effective date of the Energy Transition Act, is to h r i s be abandoned prior to January 1, 2032;

and h , t, T.

"qualifying utility" means a public utility that e u g e b l meets the requirements of Paragraph (1) of Subsection G of e e h n d d i = = o h Section 62-3-3 NMSA 1978 and owns or leases all or a portion of l ] b ,d i a º e a qualifying generating facility and its successor or r i = r t e w d assignees.

mSECTION a3. n o d m :

bLOCATION eOF dRESOURCE sDEVELOPMENT ºAFTER oSCORC/SB t489 nPage = s k m e .214314.4 - 9 -ABANDONMENT.-- eA. a n e d r e l u [ A d SCORC/SB 489 SECTION 3.

[NEW MATERIAL] LOCATION OF RESOURCE DEVELOPMENT AFTER ABANDONMENT.-- A.

h B.

In determining whether to approve replacement u » r resources, the commission shall prefer resources with the least t h g e environmental impacts, those with higher ratios of capital l i h r i s costs to fuel costs and those able to reduce the cost of h , e h reclamation and use for lands previously mined within the t u g e b l county of the qualifying generating facility.

e e , gh n d d i = = o h C.

In considering responses to requests for l ] b ,d i a º r proposals for replacement resources pursuant to this section, a e r = t e w d qualifying utility shall inform prospective bidders that it mpromotes aand nencourages othe duse mof :workers residing in SCORC/SB 489 Page 10 New Mexico to the greatest extent practicable and shall take that use into consideration in evaluating proposals.

b r e t º o t n = s k m e .214314.4 - 10 - e a n e d r e l u [ A d promotes and encourages the use of workers residing in New Mexico to the greatest extent practicable and shall take that use into consideration in evaluating proposals.

provided that such resources are located in the h school district in New Mexico where the abandoned facility is g o located, are necessary to maintain reliable service and are in t hr g e i k the public interest as determined by the commission.

h r i s SECTION 4.

[NEW MATERIAL ] FINANCING ORDER--APPLICATION hCONTENTS-- ,PENDING t, CONTENTS--PENDING APPLICATIONS.-- eSCORC/SB u489 gPage e11 b l A.

A qualifying utility that is abandoning a e e h n d d i = = o h qualifying generating facility may apply to the commission for l ] b ,d i a º e a financing order pursuant to this section to recover all of r i = r t e w d its energy transition costs through the issuance of energy mtransition abonds. n o d m :

b e d s º o t n = s k m e .214314.4 - 11 - e a n e d r e l u [ A d SCORC/SB 489 transition bonds.

(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 h associated mine that only services the abandoned qualifying u » r generating facility;

t h g e (b) identify costs not previously l i h r i s collected from the qualifying utility's customers for plant h , e h decommissioning and mine reclamation costs, subject to any tSCORC/SB u489 gPage e12 b l limitations ordered by the commission prior to January 1, 2019 e e , gh n d d i = = o h and affirmed by the New Mexico supreme court prior to the l ] b ,d i a º r effective date of the Energy Transition Act, associated with e r = t e w d the abandoned qualifying generating facility;

and m(c) ainclude nan oestimate dof mthe :financing costs associated with each series of energy transition bonds proposed to be issued;

b r e t º o t n = s k m e .214314.4 - 12 - e a n e d r e l u [ A d (c) include an estimate of the financing costs associated with each series of energy transition bonds proposed to be issued;

(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 h similar to the proposed energy transition bonds.

The request g o for such attestation may be made by a qualifying utility priorSCORC/SB t489 hrPage g13 eprior i k to an application for a financing order, and the state board of h r i s finance shall act upon such a request promptly;

h , t, (6) a commitment by the qualifying utility to e u g e b l file with the commission following the issuance of the energy e e h n d d i = = o h transition bonds:

l ] b ,d i a º e (a) a description of the final structure r i = r t e w d and pricing of the bonds;

m(b) aupdated nfinancing ocosts dand mpayment :amount required pursuant to Section 16 of the Energy Transition Act;

b e d s º o t n = s k m e .214314.4 - 13 - e a n e d r e l u [ A d SCORC/SB 489 (b) updated financing costs and payment amount required pursuant to Section 16 of the Energy Transition Act;

(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 h financing entity are at least one-half percent of the total u » r capital of the assignee;

tSCORC/SB h489 gPage e14 (9) identification of ancillary agreements l i h r i s that may be necessary or appropriate;

h , e h (10) a description of a proposed ratemaking t u g e b l process to reconcile and recover or refund any difference e e , gh n d d i = = o h between the energy transition costs financed by the energy l ] b ,d i a º r transition bonds and the actual final energy transition costs e r = t e w d incurred by the qualifying utility or the assignee;

m(11) a nproposed oratemaking dmethod mto :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;

b r e t º o t n = s k m e .214314.4 - 14 - e a n e d r e l u [ A d (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;

If an application for approval to abandon a qualifying generating facility is pending before the SCORC/SB 489 Page 15 commission on the effective date of the Energy Transition Act, the h qualifying utility may file a separate application for a g o financing order, and the commission may join or consolidate the t hr g e i k application for a financing order with the pending proceeding h r i s involving abandonment of the qualifying generating facility, h , t, with the consent of the applicant.

On such joinder or e u g e b l consolidation, the time periods prescribed by the Energy e e h n d d i = = o h Transition Act shall become applicable to the joined or l ] b ,d i a º e consolidated case as of the date of the joinder or r i = r t e w d consolidation.

mF. a n o d m :

b e d s º o t n = s k m e .214314.4 - 15 - e a n e d r e l u [ A d SCORC/SB 489 F.

[NEW MATERIAL ] FINANCING ORDER--ISSUANCE--ORDER--ISSUANCE--TERMS TERMS OF BONDS--REPORTSBONDS-- REPORTS TO COMMISSION OF DISBURSEMENT OF BOND PROCEEDS--REVIEWPROCEEDS-- REVIEW AND AUDIT OF RECORDS.-- A.

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 SCORC/SB 489 Page 16 and an order on an accompanying application of the qualifying utility h for approval to abandon the qualifying generating facility u » r within six months from the date the application for the t h g e financing order is filed with the commission.

For good cause l i h r i s shown, the commission may extend the time for issuing the order h , e h for an additional three months.

t u g e b l B.

Failure to issue an order approving the e e , gh n d d i = = o h application or advising of the application's noncompliance l ] b ,d i a º r pursuant to Subsection E of this section within the time e r = t e w d prescribed by Subsection A of this section shall be deemed mapproval of the application for a nfinancing oorder dand mapproval :to abandon the qualifying generating facility, if abandonment approval was requested as part of the application for the financing order pursuant to this subsection.

b r e t º o t n = s k m e .214314.4 - 16 - e a n e d r e l u [ A d 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 issuance of a financing order shall be the SCORC/SB 489 Page 17 only approval required for the authority granted in the financing order.

The commission shall issue a financing order approving the application if the commission finds that the h qualifying utility's application for the financing order g o complies with the requirements of Section 4 of the Energy t hr g e i k Transition Act.

If the commission finds that a qualifying h r i s utility's application does not comply with Section 4 of the h , t, Energy Transition Act, the commission shall advise the e u g e b l qualifying utility of any changes necessary to comply with that e e h n d d i = = o h section and provide the applicant an opportunity to amend the l ] b ,d i a º e application to make such changes.

Upon those changes being r i = r t e w d made, the commission shall issue a financing order approving mthe aapplication. n o d m :

b e d s º o t n = s k m e .214314.4 - 17 - e a n e d r e l u [ A d SCORC/SB 489 the application.

(2) approval for the qualifying utility to SCORC/SB 489 Page 18 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;

h (3) approval of the energy transition charges u » r necessary to recover the authorized energy transition costs, to t h g e be imposed through a non-bypassable energy transition charge as l i h r i s a separate line item on the qualifying utility's customer h , e h bills, assessed consistent with energy and demand cost t u g e b l allocations within each customer class, subject to update e e , gh n d d i = = o h pursuant to the notice filing contemplated by Paragraph (6) of lSubsection ]B bof ,dSection i4 aof ºthe rEnergy SubsectionTransition BAct and subject to the application of the adjustment mechanism as provided in Section 46 of the Energy Transition ActAct, anduntil ethe renergy =transition tbonds eissued wpursuant d subject to the applicationfinancing oforder and the adjustmentfinancing mechanismcosts asrelated mto athose nbonds oare dpaid min :full;

b r e t º o t n = s k m e .214314.4 - 18 - e a n e d r e l u [ A d provided in Section 6 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;

(6) approval to enter into necessary or SCORC/SB 489 Page 19 appropriate ancillary agreements;

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 h Energy Transition Act.

g o G.

A financing order shall provide that the t hr g e i k creation of energy transition property shall be simultaneous h r i s with the sale of the energy transition property to an assignee h , t, as provided in the application and the pledge of the energy e u g e b l transition property to secure energy transition bonds.

e e h n d d i = = o h H.

A financing order shall authorize the qualifying l ] b ,d i a º e utility to issue one or more series of energy transition bonds r i = r t e w d for a scheduled final maturity of no more than twenty-five myears afor neach oseries; d m :

b e d s º o t n = s k m e .214314.4 - 19 - e a n e d r e l u [ A d SCORC/SB 489 years for each series;

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 of the Energy Transition Act, that, during any period in which SCORC/SB 489 Page 20 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 h shall constitute a legal, valid and binding agreement of such u » r shareholders, partners or members of the assignee and is t h g e enforceable against such shareholders, partners or members.

l i h r i s J.

A financing order may require the qualifying h , e h utility to file with the commission a periodic report showing t u g e b l the receipt and disbursement of proceeds of energy transition e e , gh n d d i = = o h bonds and any other documents necessary for the qualifying l ] b ,d i a º r utility to implement the financing order.

