New Mexico Opening to Electric Competition
The New Mexico Legislature passed a bill opening the state's
retail electric power market to competing suppliers beginning in
2001. The bill, passed unanimously by the state House of
Representatives 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 and
small business customers will have a choice of power supplier
beginning Jan. 1, 2001. Competition is to be expanded to all other
customers Jan. 1, 2002. Residential customers who do not select a
power supplier will continue to receive service under a
competitively-priced standard offer approved by the state Public
Regulation Commission (PRC).
Transmission and distribution services, together with such
related services as meter-reading and billing, are to remain
subject to PRC regulation.
Over a five-year transition period, utilities will be allowed to
recover at least half their stranded costs. Utilities could recover
up to 100% of those costs with the approval of the PRC. The bill
also allows utilities to recover in full any costs incurred in
implementing the change to a competitive market.
The bill contains strong provisions to guard against incumbent
utilities using their market position to favor or subsidize their
own power generation resources. While utilities are not required to
divest any part of their business, they would be required to
separate those businesses from their regulated activities in
transmission and distribution.
The bill requires utilities operating in the state to submit a
transition plan to the PRC no later than March 1, 2000, to be
approved no later than Dec. 1, 2000.
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