New Mexico Act Requires Utilities to Save Energy

March 05, 2008

New Mexico Governor Bill Richardson signed a bill on February 27 that requires the state's electric and natural gas utilities to provide their customers with cost-effective energy efficiency resources. By 2014, the state's electric utilities must achieve energy efficiency gains equal to 5% of their total sales in 2005, increasing to 10% of their 2005 sales by 2020. The utilities could achieve these gains through such efforts as a rebate program for energy efficient appliances, home weatherization programs, or programs to give away or discount compact fluorescent light bulbs.

To help the utilities meet their goals, the New Mexico Public Regulation Commission must identify and remove disincentives and barriers to such energy efficiency programs, including one key item: the commission must provide public utilities an opportunity to earn a profit on their energy efficiency programs. In fact, when such programs perform satisfactorily, the commission must provide a profit that "is financially more attractive than supply-side resources." The new act allows utilities to recover their costs and any commission-approved incentives through either an increase in base rates or a special fee added to utility bills. The act also provides a mechanism for utilities to fall short of their goals, requiring them to justify the shortfall, to set new goals, and to gain commission approval for lowering the goals. See the governor's press release (PDF 49 KB) and the full text of the energy act (PDF 48 KB). Download Adobe Reader.