Upon issuance of the e r = t e w d energy transition bonds, the qualifying utility shall file an madvice anotice nwith othe dcommission, msubject :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.

b r e t º o t n = s k m e .214314.4 - 20 - e a n e d r e l u [ A d 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.

A financing order may authorize the commission to review and audit the books and records of the qualifying SCORC/SB 489 Page 21 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.

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 h marketing of the proposed energy transition bonds.

g o M.

The provisions of this section shall not be t hr g e i k construed to limit the authority of the commission to:

h r i s (1) investigate the practices of or to audit h , t, the books and records of a qualifying utility;

or e u g e b l (2) issue such further orders as may be e e h n d d i = = o h necessary to effectuate the provisions of the Energy Transition l ] b ,d i a º e Act.

r i = r t e w d SECTION 6.

[NEWADJUSTMENT MATERIALMECHANISM--ADJUSTMENT ]PROCEDURES--HEARING ADJUSTMENTPROCEDURES MECHANISM--IF mCOMMISSION aDETERMINES nADJUSTMENT oMADE dIN mERROR.-- :A.

bIf ethe dcommission sissues ºa ofinancing torder, nthe =qualifying sutility kfor mwhich ethe .214314.4order -is 21issued -may echarge aSCORC/SB n489 ePage d22 rall eof lthe uqualifying [utility's Acustomers dan SCORC/SBenergy 489transition ADJUSTMENTcharge, PROCEDURES--HEARINGwhich PROCEDURESshall IFbe COMMISSIONallocated DETERMINESto ADJUSTMENTcustomer MADEclasses INconsistent ERROR.--with A.the production cost allocation methodology established by the commission in the qualifying utility's most recent general rate case.

If the commission issues a financing order, the qualifying utility for which the order is issued may charge all of the qualifying utility's customers an energy transition charge, which shall be allocated to customer classes consistent with the production cost allocation methodology established by the commission in the qualifying utility's most recent general rate case.

The commission shall periodically approve adjustments of the energy transition charges pursuant to the adjustment mechanism approved in the financing order to correct h for any over-collection or under-collection of the energy u » r transition charge and to provide for timely payment of t h g e scheduled principal of and interest on the energy transition l i h r i s bonds and the payment and recovery of financing costs in h , e h accordance with the financing order.

Except as provided in t u g e b l Subsection C of this section, the qualifying utility shall file e e , gh n d d i = = o h at least semiannually, or more frequently as provided in the l ] b ,d i a º r financing order:

e(1) ra =calculation testimating ewhether wthe dexisting (1)energy atransition calculationcharge estimatingis whethersufficient to provide for timely payment of scheduled principal of and interest on the menergy atransition nbonds oand dthe mpayment :and recovery of other financing costs in accordance with the financing order SCORC/SB 489 Page 23 or if either an over-collection or under-collection is projected;

b r e t º o t n = s k m e .214314.4 - 22 - e a n e d r e l u [ A d existing energy transition charge is sufficient to provide for timely payment of scheduled principal of and interest on the energy transition bonds and the payment and recovery of other financing costs in accordance with the financing order or if either an over-collection or under-collection is projected;

On the same day the qualifying utility files with the commission its calculation of the adjustment to the h energy transition charge, the qualifying utility shall cause g o notice of the filing to be given to the parties of record in t hr g e i k the case in which the financing order was issued.

h r i s F.

An adjustment to the energy transition charge h , t, filed by the qualifying utility shall be deemed approved e u g e b l without hearing thirty days after filing the adjustment unless:

e e h n d d i = = o h (1) no later than twenty days from the date lSCORC/SB ]489 bPage ,d24 i a º e the qualifying utility filed the calculation of the adjustment, r i = r t e w d the commission is notified of a potential mathematical or mtranscription aerror nin othe dadjustment; m :

b e d s º o t n = s k m e .214314.4 - 23 - e a n e d r e l u [ A d SCORC/SB 489 transcription error in the adjustment;

If the commission determines that a hearing is necessary, the commission shall hold a hearing on the proposed adjustment that shall be limited to determining whether there h is a mathematical or transcription error in the calculation of u » r the adjustment.

If, after a hearing, the commission determines t h g e that the calculation of the adjustment contains a mathematical l i h r i s or transcription error, the commission shall issue an order h , e h that rejects and corrects the adjustment.

The qualifying t u g e b l utility shall adjust the energy SCORC/SB 489 Page 25 transition charge in accordance e e , gh n d d i = = o h with the commission's calculation within five days from l ] b ,d i a º r issuance of the order.

If the commission does not issue an e r = t e w d order rejecting the adjustment with a determination of the mcorrected acalculation nwithin osixty ddays mfrom :the date the qualifying utility filed the adjustment, the adjustment to the energy transition charge shall be deemed approved.

b r e t º o t n = s k m e .214314.4 - 24 - e a n e d r e l u [ A d corrected calculation within sixty days from the date the qualifying utility filed the adjustment, the adjustment to the energy transition charge shall be deemed approved.

[NEW MATERIAL ] FINANCING ORDER--ORDER--IRREVOCABILITY-- IRREVOCABILITY--AMENDMENTS.--AMENDMENTS.-- A.

(1) provides for refinancing, retiring or h refunding all or a portion of an outstanding series of energy g o transition bonds issued pursuant to the original financing tSCORC/SB hr489 gPage e26 i k order;

provided that the commission includes in the amended h r i s financing order the findings and requirements specified in h , t, Section 5 of the Energy Transition Act;

or e u g e b l (2) adjusts the amount of energy transition e e h n d d i = = o h costs to be financed by energy transition bonds that have not l ] b ,d i a º e yet been issued to reflect updated estimated or actual costs r i = r t e w d that differ from costs estimated at the time of the initial mfinancing aorder nor oto dcorrect many :errors.

b e d s º o t n = s k m e .214314.4 - 25 - e a n e d r e l u [ A d SCORC/SB 489 financing order or to correct any errors.

[NEW MATERIAL ] AGGRIEVED PARTIES--REQUEST FOR REHEARING--JUDICIALREHEARING-- JUDICIAL REVIEW.-- A.

provided that such application shall be due no later than ten calendar days h after issuance of the financing order.

An application for g o rehearing shall be deemed denied if not acted uponSCORC/SB by489 thePage t27 hrupon gby ethe i k commission within ten calendar days after the filing of the h r i s application.

h , t, B.

An aggrieved party may file a notice of appeal e u g e b l e e h with the supreme court in accordance with Section 62-11-1 NMSA n d d i = = o h 1978;

provided that such notice shall be due no later than ten l ] b ,d i a º e calendar days after denial of an application for rehearing or, r i = r t e w d m a n o if rehearing is not applied for, no later than ten calendar ddays mafter :issuance of the financing order.

b e d s º o t n = s k m e .214314.4 - 26 - e a n e d r e l u [ A d days after issuance of the financing order.

[NEW MATERIAL ] CONDITIONS THAT KEEP FINANCING ORDERS IN EFFECT AND ENERGY TRANSITION CHARGES IMPOSED.-- A.

If energy transition bonds issued pursuant to a financing order are outstanding and the related energy transition costs have not been paid in full, the energy transition charges authorized by the financing order shall be collected by the qualifying utility or its successors or SCORC/SB 489 Page 28 assignees, or a collection agent, in full through a non-non-bypassable h bypassable charge that is a separate line item on customer g o bills and not a part of the qualifying utility's base rates.

t hr g e i k The charge shall be paid by all customers:

h r i s (1) receiving electric delivery service from h , t, the qualifying utility under commission-approved rate schedules e u g e b l or special contracts;

and e e h n d d i = = o h (2) who acquire electricity from an l ] b ,d i a º e alternative or subsequent electricity supplier in the utility r i = r t e w d service area, to the extent that such acquisition is permitted mby aNew nMexico olaw. d m :

b e d s º o t n = s k m e .214314.4 - 27 - e a n e d r e l u [ A d SCORC/SB 489 by New Mexico law.

[NEW MATERIAL ] QUALIFYING UTILITY DUTIES.-- A.

The failure of a qualifying utility to comply with any provision of the Energy Transition Act shall not invalidate, impair or affect a financing order, energy transition property, energy transition charge or energy SCORC/SB 489 Page 29 transition bonds and financing costs.

Payments to bondholders h or financing parties on the energy transition bonds shall be u » r made on a quarterly or semiannual basis pursuant to the terms t h g e of the energy transition bonds.

l i h r i s D.

For a qualifying utility that receives approval h , e h of a financing order and issues sources of energy transition t u g e b l bonds, the qualifying utility's generation and sources of e e , gh n d d i = = o h energy procured pursuant to power purchase agreements with a l ] b ,d i a º r term of twenty-four months or longer, and that are dedicated to e r = t e w d serve the qualifying utility's retail customers, shall not memit, aon naverage, omore dthan mfour :hundred pounds of carbon dioxide per megawatt-hour by January 1, 2023, and not more than two hundred pounds of carbon dioxide per megawatt-hour by January 1, 2032 and thereafter.

b r e t º o t n = s k m e .214314.4 - 28 - e a n e d r e l u [ A d emit, on average, more than four hundred pounds of carbon dioxide per megawatt-hour by January 1, 2023, and not more than two hundred pounds of carbon dioxide per megawatt-hour by January 1, 2032 and thereafter.

[NEW MATERIAL ] COMMISSION TREATMENT OF ENERGY TRANSITION BONDS.-- A.

or SCORC/SB 489 Page 30 (3) the energy transition costs to be financed by energy transition bonds as costs of the qualifying utility.

Reasonable actions taken by a qualifying utility to comply with the financing order shall be deemed to be just h and reasonable for ratemaking purposes.

