A. The commission may approve or otherwise allow to become effective, as provided in Subsection B of this section, applications from utilities or persons subject to regulation pursuant to Subsection B of Section 62-6-4 NMSA 1978 or filings by cooperative utilities pursuant to Section 62-8-7 NMSA 1978, as appropriate, for special rates or tariffs in order to prevent the loss of customers, to encourage customers to expand present facilities and operations in New Mexico and to attract new customers where necessary or appropriate to promote economic development in New Mexico. Any such special rates or tariffs shall be designed so as to recover at least the incremental cost of providing service to such customers.

B. The commission may approve or otherwise allow to become effective applications from utilities or persons subject to regulation pursuant to Subsection B of Section 62-6-4 NMSA 1978 and filings by cooperative utilities pursuant to Section 62-8-7 NMSA 1978 for economic development rates and rates designed to retain load for gas and electric utility customers. For purposes of this section and Section 62-8-6 NMSA 1978, economic development rates and rates designed to retain load are rates set at a level lower than the corresponding service rate for which a customer would otherwise qualify.

C. Except as provided in Subsection D of this section, economic development rates shall be approved or otherwise allowed to become effective for an electric utility or persons subject to regulation pursuant to Subsection B of Section 62-6-4 NMSA 1978 or filings by cooperative utilities pursuant to Section 62-8-7 NMSA 1978 only when the utility or the substantially full requirements supplier of the utility has excess capacity. For purposes of this section, "excess capacity" means the amount of electric generating and purchased power capacity available to the utility or such supplier that is greater than the utility's or such supplier's peak load plus a fixed percentage reserve margin set by the commission.

D. Economic development rates may be approved or otherwise allowed to become effective for electric utilities or persons subject to regulation pursuant to Subsection B of Section 62-6-4 NMSA 1978 or filings by cooperative utilities pursuant to Section 62-8-7 NMSA 1978 that do not meet the qualifications of Subsection C of this section; provided that the following conditions are met:

(1) economic development rates approved under this subsection shall not be lower than the incremental cost of providing service to the economic development rate customer as determined by the commission. As used in this subsection, "economic development rate customer" means a customer that directly benefits from the economic development rate established pursuant to this subsection; and

(2) an economic development rate approved for any customer under this subsection shall last no longer than four years, except that the commission may approve the rate for up to twelve additional months if it finds that the additional period is necessary to attract a particular economic development rate customer to New Mexico.

E. For purposes of this section, "incremental cost" at a minimum shall include all additional costs incurred to serve the economic development rate customer that would not otherwise have been incurred to serve other customers, fuel and purchased power costs, costs recoverable from customers pursuant to the Renewable Energy Act and the Efficient Use of Energy Act and the direct costs of facilities necessary to provide service to the customer. The commission shall not impute to the electric utility revenues that would have been received from the economic development rate or load retention customer if they had been provided service under the corresponding rate for which they would have otherwise qualified.

History: Laws 1989, ch. 5, § 1; 1993, ch. 282, § 31; 2015, ch. 72, § 1.

Compiler's notes. — Sections 62-6-4 to 62-6-26.1 of the Public Utility Act are still effective as the repeal of Chapter 62, Article 6 by Laws 1998, Chapter 108, Section 82, effective July 1, 2003 Chapter 108, Section 82 was repealed prior to taking effect by Chapter 23, Section 1, Laws 2003. Although Laws 2003, Chapter 336, Section 8, amended Laws 1998, Chapter 82, as amended, an amendment of a repealed section is ineffective. See Quintana v. N.M. Dep't of Corrs., 100 N.M. 224, 668 P.2d 1101 (1983). Laws 2003, Chapter 416, Section 5 also repealed Laws 1998, Chapter 108, Section 82, as amended, a second time, however, that repeal is of no effect as the section had previously been repealed by Chapter 23, Section 1, Laws 2003.

The 2015 amendment, effective June 19, 2015, amended the Public Utility Act to provide for economic development rates no lower than the incremental cost of providing service; in Subsection A, after "utilities pursuant to", deleted "Subsection F of"; in Subsection B, after "utilities pursuant to", deleted "Subsection F of"; in Subsection C, added "Except as provided in Subsection D of this section", and after "utilities pursuant to", deleted "Subsection F of"; and added Subsections D and E.

The 1993 amendment, effective June 18, 1993, substituted "The commission" for "The New Mexico public service commission" at the beginning of Subsections A and B; and, in Subsection C, in the second sentence, deleted "and Section 62-8-6 NMSA 1978" preceding "'excess capacity'", substituted "the commission" for "the New Mexico public service commission", and made a stylistic change.