N.M. Admin. Code § 17.9.572.22

Current through Register Vol. 35, No. 21, November 5, 2024

Section 17.9.572.22 - FINANCIAL INCENTIVE

A. In accordance with Subsection D of Section 62-16-4 NMSA 1978, a public utility or any other person may, by motion or application, request that the commission develop and provide the public utility with financial or other incentives to encourage the public utility to produce or acquire renewable energy that:

(1) exceeds the applicable annual renewable portfolio standard set forth in Section 62-16-4 NMSA 1978;

(2) results in reductions in carbon dioxide emissions earlier than required by Subsection A of Section 62-16-4 NMSA 1978; or

(3) causes a reduction in the generation of electricity by coal-fired generating facilities, including coal-fired generating facilities located outside of New Mexico.

B. A financial or other incentive proposed under 17.9.572.22 NMAC shall be to encourage the public utility to produce or to acquire renewable energy to accomplish, in the future, at least one of the following purposes:

(1) exceeding the public utility's annual RPS requirements;

(2) reducing carbon dioxide emissions earlier than required by Subsection A of Section 62-16-4 NMSA 1978; or

(3) reducing the generation of electricity by coal-fired generating facilities, including coal-fired generating facilities located outside of New Mexico that serve the utility's customers.

C. A public utility shall not be eligible to receive financial or other incentives for renewable energy that was produced or acquired prior to the date that the commission approves the public utility's application for a financial or other incentive for the specific renewable energy investments.

D. The public utility or other person requesting a financial or other incentive shall have the burden to prove by a preponderance of evidence that the terms and duration of the proposed incentive meet the requirements of this rule and are just and reasonable in light of the utility's costs, its authorized return, and the magnitude of any other incentives that have been authorized by the commission. Any application or motion requesting a financial or other incentive shall be supported by written testimony and exhibits.

E. No incentive shall be awarded under 17.9.572.22 NMAC with respect to a particular investment if the cost of that investment exceeds the demonstrable value of the corresponding reduction in carbon dioxide or other emissions. A utility requesting a financial or other incentive under this rule shall establish that the benefits of achieving the goals set out in Subsection B of 17.9.572.22 NMAC above are not exceeded by the costs it incurred to achieve them. To establish this, the utility shall provide detailed analysis for each applicable period, including but not limited to:

(1) the utility's total carbon dioxide emissions;

(2) the reduction in the utility's carbon dioxide emissions attributable to the measures described in Subsection B of 17.9.572.22 NMAC;

(3) the estimated value of the reduction in carbon dioxide emissions described in Paragraph (2) of this subsection based on an analysis of relevant carbon dioxide markets;

(4) the cost of the measures implemented by the utility that resulted in the lower carbon dioxide emissions identified in Paragraph (2) of this subsection and the dates when each measure was implemented; and

(5) any other costs necessary to implement each of the measures identified in Subsection B of 17.9.572.22 NMAC.

F. The total financial incentive authorized for recovery in rates pursuant to 17.9.572.22 NMAC shall not exceed the product (expressed in dollars) of:

(1) the utility's annual weighted average cost of capital (expressed as a percent); and

(2) the cost of the measures described in Subsection B of 17.9.572.22 NMAC.

G. A financial incentive shall only be granted to encourage a public utility to produce or to acquire renewable energy to accomplish the requirements of Subsection D of Section 62-16-4 NMSA 1978, and it shall not be granted to incentivize only an abandonment or closure of a carbon dioxide emitting generating resource.

H. Public utilities shall file any motion or application under 17.9.572.22 NMAC concurrently with their annual Renewable Energy Act plan.

N.M. Admin. Code § 17.9.572.22

17.9.572.22 NMAC - Rp, 17.9.572.20 NMAC, 5-31-13, Adopted by New Mexico Register, Volume XXXII, Issue 09, May 4, 2021, eff. 5/4/2021, Adopted by New Mexico Register, Volume XXXIV, Issue 04, February 28, 2023, eff. 2/28/2023