New
Mexico Register / Volume XXXVI, Issue 17 / September 9, 2025
TITLE 17 PUBLIC
UTILITIES AND UTILITY SERVICES
CHAPTER 7 ENERGY
CONSERVATION
PART 2 ENERGY
EFFICIENCY
17.7.2.1 ISSUING
AGENCY: The New Mexico public regulation commission.
[17.7.2.1 NMAC - Rp, 17.7.2.1 NMAC, 8/26/2025]
17.7.2.2 SCOPE: This rule
applies to all electric, gas, and distribution cooperative utilities subject to
the Efficient Use of Energy Act and the commission’s jurisdiction.
[17.7.2.2 NMAC - Rp, 17.7.2.2 NMAC, 8/26/2025]
17.7.2.3 STATUTORY
AUTHORITY: Sections 62-3-1, 62-8-6, and 62-17-1 to -11
NMSA 1978.
[17.7.2.3 NMAC - Rp, 17.7.2.3 NMAC, 8/26/2025]
17.7.2.4 DURATION: Permanent.
[17.7.2.4 NMAC - Rp, 17.7.2.4 NMAC, 8/26/2025]
17.7.2.5 EFFECTIVE
DATE: August 26, 2025, unless a later
date is cited at the end of a section.
[17.7.2.5 NMAC - Rp, 17.7.2.5 NMAC, 8/26/2025]
17.7.2.6 OBJECTIVE: The objective of
this rule is to implement the Efficient Use of Energy Act’s requirements for
public utilities to acquire a portfolio of cost-effective energy efficiency and
load management and to establish criteria to evaluate and implement a portfolio
of cost-effective energy efficiency and load management that reduces energy
demand and energy consumption.
[17.7.2.6 NMAC - Rp, 17.7.2.6 NMAC, 8/26/2025]
17.7.2.7 DEFINITIONS: In addition to
the definitions provided in Section 62-17-4 NMSA 1978, the following
definitions shall apply.
A. Definitions beginning with “A”: [RESERVED]
B. Definitions beginning with “B”: [RESERVED]
C. Definitions beginning with “C”: [RESERVED]
D. Definitions beginning with “D”: “decoupling” means a rate adjustment mechanism to remove regulatory
disincentives to ensure that the revenue per customer approved by the
commission in a general rate case proceeding is recovered by a public utility
without regard to the quantity of electricity or natural gas actually
sold by the public utility subsequent to the
date the rate took effect.
E. Definitions beginning with “E”: “estimate”
means a projection or forecast utilizing well known, commercially available, or
standard engineering, economic, and financial calculations, ratings, and
simulations, or other reasonable means.
F. Definitions beginning with “F”: [RESERVED]
G. Definitions beginning with “G”: [RESERVED]
H. Definitions beginning with “H”: [RESERVED]
I. Definitions beginning with “I”: [RESERVED]
J. Definitions beginning with “J”: [RESERVED]
K. Definitions beginning with “K”: [RESERVED]
L. Definitions beginning with “L”:
(1) “life-cycle basis” means utilizing the expected useful life of the
energy efficiency and load management and applying a net present value
methodology that does not adjust a discount rate for taxes in
order to estimate the associated monetary costs and avoided monetary
costs of the measure or program being evaluated; and
(2) “low-income customer” means a customer with an annual household income at or
below two hundred percent of the federal poverty level, as published annually
by the United States department of health and human services.
M. Definitions beginning with “M”: “measurement and verification” means an analysis performed by an independent
evaluator that estimates, consistent with Subsection B of 17.7.2 NMAC,
reductions of energy usage or peak demand, and determines any actual reduction
of energy usage or peak demand that directly results from the utility's
implementation of particular energy efficiency or load
management measures or programs.
N. Definitions beginning with “N”: “net benefits” means the difference between the present value of
costs and the present value of benefits.
O. Definitions beginning with “O”: [RESERVED]
P. Definitions beginning with “P”:
(1) “plan period” means the three years comprising the triennial plan;
(2) “plan year” means a calendar year for which commission approval is
requested or granted;
(3) “plan year overage” means the prior plan year’s actual expenditures that
exceeded actual collections at the approved funding level; and
(4) “plan year underage” means the prior plan year’s actual collections at the
approved funding level that exceeded actual expenditures.
Q. Definitions beginning with “Q.”: [RESERVED]
R. Definitions beginning with “R”: “RFP” means
“request for proposals.”
S. Definitions beginning with “S”: [RESERVED]
T. Definitions beginning with “T”: “triennial plan” means a utility’s plan to evaluate and implement, over
a plan period, a portfolio of cost-effective energy efficiency and load
management that reduces energy demand and consumption.
U. Definitions beginning with “U”: [RESERVED]
V. Definitions beginning with “V”: [RESERVED]
W. Definitions beginning with “W”: [RESERVED]
X. Definitions beginning with “X”: [RESERVED]
Y. Definitions beginning with “Y”: [RESERVED]
Z. Definitions beginning with “Z”: [RESERVED]
[17.7.2.7 NMAC - Rp, 17.7.2.7 NMAC, 8/26/2025]
17.7.2.8 REQUIREMENTS
FOR TRIENNIAL PLANS:
A. A public utility that is not a
distribution cooperative utility shall file an application seeking approval of
a triennial plan three years from the filing date of its previous application.
