New Mexico Register / Volume
XXXIV, Issue 15 / August 15, 2023
This is an emergency amendment to 17.9.551
NMAC, Section 2, 3, 7, 8, 10, and 11, effective 8/15/2023.
17.9.551.2 SCOPE: This rule applies to the investor owned electric
[utility] utilities operating within New Mexico that are subject
to the jurisdiction of the New Mexico public regulation commission and to purchased
power agreements entered into after the [the] effective
date of this rule. This rule shall not supersede or modify requirements pertaining
to an electric utility’s purchased power agreements with its affiliates as set by
New Mexico public regulation commission orders.
[17.9.551.2 NMAC - N, 7/31/2012; A/E, 8/15/2023]
17.9.551.3 STATUTORY AUTHORITY: Public Regulation Commission Act, [Sections
8-8-1 et. seq. NMSA 1978,] Section 62-19-9 NMSA 1978, Public Utility
Act, Sections 62-3-1, 62-6-4, and 62-6-19 NMSA 1978.
[17.9.551.3 NMAC - N, 7/31/2012; A/E, 8/15/2023]
17.9.551.7 DEFINITIONS:
A. “Capacity cost” means a charge separately
identified and incurred under a purchased power agreement for capacity or the reservation
of capacity.
B. “Commission” means the New Mexico public
regulation commission.
C. “Electric utility” means an entity certified
by the commission to provide retail electric service in New Mexico pursuant to the
Public Utility Act Sections 62-13-1, et seq. NMSA 1978, but does not include rural
electric cooperatives.
D. “Fixed cost” means a charge separately identified
and incurred under a purchased power agreement that does not vary with changes in
amount used, volume consumed, or units purchased. A fixed cost includes, but is not limited to,
administrative fees, accounting fees, facilitation fees, minimum payment amounts,
and similar charges.
E. “Long term purchased power agreement” or
“LTPPA” means a purchased power agreement
with a term of five [(5)] years or more and for which an electric utility
seeks or intends to seek rate recovery from its New Mexico retail customers. The term shall be inclusive of the base term and
any automatic or option extensions.
F. “Purchased power agreement” means [a]
an agreement for the purchase of energy or capacity, or both, by an electric
utility with a term of any length and for which an electric utility seeks or intends
to seek rate recovery from its New Mexico retail customers, but does not include
agreements to purchase renewable energy subject to commission review and approval
under the Renewable Energy Act Sections 62-16-1, et seq. NMSA 1978, or agreements
to purchase energy or capacity from a qualifying facility pursuant to Section 17.9.570
NMAC.
[17.9.551.7 NMAC - N,
7/31/2012; A/E, 8/15/2023]
17.9.551.8 GENERAL REQUIREMENTS FOR FILING AN APPLICATION
FOR APPROVAL OF A LONG-TERM PURCHASED POWER AGREEMENT:
A. No
electric utility shall become irrevocably obligated under an LTPPA without
first obtaining the commission’s written approval of the agreement.
B. An
electric utility shall file at the commission within [thirty (30)] 30
days after the execution of a LTPPA an application for the commission’s review
and approval of the LTPPA. [The
proceeding to consider the application shall be a proceeding concerning a
utility’s resource acquisition under Subsection B of 17.7.3.12 NMAC.]
C. Copies
of the application shall be served on commission staff, the New Mexico attorney
general and parties in the electric utility’s most recent general [electric]
rate case, in accordance with Subsection C of 1.2.2.10 NMAC.
D. An
application for commission review and approval of an LTPPA shall be accompanied
by supporting testimony and exhibits that provide:
(1) a copy of the LTPPA; [and]
(2) an explanation of the key terms and
conditions of the LTPPA containing:
(a) the term of the LTPPA including any
options to extend the agreement;
(b) the size in MW of
capacity and the amount of energy in MWh or kWh per month and any
conditions regarding the minimum or maximum amount of energy or capacity made
available or required to be purchased;
(c) the price or pricing formula under
which the electric utility will pay for the power and energy contracted for,
including identification of when charges begin to be incurred, any price
reopeners and any price escalation provisions;
(d) obligations by the electric utility
to pay for any fixed or variable administrative, transactional, or operation
and maintenance costs incurred through the operation of the generation
facility, including start-up costs, taxes, insurance, environmental or
reclamation-related costs, fuel costs, and any other costs that the electric
utility may incur; and
(e) provisions relating to
non-performance by the counter-party and the remedies
provided;
(3) a description of transmission costs
the electric utility will incur or pay to receive the purchased power,
which may include the costs of third-party transmission wheeling, or
construction of transmission to facilitate purchases under the LTPPA or both;
(4) an explanation of how the electric
utility proposes to recover from ratepayers the costs incurred and an estimate
of the effect on rates to customers;
(5) a general description of:
(a) the generating facility or facilities
that will generate the purchased power; or
(b) if the power is to be generated from
one or more specific generating units to be constructed outside New Mexico, a
description of the anticipated siting of the generating unit, expected
construction time, and the expected commercial operation date; and
(c) if the power is to be generated from
one or more specific generating units to be constructed within New Mexico, a
description of:
(i) the
approvals required to construct and operate the generating unit, including air
quality and other environmental permits;
(ii) the expected construction time;
(iii) the expected commercial operation date;
(iv) the fuel type and supply sources; and
(v) other provisions addressing the
electric utility’s ownership options for the generating unit during or after
the term of the agreement;
(6) evidence that entering
into the LTPPA is consistent with the provision of safe and reliable
electric utility service at the lowest reasonable cost, considering both short
and long-term costs and all other relevant factors;
(7) evidence of the LTPPA’s impact on the
electric utility’s financial condition and financial metrics;
(8) evidence that the LTPPA is consistent
with the electric utility’s most recent commission-accepted integrated resource
plan unless [as described in Section 17.7.3.10 NMAC,] material changes
that would warrant a different course of action by the electric utility have
occurred, in which case, the testimony shall include justification for
deviation from the integrated resource plan;
(9) evidence addressing whether a
utility-owned generation resource could have been constructed as an alternative
to the LTPPA with greater benefit to ratepayers;
(10) evidence addressing the methodology and
criteria by which the purchased power agreement was selected; and
(11) any other information or evidence that
the electric utility believes will assist the commission in its review of the
LTPPA.
