Annual Report 3 - New Mexico - Energy, Minerals and Natural ...

CERB program is jointly administered by ECMD and the New Mexico Finance Authority (NMFA). ECMD is
responsible for providing energy audit funding, reviewing the projects, calculating the estimated energy cost savings
and making certification to the NMFA for sale of revenue bonds. Currently, energy audits are under review for the
New Mexico Department of Transportation for installation of a large photovoltaic array at its Santa Fe location and
for nine school districts located in eastern New Mexico. The energy audits’ review will ensure that the reports provide
sufficiently-detailed information for certification to NMFA.
Public Facility Energy Efficiency and Water Conservation Act [NMSA 1978, § 6-23]: Permits governmental
units such as public schools, universities, municipalities and state agencies to enter into long-term installment
payment contracts and lease-purchase agreements of up to 25 years for the evaluation, recommendation, purchase
and installation of energy efficiency, renewable energy and water conservation measures. ECMD reviews the
energy studies developed for these projects to determine if the contractor is qualified and if the energy conservation
measures proposed are accurately estimated and reasonable. Since the law was passed, public schools, local
governments and universities have invested $30 million to realize guaranteed savings of $43 million in utility costs.
These cost savings were generated by reductions of 29 million kWh of electricity and 864,000 therms of natural gas.
In addition, millions of gallons of water are saved annually by the reduced energy usage.
Efficient Use of Energy Act (EUEA) [NMSA 1978, § 62-17]: Requires that utilities “acquire” energy efficiency
into their resource mix. The EUEA requires both electric and natural gas utilities to “acquire all cost-effective and
achievable energy efficiency.” “Cost effective” essentially means funding and implementing all energy efficiency
measures that are less expensive than the alternative of building and operating a power plant. As a minimum,
however, the EUEA states that the electric utilities’ requirement “…shall not be less than savings of 5 percent of 2005
retail… sales …in calendar year 2014 and 10 percent in 2020.” Utilities are required to file energy efficiency plans
annually.
The cost-effective energy efficiency approach embodied in the EUEA is also referred to as “decoupling.” Energy
efficiency programs are to be decoupled from energy retail sales; utilities may request rate adjustments to pay for
the programs. Energy efficiency measures cost approximately two to five cents per kWh to implement, whereas new
electric power plants are expected to run in excess of 10 cents per kWh. Thus, the long-term savings to the customers
of incorporating energy efficiency measures and delaying the need to build and operate a new power plant can be
enormous.
Public Regulation Commission (PRC) Activities: EMNRD-ECMD is heavily involved in PRC proceedings,
primarily as they relate to the Renewable Energy Act and the above-described EUEA. New Mexico has also made
a commitment to DOE to achieve decoupling of efficiency from rates in exchange for receiving $31.8 million of
ARRA funding. Under both statutes, the state’s three IOUs, Public Service Company of New Mexico (PNM), El
Paso Electric Company, and Southwestern Public Service Company (SPS), are required to make annual program
plan filings to the PRC. Since the PRC is quasi-adjudicative in nature, these filings are addressed via a quasi-judicial
process involving a hearing examiner, formal testimony and rebuttal. In addition, utilities’ periodic rate case filings
often have renewable energy and/or energy efficiency provisions in them that EMNRD-ECMD addresses in its
participation.
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