Nothing in the Energy g o Transition Act shall:

t hr g e i k (1) prevent or preclude the commission from h r i s investigating the compliance of a qualifying utility with the h , t, terms and conditions of a financing order and requiring e u g e b l compliance therewith;

e e h n d d i = = o h (2) prevent or preclude the commission from l ] b ,d i a º e imposing regulatory sanctions against a qualifying utility for r i = r t e w d failure to comply with the terms and conditions of a financing morder aor nthe orequirements dof mthe :Energy Transition Act;

b e d s º o t n = s k m e .214314.4 - 29 - e a n e d r e l u [ A d SCORC/SB 489 order or the requirements of the Energy Transition Act;

The commission shall not order or require a qualifying utility to issue energy transition bonds to finance any costs associated with abandonment of a qualifying SCORC/SB 489 Page 31 generating facility.

h SECTION 12.

[NEW MATERIAL ] ENERGY TRANSITION PROPERTY--PROPERTY--ENERGY u » r ENERGY TRANSITION REVENUES.-- t h g e A.

Energy transition property that is created in a l i h r i s financing order shall constitute an existing, present property h , e h right, notwithstanding that the imposition and collection of t u g e b l energy transition charges depend on the qualifying utility e e , gh n d d i = = o h continuing to provide electric energy or continuing to perform l ] b ,d i a º r its service functions relating to the collection of energy e r = t e w d transition charges or on the level of future energy mconsumption. a n o d m :

b r e t º o t n = s k m e .214314.4 - 30 - e a n e d r e l u [ A d consumption.

All energy transition property created in a financing order shall continue to exist until the energy transition bonds issued and all related financing costs SCORC/SB 489 Page 32 pursuant to a financing order are paid in full.

All or any portion of energy transition property h may be pledged to secure the payment of energy transition bonds g o and all financing costs.

t hr g e i k E.

The formation by a qualifying utility of a non-non-utility h r i s utility affiliate for the purposes of acquiring, owning or h , t, administering energy transition property, issuing energy e u g e b l transition bonds pursuant to a financing order and transacting ea etransfer, hsale, nconveyance, dassignment, dgrant iof =a =security ointerest hin aor transfer,pledge sale,of conveyance,energy assignment,transition grantproperty ofby a securityqualifying lutility ]to ba ,dnon-utility iaffiliate, ato ºthe eextent interestpreviously authorized in ora pledgefinancing order, does not require any further approval of energythe transitioncommission propertyand byshall anot rbe isubject =to rthe trules eof wthe dcommission qualifyingregarding utilityClass toI atransactions non-utilityand affiliate,Class toII transactions, as defined by Section 62-3-3 NMSA 1978, except that the extentcommission mmay aSCORC/SB n489 oPage d33 mexamine :the books and records of the non-utility affiliate.

b e d s º o t n = s k m e .214314.4 - 31 - e a n e d r e l u [ A d SCORC/SB 489 previously authorized in a financing order, does not require any further approval of the commission and shall not be subject to the rules of the commission regarding Class I transactions and Class II transactions, as defined by Section 62-3-3 NMSA 1978, except that the commission may examine the books and records of the non-utility affiliate.

h G.

Energy transition property, energy transition u » r revenues and the interests of an assignee, bondholder or t h g e financing party in energy transition property and energy l i h r i s transition revenues are not subject to set-off, counterclaim, h , e h surcharge or defense by the qualifying utility or any other t u g e b l person or in connection with the bankruptcy, reorganization or e e , gh n d d i = = o h other insolvency or receivership proceeding of the qualifying l ] b ,d i a º r utility, non-utility affiliate or any other entity.

e r = t e w d H.

Any successor to a qualifying utility shall be mbound by the requirements of the Energy Transition Act and shall perform and satisfy all obligations of, and have the same rights under a nfinancing oorder das, mthe :qualifying SCORC/SB 489 Page 34 utility under the financing order in the same manner and to the same extent as the qualifying utility, including the obligation to collect and pay energy transition revenues to persons entitled to receive the revenues.

b r e t º o t n = s k m e .214314.4 - 32 - e a n e d r e l u [ A d bound by the requirements of the Energy Transition Act and shall perform and satisfy all obligations of, and have the same rights under a financing order as, the qualifying utility under the financing order in the same manner and to the same extent as the qualifying utility, including the obligation to collect and pay energy transition revenues to persons entitled to receive the revenues.

[NEW MATERIAL ] SECURITY INTERESTS--INTERESTS--CREATION CREATION OF SECURITY INTEREST--PRIORITY OVER OTHER LIENS--LIENS--ATTACHMENT ATTACHMENT ON FILING WITH SECRETARY OF STATE.-- A.

h B.

The description or reference to energy g o transition property in a transfer or security agreement and a t hr g e i k financing statement is sufficient only if the description or h r i s reference refers to the Energy Transition Act and the financing h , t, order creating the energy transition property.

This section e u g e b l applies to all purported transfers of, grants of liens on or e e h n d d i = = o h security interests in, energy transition property.

lSCORC/SB ]489 bPage ,d35 i a º e C.

A security interest in energy transition r i = r t e w d property is created, valid and binding at the latest of when:

m(1) athe nfinancing oorder dis missued; :

b e d s º o t n = s k m e .214314.4 - 33 - e a n e d r e l u [ A d SCORC/SB 489 (1) the financing order is issued;

Financing statements filed pursuant h to this section shall be effective until a termination g o statement is filed.

t hr g e i k E.

A security interest in energy transition h r i s property is a continuously perfected security interest and has h , t, priority over any other lien that may subsequently attach to e u g e b l e e h the energy transition property unless the holder of the n d d i = = o h security interest has agreed in writing otherwise.

lSCORC/SB ]489 bPage ,d36 i a º e F.

The priority of a security interest in energy r i = r t e w d transition property is not affected by the commingling of menergy atransition nrevenues owith dother mfunds. :

b e d s º o t n = s k m e .214314.4 - 34 - e a n e d r e l u [ A d energy transition revenues with other funds.

[NEW MATERIAL ] SALE OF ENERGY TRANSITION PROPERTY--PERFECTINGPROPERTY-- PERFECTING INTERESTS--ABSOLUTE TRANSFER AND TRUE SALE REQUIREMENTS.-- A.

Any sale, assignment or transfer of energy transition property to an assignee that is a financing entity that is wholly owned, directly or indirectly, by the utility shall be an absolute transfer and true sale of, and not a pledge of or secured transaction relating to, the seller's h right, title and interest in, to and under the energy g o transition property if the documents governing the transaction t hr g e i k expressly state that the transaction is a sale or other h r i s absolute transfer.

A transfer of an interest in energy hSCORC/SB ,489 t,Page 37 transition property shall be created when:

e u g e b l (1) the financing order creating the energy e e h n d d i = = o h transition property has become effective;

l ] b ,d i a º e (2) the documents evidencing the transfer of r i = r t e w d energy transition property have been executed and delivered to mthe aassignee; n o d m :

b e d s º o t n = s k m e .214314.4 - 35 - e a n e d r e l u [ A d SCORC/SB 489 the assignee;

h (2) the retention by the seller of:

g o (a) a partial or residual interest, t hr g e i k including an equity interest, in the energy transition h r i s property, whether direct or indirect, or whether subordinate orSCORC/SB h489 ,Page t,38 or otherwise;

or e u g e b l e e h (b) the right to recover costs n d d i = = o h associated with taxes or license fees imposed on the collection l ] b ,d i a º e of energy transition revenues;

r i = r t e w d (3) any recourse that the purchaser may have magainst athe nseller; o d m :

b e d s º o t n = s k m e .214314.4 - 36 - e a n e d r e l u [ A d against the seller;

(7) any subsequent order of the commission amending a financing order pursuant to Subsection B of Section 7 of the Energy Transition Act;

[NEW MATERIAL ] SCORCºEXEMPTION FROM»SCORC FEE ASSESSMENTS.--The SCORCº imposition, collection and receipt of an energy transition charge is exempt from energy transition charge stated as a separate line entry on a customer bill sent h by a qualifying utility may be subject to»SCORCto an assessment g o of a franchise fee imposed by a municipality, county or other t hr g e i k political subdivision of the statestate, SCORCºand , pursuant to a hutility rSCORC/SB i489 sPage utility39 franchise agreement.

The imposition, collection and h , t, receipt of an energy transition charge is exempt from»SCORCfrom e u g e b l e e h inspection and supervision fees assessed pursuant to the Public n d d i = = o h Utility Act.

l ] b ,d i a º e SECTION 16.

[NEW MATERIAL] ENERGY TRANSITION INDIAN rAFFAIRS iFUND-- =ENERGY rTRANSITION tECONOMIC eDEVELOPMENT wASSISTANCE dFUND-- mENERGY a n o AFFAIRS FUND--ENERGY TRANSITION ECONOMICDISPLACED DEVELOPMENTWORKER ASSISTANCE dFUND--COMMUNITY mADVISORY :COMMITTEE.-- A.

b e d s º o t n = s k m e .214314.4 - 37 - e a n e d r e l u [ A d SCORC/SB 489 FUND--ENERGY TRANSITION DISPLACED WORKER ASSISTANCE FUND-- COMMUNITY ADVISORY COMMITTEE.-- A.

The Indian affairs department shall develop an Indian affairs assistance plan to assist tribal and native people in the affected community that shall provide for the h disbursement of money in the energy transition Indian affairs g o fund.

In developing the plan, the Indian affairs department t hr g e i k shall establish a public planning process in the affected hSCORC/SB r489 iPage s40 community to inform the use of money in the fund.

The Indian h , t, affairs department shall engage in consultation with Indian e u g e b l e e h nations, tribes and pueblos in the affected community pursuant n d d i = = o h to the State-Tribal Collaboration Act.

The public planning l ] b ,d i a º e process shall include at least three public meetings in the r i = r t e w d affected community.