E. The
electric utility may, as set forth in Subsection D of 17.9.551.8 NMAC, submit
any portion of its application and supporting documentation under seal, to the
extent that the electric utility deems the specific information to be
confidential. The electric utility shall seek a protective order
under Subsection B of 1.2.2.8 NMAC for the information it considers
confidential.
[17.9.551.8 NMAC -
N, 7/31/2012; A/E, 8/15/2023]
17.9.551.10 PROCESS
FOR APPROVAL OF A LONG-TERM PURCHASED POWER AGREEMENT:
A. The commission may
approve an application for approval of an LTPPA without a formal hearing if no protest
is filed within [sixty (60)] 60 days after the date that notice is
given pursuant to a commission order.
B. The commission shall
issue its final order acting on the application within six [(6)] months after
the date the application was filed. A final
order denying an application shall be without prejudice. The electric utility may re-file a previously
denied application at any time after that denial. If the commission does not issue its final order
within six [(6)] months after the date that the application was filed by
the electric utility, the application shall be deemed to be approved.
[17.9.551.10 NMAC -
N, 7/31/2012; A/E, 8/15/2023]
17.9.551.11 INFORMATIONAL
FILING REQUIREMENTS FOR A PURCHASED POWER AGREEMENT WITH A TERM OF TWO [(2)]
YEARS OR MORE BUT LESS THAN FIVE [(5)] YEARS:
A. An
electric utility may, but is not required to, request approval or request ratemaking
treatment other than as provided in Subsection A of 17.9.551.9 NMAC, for a purchased
power agreement with a term of two [(2)] years or more but less than five
[(5)] years, by filing the same type of application applicable to a LTPPA.
The provisions in 17.9.551.10 NMAC shall apply to an application regarding a purchased
power agreement with a term of two [(2)] years or more but less than five
[(5)] years.
B. An electric utility
entering into a purchased power agreement with a term of two [(2)] years
or more but less than five [(5)] years for which the utility intends to seek
rate recovery either in base rates or its fuel and purchased power cost adjustment
clause, shall file with the commission a notice of purchased power agreement within
[thirty (30)] 30 days of execution.
C. A
notice of purchased power agreement shall include a copy of the agreement and:
(1) an
explanation of the key terms and conditions of the agreement, including:
(a) its term;
(b) its size in MW of
capacity and any conditions regarding the minimum or maximum amount of energy or
capacity made available or required to be purchased;
(c) the price or pricing
formula, including any escalation provisions, and, if applicable, any obligations
of the utility to pay for any fixed or variable operation and maintenance costs
incurred through the operation of any generation facility providing service under
the agreement, including start-up costs, taxes, insurance, environmental or reclamation-related
costs and fuel costs; and
(d) any other costs for
which the public utility is obligated;
(2) a
description of transmission costs the utility will incur or pay to receive the purchased
power and any impact on the transmission system of the agreement, including any
needed construction of transmission facilities to facilitate purchases under the
agreement;
(3) an
explanation of how the utility intends to recover costs incurred under the agreement
from ratepayers;
(4) an
explanation of the impact of the agreement on the electric utility’s financial condition
or financial metrics;
(5) an
explanation of how entering into the agreement is consistent with the provision
of safe and reliable electric utility service at the lowest reasonable cost, considering
both short- and long-term costs and all other relevant factors;
(6) an
explanation of whether the agreement will result in the deferment or delay of any
capacity addition by the public utility, and whether the agreement is consistent
with the utility’s most recent commission-accepted integrated resource plan;
(7) evidence
addressing the methodology and criteria by which the purchased power agreement was
selected; and
(8) any
information that the electric utility believes will assist the commission in its
review of the agreement.
[17.9.551.11 NMAC - N, 7/31/2012; A/E, 8/15/2023]