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New Mexico Opening to Electric Competition

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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