Expenditures from the fund shall be made mafter acompletion nof othe dplan mand :as follows:

b e d s º o t n = s k m e .214314.4 - 38 - e a n e d r e l u [ A d after completion of the plan and as follows:

The economic development department shall administer the energy transition economic development assistance fund, and money in the fund is subject to appropriation by the legislature only to that department to SCORC/SB 489 Page 41 assist in diversifying and promoting the affected community's economy by fostering economic development opportunities h unrelated to fossil fuel development or use.

g o F.

The economic development department shall t hr g e i k develop an economic diversification and development plan to h r i s assist the affected community that shall provide for the h , t, disbursement of money in the energy transition economic e u g e b l development assistance fund.

In developing the plan, the e e h n d d i = = o h economic development department shall request recommendations l ] b ,d i a º e from the affected community's community advisory committee r i = r t e w d pursuant to Subsection K of this section and establish a public minput aprocess nin othe daffected mcommunity :to inform the use of money in the fund.

b e d s º o t n = s k m e .214314.4 - 39 - e a n e d r e l u [ A d SCORC/SB 489 input process in the affected community to inform the use of money in the fund.

and SCORC/SB 489 Page 42 (3) to a municipality, county, Indian nation, pueblo or tribe or land grant community in New Mexico for programs designed to promote economic development in the h affected community.

g o G.

The "energy transition displaced worker t hr g e i k assistance fund" is created in the state treasury.

The fund h r i s shall consist of appropriations, gifts, grants, donations and h , t, bequests made to the fund.

Income from the fund shall be e u g e b l e e h credited to the fund, and money in the fund shall not revert or n d d i = = o h be transferred to any other fund at the end of a fiscal year.

l ] b ,d i a º e H.

The workforce solutions department shall radminister ithe =energy rtransition tdisplaced eworker wassistance dfund, administerand money in the energyfund transitionis displacedsubject workerto assistanceappropriation mby athe nlegislature oonly dto mthat :department to assist displaced workers in an affected community.

b e d s º o t n = s k m e .214314.4 - 40 - e a n e d r e l u [ A d fund, and money in the fund is subject to appropriation by the legislature only to that department to assist displaced workers in an affected community.

In developing the plan, the workforce solutions department shall request recommendations from the affected community's community advisory committee pursuant to Subsection K of this section and establish a public input process in the affected SCORC/SB 489 Page 43 community to inform the use of money in the energy transition displaced worker assistance fund.

Expenditures from the energy transition displaced worker assistance fund shall be made h pursuant to the plan and as follows:

g o (1) to assist employers of displaced workers t hr g e i k to qualify for any tax relief established under state or h r i s federal law;

h , t, (2) to the workforce solutions department:

e u g e b l (a) to provide assistance to displaced e e h n d d i = = o h workers using any program established at that department;

and l ] b ,d i a º e (b) for payment of costs associated with r i = r t e w d displaced workers enrolling and participating in certified mapprenticeship aprograms nin oNew dMexico; m :

b e d s º o t n = s k m e .214314.4 - 41 - e a n e d r e l u [ A d SCORC/SB 489 apprenticeship programs in New Mexico;

Within thirty days of receipt of energy transition bond proceeds, a qualifying generating facility SCORC/SB 489 Page 44 located in New Mexico shall transfer the following percentages of the financed amount of energy transition bonds as follows:

and h (3) three and thirty-five hundredths percent g o to the workforce solutions department for deposit in the energy t hr g e i k transition displaced worker assistance fund.

h r i s K.

In each affected community, a community advisory h , t, committee shall be convened.

All meetings of the community e u g e b l e e h advisory committee shall be held pursuant to the Open Meetings n d d i = = o h Act.

The secretaries of Indian affairs, economic development l ] b ,d i a º e and workforce solutions shall appoint three conveners who r i = r t e w d reside in the affected community, at least one from each major mpolitical aparty nand oone drepresenting mone :of the Navajo Nation chapter houses in the affected community.

bThe econveners dshall sappoint ºmembers oof tthe ncommunity =advisory scommittee kto minclude ea .214314.4member -from 42each -municipality, ecounty, aIndian nnation, epueblo, dtribe rand eland lgrant ucommunity, [if Aany, din politicalthe partyaffected andcommunity, oneat least four appointees representing onediverse economic and SCORC/SB 489 Page 45 cultural perspectives of the Navajoaffected Nationcommunity chapterand housesone appointee representing displaced workers in the affected community.

The conveners shall appoint members of the community advisory committee to include a member from each municipality, county, Indian nation, pueblo, tribe and land grant community, if any, in the affected community, at least four appointees representing diverse economic and cultural perspectives of the affected community and one appointee representing displaced workers in the affected community.

and h (2) "displaced worker" means a New Mexico g o resident who:

t hr g e i k (a) within the previous twelve months, h r i s was terminated from employment, or whose contract was h , t, terminated, due to the abandonment of a New Mexico facility e u g e b l producing electricity that resulted in displacing at least e e h n d d i = = o h forty workers;

l ] b ,d i a º e (b) had at least seventy-five percent of r i = r t e w d the resident's net income, as that term is defined in the mIncome aTax nAct, ofrom dthe memployment :or contract described in Subparagraph (a) of this paragraph;

bSCORC/SB e489 dPage s46 º(c) ohas tnot nbeen =able sto kreplace mthe elost .214314.4wages -described 43in -Subparagraph e(b) aof nthis eparagraph dor rwhose eannual lwages uare [at Aleast dtwenty-five SCORC/SBpercent 489less Incomethan Taxwhen Act, from the employmentqualifying orfacility contractwas describedoperating; in Subparagraph (a) of this paragraph;

(c) has not been able to replace the lost wages described in Subparagraph (b) of this paragraph or whose annual wages are at least twenty-five percent less than when the qualifying facility was operating;

[NEW MATERIAL ] ENERGY TRANSITION BONDS NOT PUBLIC DEBT.--EnergyDEBT.-- Energy transition bonds issued pursuant to the Energy Transition Act shall not constitute a debt or a pledge of the faith and credit or taxing power of this state or of any county, municipality or any other political subdivision of this state.

Bondholders shall have no right to have taxes levied by the legislature or the taxing authority of any county, municipality or other political subdivision of this state for h the payment of the principal of or interest on energy g o transition bonds.

The issuance of energy transition bonds does t hr g e i k not obligate the state or a political subdivision of the state h r i s to levy any tax or make any appropriation for payment of the h , t, principal of or interest on the bonds.

e u g e b l e e h SECTION 18.

[NEW MATERIAL ] ENERGY TRANSITION BONDS AS n d d i = = o h LEGAL INVESTMENTS.--Energy transition bonds shall be legal l ] b ,d i a º e investments for all governmental units, permanent funds of the rstate, ifinance =authorities, rfinancial tinstitutions, einsurance wcompanies, dfiduciaries mand aother npersons orequiring state,statutory financeauthority authorities,regarding financiallegal institutions,investments. insurance d m :

bSCORC/SB e489 dPage s47 ºSECTION o19. t n = s k m e .214314.4 - 44 - e a n e d r e l u [ A d companies, fiduciaries and other persons requiring statutory authority regarding legal investments.

SECTIONSTATE 19.PLEDGE NOT TO IMPAIR.-- A.

[NEW MATERIAL ] STATE PLEDGE NOT TO IMPAIR.-- A.

Any person who issues energy transition bonds is permitted to include the pledge specified in Subsection A of this section in the energy transition bonds, ancillary agreements and documentation related to the issuance and h marketing of the energy transition bonds.

g o SECTION 20.

[NEW MATERIAL ] CHOICE OF LAW.--The laws of t hr g e i k the state of New Mexico as set forth in the Energy Transition h r i s Act shall govern the validity, enforceability, attachment, h , t, perfection, priority and exercise of remedies with respect to e u g e b l e e h the transfer of an interest or right of creation of a security n d d i = = o h interest in energy transition property, an energy transition l ] b ,d i a º e charge or a financing order.

rSCORC/SB i489 =Page r48 t e w d SECTION 21.

[NEWCONFLICTS.--In MATERIALthe ]event CONFLICTS.--Inof any conflict between the eventEnergy Transition Act and any other law regarding the attachment, assignment or perfection, or the effect of mperfection, aor npriority oof dany msecurity :interest in or transfer of energy transition property, the Energy Transition Act shall govern to the extent of the conflict.

b e d s º o t n = s k m e .214314.4 - 45 - e a n e d r e l u [ A d SCORC/SB 489 any conflict between the Energy Transition Act and any other law regarding the attachment, assignment or perfection, or the effect of perfection, or priority of any security interest in or transfer of energy transition property, the Energy Transition Act shall govern to the extent of the conflict.

[NEW MATERIAL ] VALIDITY ON ACTIONS IF ACT HELD INVALID.--EffectiveINVALID.-- Effective on the date that energy transition bonds are first issued under the Energy Transition Act, if any provision of that act is invalidated, superseded, replaced, repealed or expires for any reason, that occurrence shall not affect the validity of any action allowed pursuant to that act that is taken by the commission, a qualifying utility, an assignee or any other person, a collection agent, a financing party, a bondholder or a party to an ancillary agreement and, to prevent the impairment of energy transition bonds issued or authorized in a financing order issued pursuant to the Energy h Transition Act, any such action shall remain in full force and u » r effect with respect to all energy transition bonds issued or t h g e authorized in a financing order pursuant to the Energy l i h r i s Transition Act before the date that such provision is held to h , e h be invalid or is invalidated, superseded, replaced, repealed or t u g e b l expires for any reason.

e e , gh n d d i = = o h SECTION 23.

