The New Mexico Legislature passed a bill opening the state’sretail electric power market to competing suppliers beginning in2001. The bill, passed unanimously by the state House ofRepresentatives late Friday night, now goes to Gov. Gary Johnson,who has 20 days to sign it into law.

Under the terms of the bill, schools, residential consumers andsmall business customers will have a choice of power supplierbeginning Jan. 1, 2001. Competition is to be expanded to all othercustomers Jan. 1, 2002. Residential customers who do not select apower supplier will continue to receive service under acompetitively-priced standard offer approved by the state PublicRegulation Commission (PRC).

Transmission and distribution services, together with suchrelated services as meter-reading and billing, are to remainsubject to PRC regulation.

Over a five-year transition period, utilities will be allowed torecover at least half their stranded costs. Utilities could recoverup to 100% of those costs with the approval of the PRC. The billalso allows utilities to recover in full any costs incurred inimplementing the change to a competitive market.

The bill contains strong provisions to guard against incumbentutilities using their market position to favor or subsidize theirown power generation resources. While utilities are not required todivest any part of their business, they would be required toseparate those businesses from their regulated activities intransmission and distribution.

The bill requires utilities operating in the state to submit atransition plan to the PRC no later than March 1, 2000, to beapproved no later than Dec. 1, 2000.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.