This is what your legislators were talking about for the last week of the 2014 legislative session

Public Service Company of New Mexico (PNM) advocated a bill in the 2014 session that would allow them (and El Paso Electric) to offer discounted electricity rates to businesses as an economic development incentive — ostensibly to create new jobs.

However, HB 296 and SB 283 Economic Development Utility Rates (sponsored by Rep. Moe Maestas and Sen. Stuart Ingle), would simply have shifted costs for economic development utility expansion (such as sprawl development and polluting industries) to other ratepayers — with virtually no safeguards or transparency. Utility companies would negotiate discounted utility rates for big businesses. Then, the utilities would be allowed to increase utility rates for families and small businesses to make up for the discount.

Discounted utility rates for economic development are already authorized under state law. However, the bills would have removed critical safeguards that protect New Mexico’s ratepayers.

The bills eliminated the “excess capacity” requirement from current law. Right now, economic development utility rates can only be negotiated if the increased electricity demands won’t create any new costs to the system or ratepayers — that is, there is excess unused capacity on the system, and the discounted rates would still cover the marginal costs of providing the electricity to the customer. Under HB 296 and SB 283, without the “excess capacity” requirement, the new or expanded electricity demands could involve significant additional costs for production and distribution — all subsidized by other ratepayers.

The bills also removed the Public Regulation Commission (PRC), the elected body that regulates New Mexico utilities, from the process. Under current law, economic development utility rates are subject to approval by the PRC. HB 296 and SB 283 struck PRC oversight from existing statute and did not even authorize the PRC to hold a hearing to determine whether the negotiated rates are in the public interest.

In addition, neither of the bills included any reasonable limitation on how much your utility rates could be increased to make up for the subsidies, or how deep of a discount any individual company could receive. Worse yet, the lack of any transparency meant consumers wouldn’t receive any information about the percentage of their utility bill dedicated to economic development subsidies.

Thankfully, CVNM recognized the problems with the bill and began spreading the word.

In a three-hour hearing late one Saturday night, Senate Judiciary Committee members analyzed virtually every line of the Senate version of the bill.

Senators Joseph Cervantes, Peter Wirth, Cisco McSorley and Michael Sanchez asked tough questions and helped slow the bill down at a critical time. These senators stood up for all New Mexicans, sound policy and good government.