[NEW MATERIAL ] APPLICABILITY.--The provisions l ] b ,d i a º r of the Energy Transition Act shall not apply to a qualifying eutility rSCORC/SB =489 tPage e49 w d utility that makes an initial application for a financing order mmore athan ntwelve oyears dafter mthe :effective date of that act.

b r e t º o t n = s k m e .214314.4 - 46 - e a n e d r e l u [ A d more than twelve years after the effective date of that act.

"[NEW"REQUIRING MATERIAL ] REQUIRING THE HIRING OF APPRENTICES FOR THE CONSTRUCTION OF FACILITIES THAT GENERATE ELECTRICITY.-- A.

Subject to availability of qualified applicants, the construction of facilities that generate electricity for New Mexico retail customers shall employ apprentices from an apprenticeship program during the construction phase of a h project at a minimum level of the following percentages of all g o persons employed for the project:

t hr g e i k (1) ten percent for projects for which on-siteSCORC/SB h489 rPage i50 son-site construction commences beginning January 1, 2020, and prior to h , t, January 1, 2024;

e u g e b l (2) seventeen and one-half percent for e e h n d d i = = o h projects for which on-site construction commences beginning l ] b ,d i a º e January 1, 2024, and prior to January 1, 2026;

and r i = r t e w d (3) twenty-five percent for projects for which mon-site aconstruction ncommences obeginning dJanuary m1, :2026.

b e d s º o t n = s k m e .214314.4 - 47 - e a n e d r e l u [ A d SCORC/SB 489 on-site construction commences beginning January 1, 2026.

No public utility shall begin the construction or operation of any public utility plant or system or of any h extension of any plant or system without first obtaining from u » r the commission a certificate that public convenience and tSCORC/SB h489 gPage e51 necessity require or will require such construction or l i h r i s operation.

This section does not require a public utility to h , e h secure a certificate for an extension within any municipality t u g e b l or district within which it lawfully commenced operations e e , gh n d d i = = o h before June 13, 1941 or for an extension within or to territory l ] b ,d i a º r already served by it, necessary in the ordinary course of its e r = t e w d business, or for an extension into territory contiguous to that malready aoccupied nby oit dand mthat :is not receiving similar service from another utility.

b r e t º o t n = s k m e .214314.4 - 48 - e a n e d r e l u [ A d already occupied by it and that is not receiving similar service from another utility.

SCORC/SB 489 Page 52 B.

If a certificate of public convenience and necessity is required pursuant to this section for the h construction or extension of a generating plant or transmission u » r lines and associated facilities, a public utility may include t h g e in the application for the certificate a request that the l i h r i s commission determine the ratemaking principles and treatment h , e h that will be applicable for the facilities that are the subject t u g e b l of the application for the certificate.

If such a request is e e , gh n d d i = = o h made, the commission shall, in the order granting the l ] b ,d i a º r certificate, set forth the ratemaking principles and treatment e r = t e w d that will be applicable to the public utility's stake in the mcertified afacilities nin oall dratemaking mproceedings :on and after such time as the facilities are placed in service.

b r e t º o t n = s k m e .214314.4 - 49 - e a n e d r e l u [ A d SCORC/SB 489 certified facilities in all ratemaking proceedings on and after such time as the facilities are placed in service.

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, SCORC/SB 489 Page 53 pursuant to commission order, that the application has been filed.

The commission shall issue its order granting or denying the h application within nine months from the date the application is u » r filed with the commission.

Failure to issue its order within t h g e nine months is deemed to be approval and final disposition of l i h r i s the application;

provided, however, that the commission may h , e h extend the time for granting approval for an additional six t u g e b l months for good cause shown.

e e , gh n d d i = = o h D.

In an application for a certificate of public l ] b ,d i a º r convenience and necessity for an energy storage system, the e r = t e w d commission shall approve energy storage systems that:

m(1) areduce ncosts oto dratepayers mby :avoiding or deferring the need for investment in new generation and for upgrades to systems for the transmission and distribution of energy;

b r e t º o t n = s k m e .214314.4 - 50 - e a n e d r e l u [ A d (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;

SCORC/SB 489 Page 54 (6) provide the public utility with the 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 h alternatives.

g o [D.] E.

t hr g e i k (1) "energy storage system" means methods and h r i s technologies used to store electricity;

and h , t, (2) "mutual domestic water consumer e u g e b l association" means an association created and organized e e h n d d i = = o h pursuant to the provisions of:

l ] b ,d i a º e [(1)] (a) Laws 1947, Chapter 206;

Laws r i = r t e w d 1949, Chapter 79;

or m(b) athe nSanitary oProjects dAct." mSECTION :26.

b e d s º o t n = s k m e .214314.4 - 51 - e a n e d r e l u [ A d SCORC/SB 489 [(2)] (b) the Sanitary Projects Act." SECTION 26.

Except as provided in Subsection E of this section, each distribution cooperative organized under the Rural Electric Cooperative Act shall meet the renewable portfolio standard requirements, as provided in this section, to include renewable energy in its electric energy supply SCORC/SB 489 Page 55 portfolio as demonstrated by its retirement of renewable energy certificates.

Requirements and targets of the renewable portfolio standard are as followsfollows: :

(1) no later than January 1, 2015, renewable energy shall comprise no less than five percent of each h distribution cooperative's total retail sales to New Mexico g o customers;

t hr g e i k (2) the renewable portfolio standard shall h r i s increase by one percent per year thereafter until January 1, h , t, 2020, at which time the renewable portfolio standard shall be e u g e b l e e h ten percent of the distribution cooperative's total retail n d d i = = o h sales to New Mexico customers;

l(3) ] b ,d i a ºdistribution ecooperative (3)shall [thehave renewablethe portfoliofollowing standardtargets ofand eachrequirements rfor irenewable =energy rand tzero ecarbon wresources das m a npercentage oof the distribution cooperativecooperative's shalltotal beretail diversifiedsales asin toNew theMexico: type of d m :

b e d s º o t n = s k m e .214314.4 - 52 - e a n e d r e l u [ A d renewable energy resource, taking into consideration the overall reliability, availability and dispatch flexibility and the cost of the various renewable energy resources made available to the distribution cooperative by its suppliers of electric power;

and] a distribution cooperative shall have the following targets and requirements for renewable energy and zero carbon resources as a percentage of the distribution cooperative's total retail sales in New Mexico:

2) the rural electric cooperative is able to provide reliable electric SCORC/SB 489 Page 56 service while implementing the target;

h and g o (4) renewable energy resources that are in a t hr g e i k distribution cooperative's energy supply portfolio on January h r i s 1, 2008 shall be counted in determining compliance with this h , t, section.

eB. u g e b l [B.

If a distribution cooperative determines that, e e h n d d i = = o h in any given year, the cost of renewable energy that would need l ] b ,d i a º e to be procured or generated for purposes of compliance with the r i = r t e w d renewable portfolio standard would be greater than the m a n o d m :

b e d s º o t n = s k m e .214314.4 - 53 - e a n e d r e l u [ A d SCORC/SB 489 reasonable cost threshold, the distribution cooperative shall not be required to incur that cost;

provided that the existence of this condition excusing performance in any given year shall not operate to delay any renewable portfolio standard in subsequent years.

For purposes of the Rural Electric Cooperative Act, "reasonable cost threshold" means an amount that shall be no greater than one percent of the distribution cooperative's gross receipts from business transacted in New Mexico for the preceding calendar year.

C.] B.

The report shall include the cost of the renewable energy resources purchased and generated by the distribution cooperative to meet the renewable portfolio standard, an explanation of steps taken to minimize h those costs, including competitive procurement and comparison u » r of the price of electricity from renewable energy resources in t h g e the bids received by the distribution cooperative to recent l i h r i s prices for such electricity elsewhere in the southwestern h , e h United States, and an annual compliance plan for meeting the t u g e b l renewable portfolio standard for the following three years.

e e , gh n d d i = = o h C.

If, in any given year, a distribution lcooperative ]determines bthat ,dthe iaverage aannual ºlevelized rcost cooperativeof determinesrenewable energy that would need to be procured or generated for purposes of compliance with the averagerenewable annualSCORC/SB levelized489 costPage e57 rportfolio =standard twould ebe wgreater dthan sixty dollars ($60.00) per megawatt-hour at the point of interconnection of the renewable energy thatresource wouldwith needthe totransmission besystem, procuredadjusted orfor generatedinflation mafter a2020, nthe odistribution dcooperative mshall :not be required to incur that excess cost;

b r e t º o t n = s k m e .214314.4 - 54 - e a n e d r e l u [ A d for purposes of compliance with the renewable portfolio standard would be greater than sixty dollars ($60.00) per megawatt-hour at the point of interconnection of the renewable energy resource with the transmission system, adjusted for inflation after 2020, the distribution cooperative shall not be required to incur that excess cost;

A distribution cooperative organized pursuant to the Rural Electric Cooperative Act shall meet the requirements and targets of the renewable portfolio standard pursuant to Subsection A of this section as demonstrated by the h cooperative's retirement of renewable energy certificates u » r associated with energy assigned to the cooperative;

provided t h g e that a generation and transmission cooperative referred to in l i h r i s Section 62-6-4 NMSA 1978 shall be responsible for meeting the h , e h requirements and targets for all energy supplied to the t u g e b l distribution cooperatives in New Mexico.

Energy from renewableSCORC/SB e489 ePage ,58 ghrenewable n d d i = = o h energy and zero carbon resources that a generation and l ] b ,d i a º r transmission cooperative supplies in compliance with the e r = t e w d requirements and targets shall be verified at the point where mthe ageneration nand otransmission dcooperative mproduces :or takes delivery of the energy on behalf of the distribution cooperatives that the generation and transmission cooperative is serving." SECTION 27.

b r e t º o t n = s k m e .214314.4 - 55 - e a n e d r e l u [ A d SCORC/SB 489 the generation and transmission cooperative produces or takes delivery of the energy on behalf of the distribution cooperatives that the generation and transmission cooperative is serving." SECTION 27.

"renewable energy" means electric energy h generated by use of renewable energy resources and delivered to u » r a rural electric cooperative;

t h g e C.

"renewable energy certificate" means a l i h r i s certificate or other record, in a format approved by the public h , e h regulation commission, that represents all the environmental t u g e b l attributes from one megawatt-hour of electricitySCORC/SB generated489 fromPage e59 eelectricity ,generated ghfrom n d d i = = o h renewable energy;

l ] b ,d i a º r [B.] D.

"renewable energy resource" means electric e r = t e w d or useful thermal energy:

m(1) agenerated nby ouse dof mthe :following energy resources, with or without energy storage and delivered to a rural electric cooperative:

b(a) rsolar, ewind tand ºgeothermal; o t n = s k m e .214314.4 - 56 - e a n e d r e l u [ A d (1) generated by use of [low- or zero-emissions generation technology with substantial long-term production potential;

and (2) generated by use of renewable] the following energy resources, [that may include] with or without energy storage and delivered to a rural electric cooperative:

(a) solar, wind and geothermal [resources ];

[(c)] (d) fuel cells that [are] do not use fossil [fueled] fuels to create electricity;

[and (d)] (e) biomass resources, [such as] limited to agriculture or animal waste, small diameter timber, not to exceed eight inchesinches, , salt cedar and other phreatophyte h or woody vegetation removed from river basins or watersheds in g o New Mexico;

provided that these resources are from facilities t hr g e i k certified by the energy, minerals and natural resources h r i s department to:

1) be of appropriate scale to have sustainable h , t, feedstock in the near vicinity;

2) have zero life cycle carbon e u g e b l emissions;

and 3) meet scientifically determined restoration, e e h n d d i = = o h sustainability and soil nutrient principles;

and lSCORC/SB ]489 bPage ,d60 i a º e (f) landfill gas and anaerobically r i = r t e w d digested waste biomass;

[butand ](2) anddoes mnot ainclude nelectric oenergy dgenerated mby :use of fossil fuel or nuclear energy;

bE. e d s º o t n = s k m e .214314.4 - 57 - e a n e d r e l u [ A d SCORC/SB 489 [(3)] (2) does not include electric energy generated by use of fossil fuel or nuclear energy;

[and ] [C.

] E.

"zero carbon resource standard" means providing h New Mexico rural electric cooperative retail customers with g o electricity generated from one hundred percent zero carbon t hr g e i k resources." h r i s SECTION 28.

Section 62-16-3 NMSA 1978 (being Laws 2004, h , t, Chapter 65, Section 3, as amended) is amended to read:

e u g e b l e e h "62-16-3.

DEFINITIONS.--As used in the Renewable Energy n d d i = = o h Act:

lSCORC/SB ]489 bPage ,d61 i a º e A.

"commission" means the public regulation r i = r t e w d m a n o commission;

dB. m :

b e d s º o t n = s k m e .214314.4 - 58 - e a n e d r e l u [ A d B.

[B.] C.

[C.D.

] D.

[D.E.

]"reasonable E.cost threshold" means an average annual levelized cost of sixty dollars ($60.00) per megawatt-hour at the point of interconnection of the renewable energy resource with the transmission system, adjusted for inflation after 2020;

"reasonableF. cost threshold" means [the cost established by the commission, above which a public utility shall not be required to add renewable energy to its electric energy supply portfolio pursuant to the renewable portfolio standard] an average annual levelized cost of sixty dollars ($60.00) per megawatt-hour at the point of interconnection of the renewable energy resource with the transmission system, adjusted for inflation after 2020;

[E."renewable energy" means electric energy generated by use of renewable energy resources and delivered to a public utility;

]G. F.

"renewable energy"energy certificate" means electrica energycertificate hor [(1)other generatedrecord, byin usea offormat low-approved orby zero-the gcommission, othat emissionsrepresents generationall technologythe withenvironmental substantialattributes long-termfrom tone hrmegawatt-hour gof eelectricity igenerated kfrom productionrenewable potential;energy;

andH. h r i s (2)] generated by use of renewable energy h , t, resources [that may include:

e"renewable uenergy gresource" emeans bthe lfollowing (a)SCORC/SB solar,489 windPage and62 geothermalenergy eresources, ewith hor nwithout denergy dstorage: i = = o h resources;

l(1) ]solar, bwind ,dand igeothermal; a º e (b) hydropower facilities brought in r i = r t e w d service after July 1, 2007;

m(2) ahydropower nfacilities obrought din mservice :on or after July 1, 2007;

b(3) ebiomass dresources, slimited ºto oagriculture tor nanimal =waste, ssmall kdiameter mtimber, enot .214314.4to -exceed 59eight -inches, esalt acedar nand eother dphreatophyte ror ewoody lvegetation uremoved [from Ariver dbasins SCORC/SBor 489watersheds (c)in fuelNew cellsMexico; that are not fossil fueled;

andprovided (d)that biomassthese resources,resources suchare as agriculture or animal waste, small diameter timber, salt cedar and other phreatophyte or woody vegetation removed from riverfacilities basinscertified orby watershedsthe inenergy, Newminerals Mexico, landfill gas and anaerobicallynatural digestedresources wastedepartment biomass;to:

but (3) does not include electric energy generated by use of fossil fuel or nuclear energy] and delivered to a public utility;

[F.

] G.

"renewable energy certificate" means a certificate or other record, in a format approved by the commission, that represents all the environmental attributes from one [kilowatt-hour ] megawatt-hour of electricity [generation ] generated from [a] renewable energy;

[resource] H.

"renewable energy resource" means the following h energy resources, with or without energy storage:

g o (1) solar, wind and geothermal;

t hr g e i k (2) hydropower facilities brought in service h r i s on or after July 1, 2007;

h , t, (3) biomass resources, limited to agriculture e u g e b l e e h or animal waste, small diameter timber, not to exceed eight n d d i = = o h inches, salt cedar and other phreatophyte or woody vegetation l ] b ,d i a º e removed from river basins or watersheds in New Mexico;

provided r i = r t e w d that these resources are from facilities certified by the m a n o d m :

b e d s º o t n = s k m e .214314.4 - 60 - e a n e d r e l u [ A d energy, minerals and natural resources department to:

[G.] I.

"renewable portfolio standard" means the minimum percentage of retail sales of electricity by a public utility to electric consumers in New Mexico that is required by the Renewable Energy Act to be [supplied by ] from renewable energy;

[andSCORC/SB H.]489 Page 63 J.

"renewable purchased power agreement" means an agreement that binds an entity generating power from renewable energy resources to provide power at a specified h price and binds [a public utility to purchase the power at ] the g o purchaser to that price;

t hr g e i k K.

"zero carbon resource" means an electricity h r i s generation resource that emits no carbon dioxide into the h , t, atmosphere, or that reduces methane emitted into the atmosphere e u g e b l in an amount equal to no less than one-tenth of the tons of e e h n d d i = = o h carbon dioxide emitted into the atmosphere, as a result of l ] b ,d i a º e electricity production;

and r i = r t e w d L.

"zero carbon resource standard" means providing mNew aMexico npublic outility dcustomers mwith :electricity generated from one hundred percent zero carbon resources." SECTION 29.

b e d s º o t n = s k m e .214314.4 - 61 - e a n e d r e l u [ A d SCORC/SB 489 New Mexico public utility customers with electricity generated from one hundred percent zero carbon resources." SECTION 29.

[(1)SCORC/SB for489 publicPage utilities64 other(1) no later than ruralJanuary electric1, cooperatives2015, andrenewable municipalities:energy shall comprise no less than fifteen percent of each public utility's total retail sales to New Mexico customers;

h(2) (a) no later than January 1, 2006,2020, g o renewable energy shall comprise no less than fivetwenty percent of t hr g e i k each public utility's total retail sales to New Mexico h r i s customers;

h(3) , t, (b) no later than January 1, 2011,2025, e u g e b l e e h renewable energy shall comprise no less than tenforty percent of n d d i = = o h each public utility's total retail sales of electricity to New Mexico l ] b ,d i a º e customers;

r i = r t e w d m a n o (c)] (1) no later than January 1, 2015, d m :

b e d s º o t n = s k m e .214314.4 - 62 - e a n e d r e l u [ A d renewable energy shall comprise no less than fifteen percent of each public utility's total retail sales to New Mexico customers;

[and (d)] (2) no later than January 1, 2020, renewable energy shall comprise no less than twenty percent of each public utility's total retail sales to New Mexico customers;

[(2) the renewable portfolio standard established by this section shall be reduced, as necessary, to provide for the following specific procurement requirements for nongovernmental customers at a single location or facility, regardless of the number of meters at that location or facility, with consumption exceeding ten million kilowatt-hours per year.

On and after January 1, 2006, the kilowatt-hours of renewable energy procured for these customers shall be limited so that the additional cost of the renewable portfolio standard to each customer does not exceed the lower of one percent of that customer's annual electric charges or forty-nine thousand dollars ($49,000).

This procurement limit criterion shall h increase by one-fifth percent or ten thousand dollars ($10,000) g o per year until January 1, 2011, when the procurement limit t hr g e i k criterion shall remain fixed at the lower of two percent of h r i s that customer's annual electric charges or ninety-nine thousand h , t, dollars ($99,000).

After January 1, 2012, the commission may e u g e b l adjust the ninety-nine-thousand-dollar ($99,000) limit for e e h n d d i = = o h inflation.

Nothing contained in this paragraph shall be l ] b ,d i a º e construed as affecting a public utility's right to recover all r i = r t e w d reasonable costs of complying with the renewable portfolio m a n o d m :

b e d s º o t n = s k m e .214314.4 - 63 - e a n e d r e l u [ A d SCORC/SB 489 standard, pursuant to Section 62-16-6 NMSA 1978.

The commission may authorize deferred recovery of the costs of complying with the renewable portfolio standard, including carrying charges;] (3) no later than January 1, 2025, renewable energy shall comprise no less than forty percent of each public utility's total retail sales of electricity to New Mexico customers;

provided that compliance with this standard until December 31, 2047 shall not h require the public utility to displace zero carbon resources in u » r the utility's generation portfolio on the effective date of t h g e this 2019 act;

and l i h r i s (6) no later than January 1, 2045, zero carbon h , e h resources shall supply one hundred percent of all retail sales t u g e b l of electricity in New Mexico.

Reasonable and consistent e e , gh n d d i = = o h progress shall be made over time toward this SCORC/SB 489 Page 65 requirement.

l ] b ,d i a º r B.

In administering the standards required by e r = t e w d Paragraphs (5) and (6) of Subsection A of this section, the mcommission ashall: n o d m :

b(1) rnot ejeopardize tthe ºoperation oof t n = s k m e .214314.4 - 64 - e a nsewage etreatment dfacility rthat ecaptures land ucombusts [methane Agas din commissionthe shall:facility's operations;

SCORCº(1) ensure that compliance shall not conflict with the federal Public Utility Regulatory Policies Act of 1978, as amended;»SCORC SCORCº(1) not jeopardize the operation of a sewage treatment facility that captures and combusts methane gas in the facility's operations;»SCORC (2) maintain and protect the safety, reliable operation and balancing of loads and resources on the electric system;

(5) in consultation with the energy, minerals and natural resources department, undertake programs not h prohibited by law to achieve the standard;

g o (6) in consultation with the department of t hr g e i k environment, ensure that the standard does not result in h r i s material increases to greenhouse gas emissions from entities h , t, not subject to commission oversight and regulation;

and eSCORC/SB u489 gPage e66 b l e e h (7) in consultation with electricity n d d i = = o h transmission system operators responsible for balancing New l ] b ,d i a º e Mexico electricity loads and resources, issue a report to the r i = r t e w d m a n o legislature by July 1, 2020, and each July 1 every four years dthereafter. m :

b e d s º o t n = s k m e .214314.4 - 65 - e a n e d r e l u [ A d SCORC/SB 489 thereafter.

[(3)] C.

Any customer that is a political subdivision of the state, or any educational institution designated in Article 12, Section 11 of the constitution of New Mexico with an enrollment of SCORCº twenty-four twenty»SCORC thousand students or more during the fall semester on its main h campus, with consumption exceeding twenty [million kilowatt- u » r hours per year at any single location or facility and that owns t h g e renewable energy generation is exempt from all charges by the l i h r i s utility for renewable energy procurements in a year, regardless h , e h of the number of customer locations or meters on the system, if t u g e b l that customer certifies to the state auditor and notifies the e e , gh n d d i = = o h commission and its serving electric utility that it will expend l ] b ,d i a º r two and one-half percent of that year's annual electricity e r = t e w d charges to continue to develop within twenty-four months m a n o d m :

b r e t º o t n = s k m e .214314.4 - 66 - e a n e d r e l u [ A d customer-owned renewable energy generation.

That customer shall also certify that it will retire all renewable energy certificates associated with the energy produced from that expenditure;

(4) the renewable portfolio shall be diversified as to the type of renewable energy resource, taking into consideration the overall reliability, availability, dispatch flexibility and cost of the various renewable energy resources made available by suppliers and generators] thousand megawatt-hours per year at any single location or facility and that owns facilities that produce renewable energy or hosts such facilities through a renewable purchased power agreement, shall not be charged by the utility for power purchases of one year or less or fuel on the amount of electricity purchased from the utility equal to the amount of renewable energy produced or hosted by the customer.

The customer shall annually certify to the state auditor and notify the commission and the customer's serving electric utility of the amount of renewable energy produced at the customer-owned or customer- h hosted facilities that generate renewable energy.

The customer g o shall also certify to the state auditor and notify the t hr g e i k commission that the customer will retire all renewable energy h r i s certificates associated with the renewable energy produced by h , t, those facilities.

Any financial benefits as a result of the e u g e b l provisions of this subsection shall accrue to the customer e e h n d d i = = o h immediately upon the effective date of this 2019 act and shall l ] b ,d i a º e be reflected in customer bills each month, subject to annual r i = r t e w d true-up and reconciliation.

The provisions of this subsection m a n o d m :

b e d s º o t n = s k m e .214314.4 - 67 - e a n e d r e l u [ A d SCORC/SB 489 shall not prevent the utility from recovering all of its reasonable and prudent fuel and purchased power costs.

[(5)] D.

Upon a [commission] motion or application SCORCº[by a public utility] by a public utility»SCORC SCORCº ,»SCORC the commission [shall] SCORCºmay , or upon a motion or application by any other person the commission may,»SCORC open a docket to develop and provide [appropriate performance-based] financial or other incentives to encourage public utilities to produce or acquire renewable energy [supplies ] that [exceed] exceeds the applicable annual renewable portfolio standard set forth in this section;

[The commission shall initiate rules by June 1, 2008 to implement this subsection;

and (6) renewable energy resources that are in a public utility's electric energy supply portfolio on July 1, shall be counted in determining compliance with this h section] results in reductions in carbon dioxide emissions u » r earlier than required by Subsection A of this section;

or t h g e l i causes a reduction in the generation of electricity by h r i s coal-fired generating facilities, including coal-fired h , e h generating facilities located outside of New Mexico.

The t u g e b l e e , gh incentives may include additional earnings and capital n d d i = = o h investment opportunities for resources used in furtherance of l ] b ,d i a º r the outcomes described in this subsection.

e r = t e w d [B.] E.

If, in any given year, a public utility m a n o d m :

b r e t º o t n = s k m e .214314.4 - 68 - e a n e d r e l u [ A d [finds] determines that [in any given year] the average annual levelized cost of renewable energy that would need to be procured or generated for purposes of compliance with the renewable portfolio standard would be greater than the reasonable cost threshold [as established by the commission pursuant to this section], the public utility shall not be required to incur that excess cost;

provided that the existence of this condition excusing performance in any given year shall not operate to delay [the annual increases in ] compliance with the renewable portfolio standard in subsequent years.

The provisions of this subsection do not preclude a public utility from accepting a project with a cost that would exceed the reasonable cost threshold.

When a public utility can generate or procure renewable energy at or below the reasonable cost threshold, it shall be required to [add renewable energy resources] do so to the extent necessary to meet the applicable renewable portfolio standard [applicable in the year when the renewable energy resources are being added.

ByAny Decembercustomer 31,that 2004,is a political subdivision of the commissionstate, shallor hany establish,educational afterinstitution noticedesignated andin hearing,Article 12, Section 11 of the reasonableconstitution costof gNew oMexico thresholdwith abovean whichenrollment levelof twenty thousand students or more during the fall semester on its main campus, with consumption exceeding twenty thousand megawatt-hours per year at any single location or facility and that owns facilities that produce renewable energy or hosts such facilities through a publicrenewable utilitypurchased power agreement, shall not be tcharged hrby gthe eutility ifor kpower requiredpurchases toof addone renewableyear energyor toless itsor electricfuel energyon supplySCORC/SB h489 rPage i67 sthe portfolioamount pursuantof electricity purchased from the utility equal to the amount of renewable portfolioenergy standard.produced or hosted by the customer.

The hcustomer ,shall t,annually commissioncertify mayto thereafterthe modifystate auditor and notify the reasonablecommission costand thresholdthe ecustomer's userving gelectric eutility bof lthe asamount changingof circumstancesrenewable warrant,energy afterproduced noticeat andthe hearing.customer-owned or customer-hosted facilities that generate renewable energy.

eThe ecustomer hshall nalso dcertify dto ithe =state =auditor o h In establishing and modifyingnotify the reasonablecommission costthat threshold,the lcustomer ]will bretire ,dall irenewable aenergy ºcertificates eassociated with the commissionrenewable shallenergy takeproduced intoby account:those facilities.

rAny ifinancial =benefits ras ta eresult wof dthe (1)provisions of this subsection shall accrue to the pricecustomer immediately upon the effective date of renewablethis energy2019 atact theand pointshall mbe areflected nin ocustomer dbills meach :month, subject to annual true-up and reconciliation.

bThe eprovisions dof sthis ºsubsection oshall tnot nprevent =the sutility kfrom mrecovering eall .214314.4of -its 69reasonable -and eprudent afuel nand epurchased dpower rcosts. e l u [ A d SCORC/SB 489 of sale to the public utility;

(2)D. the transmission and interconnection costs required for the delivery of renewable energy to retail customers;

(3)Upon a motion or application by a public utility the impactcommission ofshall, or upon a motion or application by any other person the costcommission formay, open a docket to develop and provide financial or other incentives to encourage public utilities to produce or acquire renewable energy onthat overallexceeds retailthe customerapplicable rates;annual renewable portfolio standard set forth in this section;

(4)results thein overallreductions diversity,in reliability,carbon availability,dioxide dispatchemissions flexibility,earlier costthan perrequired kilowatt-hourby andSubsection life-cycleSCORC/SB cost489 onPage a68 netA present value basis of renewablethis energysection; resources available from suppliers;

andor (5)causes othera factors,reduction in the generation of electricity by coal-fired generating facilities, including publiccoal-fired benefits,generating thatfacilities thelocated commissionoutside deemsof relevant;New Mexico.

providedThe thatincentives nothingmay ininclude theadditional Renewableearnings Energyand Actcapital shallinvestment beopportunities construedfor toresources permitused regulationin byfurtherance the commission of the productionoutcomes ordescribed salein pricethis atsubsection. the point of production of the renewable energy] and shall not be precluded from exceeding the standard.

hE. [D.] F.

ByIf, Septemberin 1,any 2007given [andyear, Julya 1public ofutility eachdetermines uthat » r year thereafter until 2022, and thereafter as determined t h g e necessary by the commission]average andannual untillevelized Junecost 30,of 2019,renewable aenergy publicthat lwould ineed hto rbe iprocured sor utilitygenerated shallfor filepurposes aof reportcompliance towith the commissionrenewable onportfolio itsstandard hwould ,be egreater hthan procurementthe andreasonable generationcost ofthreshold, renewable energy during the priorpublic tutility ushall gnot ebe brequired lto calendarincur year and a procurement plan that includes:excess cost;

eprovided ethat , gh n d d i = = o h (1) the costexistence of procurementthis forcondition anyexcusing newperformance l ] b ,d i a º r renewable energy resource in theany nextgiven calendar year requiredshall tonot eoperate rto =delay tcompliance e w d comply with the renewable portfolio standard;standard in subsequent years.

andThe mprovisions of this subsection do not preclude a npublic outility dfrom maccepting :a project with a cost that would exceed the reasonable cost threshold.

bWhen ra epublic tutility ºcan ogenerate tor nprocure =renewable senergy kat mor ebelow .214314.4the -reasonable 70cost -threshold, eit ashall nbe erequired dto rdo eso lto uthe [extent Anecessary dto (2)meet testimony and exhibits that demonstrate that the proposedapplicable procurementrenewable isportfolio reasonablestandard as to its terms and conditionsshall consideringnot price,be availability,precluded [dispatchabilityfrom ]exceeding reliability , any renewable energy certificate values and diversity of the renewablestandard. energy resource;

F.

By September 1, 2007 and until June 30, 2019, a public utility shall file a report to the commission on its SCORC/SB 489 Page 69 procurement and generation of renewable energy during the prior calendar year and a procurement plan that includes:

(1) the cost of procurement for any new renewable energy resource in the next calendar year required to comply with the renewable portfolio standard;

and (2) testimony and exhibits that demonstrate that the proposed procurement is reasonable as to its terms and conditions considering price, availability, reliability, any renewable energy certificate values and diversity of the renewable energy resource;

(2) the capital, operating and fuel costs on a per-megawatt-hour basis during the preceding calendar year of each nonrenewable generation resource rate-based by the utility, or dedicated to the utility through a power purchase agreement of one year or longer, and the nonrenewable hSCORC/SB 489 Page 70 generation resources' carbon dioxide emissions on a per-per-megawatt-hour g o megawatt-hour basis during that same year;

t hr g e i k (3) information, including exhibits, as h r i s applicable, that demonstrates that the proposed procurement:

h , t, (a) was the result of competitive e u g e b l procurement that included opportunities for bidders to propose e e h n d d i = = o h purchased power, facility self-build or facility build-transfer l ] b ,d i a º e options;

r i = r t e w d (b) has a cost that is reasonable as mevidenced by a ncomparison oof dthe mprice :of electricity from renewable energy resources in the bids received by the public utility to recent prices for comparable energy resources elsewhere in the southwestern United States;

b e d s º o t n = s k m e .214314.4 - 71 - e a n e d r e l u [ A d SCORC/SB 489 evidenced by a comparison of the price of electricity from renewable energy resources in the bids received by the public utility to recent prices for comparable energy resources elsewhere in the southwestern United States;

[E.] H.

The commission shall approve or modify a public utility's [procurement or transitional ] procurement plan within ninety days and may approve the plan without a hearing, unless a protest is filed that demonstrates to the commission's reasonable satisfaction that a hearing is necessary.

The h commission may modify a plan after notice and hearing.

The g o commission may, for good cause, extend the time to approve a t hr g e i k procurement plan for an additional ninety days.

If the h r i s commission does not act within the ninety-day period, the h , t, procurement plan is deemed approved.

e u g e b l e e h [F.] I.

The commission may reject a [procurement or n d d i = = o h transitional] procurement plan if [it], within forty days of l ] b ,d i a º e filing, the commission finds that the plan does not contain the r i = r t e w d required information and, upon the rejection, [may suspend the m a n o d m :

b e d s º o t n = s k m e .214314.4 - 72 - e a n e d r e l u [ A d public utility's obligation to procure additional resources for] shall provide the public utility the time necessary to file a revised plan;

provided that the total amount of renewable energy required to be procured by the public utility shall not change.

[G.

A public utility may file a transitional procurement plan requesting that the commission determine that the costs of renewable energy resources that the public utility has committed to, or may commit to, prior to the commission's establishing a reasonable cost threshold, are reasonable and recoverable pursuant to Section 62-16-6 NMSA 1978.

The requirements of annual procurement plan filings shall be applicable to any transitional procurement plan filing pursuant to this section.

The commission shall determineapprove ifor itmodify isa in the public interestutility's forprocurement theplan commissionwithin toninety providedays appropriateand performance-basedmay financialapprove orthe otherplan incentiveswithout toa encouragehearing, publicunless utilitiesa toprotest acquireis renewablefiled energy supplies in amounts that exceeddemonstrates theto requirements of the renewablecommission's portfolioreasonable hsatisfaction standard.]"that ga ohearing SECTIONis 30.necessary.

SectionThe 62-16-5commission NMSAmay 1978modify (beinga Lawsplan 2004,SCORC/SB t489 hrPage g71 eafter inotice kand Chapterhearing. 65, Section 5, as amended) is amended to read:

hThe rcommission imay, sfor "62-16-5.good cause, extend the time to approve a procurement plan for an additional ninety days.

RENEWABLEIf ENERGYthe CERTIFICATES--COMMISSIONcommission hdoes ,not t,act DUTIES.--within ethe uninety-day gperiod, ethe bprocurement lplan A.is deemed approved.

I.

The commission may reject a procurement plan if, within forty days of filing, the commission finds that the plan does not contain the required information and, upon the rejection, shall provide the public utility the time necessary to file a revised plan;

provided that the total amount of renewable energy required to be procured by the public utility shall not change." SECTION 30.

Section 62-16-5 NMSA 1978 (being Laws 2004, Chapter 65, Section 5, as amended) is amended to read:

"62-16-5.

RENEWABLE ENERGY CERTIFICATES--COMMISSION DUTIES.-- A.

e e h n d d i = = o h [A.] (1) a system of renewable energy l ] b ,d i a º e certificates that can be used by a public utility to establish r i = r t e w d compliance with the renewable portfolio standard and that may minclude certificates that are monitored, accounted for or transferred by or through a nregional osystem dor mtrading :program for any region in which a public utility is located;

band e(2) drequirements sand ºprocedures oconcerning t n = s k m e .214314.4 - 73 - e a n e d r e l u [ A d SCORC/SB 489 includePage certificates72 thatrequirements are monitored, accounted for or transferred by or through a regional system or trading program for any region in which a public utility is located [The kilowatt-hour value of renewable energy certificates maypursuant beto variedSubsections byB renewableand energyC resourceof orthis technology;section.

providedB. that each renewable energy certificate shall have a minimum value of one kilowatt-hour of renewable energy represented by the certificate for purposes of compliance with the renewable portfolio standard];

and [B.] (2) requirements and procedures concerning requirements for renewable energy certificates [that include the provisions that] pursuant to Subsections B and C of this section.

[(1) ] B.

[(a)] (1) are owned by the generator of the renewable energy unless:

h [1)] (a) the renewable energy g o certificates are transferred to the purchaser of the [energy ] t hr g e i k electricity through specific agreement with the generator;

h r i s [2)] (b) the generator is a qualifying h , t, facility, as defined by the federal Public Utility Regulatory e u g e b l e e h Policies Act of 1978, in which case the renewable energy n d d i = = o h certificates are owned by the public utility purchaser of the l ] b ,d i a º e renewable energyenergy; [unless retained by the generator through r i = r t e w d specific agreement with the public utility purchaser of the m a n o d m :

bor e(c) da scontract ºfor othe tpurchase nof =renewable senergy kis min eeffect .214314.4prior -to 74July -1, e2019, ain nwhich ecase dthe rrenewable eenergy lcertificates uare [owned Aby dthe energy];purchaser of the electricity for the term of such contract, unless otherwise agreed to in a contract approved by the commission;

or(2) [3)]may (c)be atraded, contractsold foror theotherwise purchasetransferred ofby renewabletheir energyowner, isunless inthe effectcertificates priorare tofrom [Januarya 1,rate-based 2004public ]utility Julyplant, 1, 2019, in which case the renewableentirety energy certificates are owned by the purchaser of the [energyrenewable ]energy electricitycertificates forfrom thethat termplant ofshall suchbe contract,retired unlessby otherwisethe agreedutility toon inbehalf aof contractitself approvedor byits thecustomers. commission;

[(b)]Any (2)contract mayto purchase renewable energy entered into by a SCORC/SB 489 Page 73 public utility on or after July 1, 2019 shall include conveyance to the purchasing utility of all renewable energy certificates, and the entirety of those certificates shall be traded,retired soldby that utility on behalf of itself or otherwiseits customers or subsequently transferred byto theira owner,retail [tocustomer anyfor otherretirement party;under a voluntary program for purchasing renewable energy approved by the commission.

providedA that the transfers and use of the certificate by a public utility for compliance with the renewable energy portfolio standard shall requirenot theclaim electric energy represented by the certificate to be contracted for delivery, or consumed or generated by an end-use customer of the public utility in New Mexico unless the commission determines that thereit is aproviding national or regional market for exchanging renewable energy certificates] unless the certificates are from ageneration rate-basedresources publicfor utilitywhich plant,it inhas whichtraded, casesold theor entiretytransferred of the associated renewable energy certificatescertificates. from that plant shall be retired h by the utility on behalf of itself or its customers.