B. Compliance with pre-filing
requirements: A public utility’s triennial plan shall:
(1) describe how the public utility
has met the pre-filing requirements of Subsection E of Section 62-17-5 NMSA
1978, including descriptions of the process used to solicit non-binding
recommendations, and any competitive bids required by the commission for good
cause;
(2) identify by name, association, and
contact information, each stakeholder that participated in the pre-filing process,
including commission staff, the attorney general, and the energy, minerals and
natural resources department; and
(3) summarize each stakeholder’s
non-binding recommendation on the design, implementation, and use of
third-party energy service contractors through competitive bidding for programs
and measures.
C. Plan year funding; costs;
expenditures:
(1) A triennial plan shall include the estimated plan year funding for
energy efficiency and load management portfolio costs for each plan year during
the plan period.
(2) Estimated plan
year funding for an electric public utility’s triennial plan costs shall be
expressed in dollars and shall be no less than three percent and no more than
five percent of billing revenues from all of its
customers’ bills that the electric public utility estimates to be billed during
the plan year to customer classes with the opportunity to participate,
excluding:
(a) gross receipts taxes, franchise fees, and right-of-way
access fees;
(b) revenues that the
electric public utility estimates to bill during the plan year to any single
customer that exceed $75,000.00;
(c) any customer’s
plan year self-directed program credits approved by the electric public utility
or by a commission approved self-directed program administrator; and
(d) any customer’s
plan year self-directed program exemptions approved by the electric public
utility or by a commission approved self-directed program administrator.
(3) Estimated plan
year funding for a gas public utility’s triennial plan costs shall be expressed
in dollars and shall not exceed five percent of customers’ bills that the gas public
utility estimates to be billed during the plan year,
excluding:
(a) gross receipts taxes, franchise fees, and right-of-way access fees;
(b) revenues that the gas public utility estimates to bill during the plan
year to any single customer that exceed $75,000.00;
(c) any customer’s plan year self-directed program credits approved by the gas
public utility or by a commission-approved self-directed program administrator;
and
(d) any customer’s plan year self-directed program exemptions approved by
the gas public utility or by a commission-approved self-directed program
administrator.
(4) A triennial plan
shall include a calculation of the difference between the prior plan year’s actual
plan expenditures and the prior plan year’s applicable funding required by
statute.
(5) In each plan
year, a public utility shall make its best efforts to expend its approved triennial
plan funding while seeking to maximize cost-effective energy efficiency and
load management.
(a) A public utility may
periodically adjust its plan year expenditures by an amount not greater than ten
percent of the approved funding level if the adjustment will result in aligning
plan year expenditures more closely with projected plan year collections.
(b) A public utility may seek approval,
by motion in its most recent triennial plan approval docket, to adjust its plan
year expenditures by more than ten percent of the approved funding level.
(6) The public utility shall utilize
well known, commercially available, or standard engineering, economic and
financial calculations, ratings, and simulations, or other reasonable methods,
to determine monetary costs and avoided monetary costs at the portfolio and
program levels.
D. A triennial plan shall include an
executive summary.
E. For each proposed measure or program, including a previously approved
measure or program submitted for reauthorization, a triennial plan shall
contain:
(1) a detailed description of the measure or program;
(2) the expected useful life of the measure or program;
(3) any participation requirements and restrictions of the measure or
program;
(4) the time period during which the measure or
program will be offered;
(5) a description of any competitive bid process for the measure or program;
(6) the estimated number of measure or program participants, supported by
testimony and exhibits;
(7) the estimated economic benefit to participants attributable to the
measure or program, supported by testimony and exhibits;
(8) the estimated annual energy savings for, and the estimated energy
savings over the useful life of, program, supported by written testimony and
exhibits, expressed in:
(a) kilowatt hours and dollars for
electric utilities; and
(b) therms
and dollars for gas utilities;
(9) the estimated annual demand savings for, and the estimated demand
savings over the useful life of, the measure or program, expressed in kilowatts
and dollars, supported by testimony and exhibits;
(10) a
detailed budget that identifies the estimated monetary program costs to be
incurred by the public utility in acquiring, developing, and operating each
measure or program on a life-cycle basis and for each year of the expected
useful life of the measure or program;
(11) the
estimated monetary program costs to be incurred by the public utility in
acquiring, developing, and operating each measure or program on a life-cycle
basis, supported by testimony and exhibits that:
(a) demonstrate and justify how the estimated monetary program costs will
be equal to or greater than the actual monetary program costs; and
(b) explain the public utility’s rationale and methodology used to
determine the estimated monetary program costs;
(12) the
estimated avoided monetary cost associated with developing, acquiring, and
operating associated supply side resources, supported by testimony and exhibits
that:
(a) demonstrate and justify how the estimated avoided monetary costs will
be equal to or greater than the actual avoided monetary costs; and
(b) explain the public utility’s rationale and methodology used to estimate
the avoided monetary cost associated with acquiring, developing, and operating
the associated supply side resource; and
(13) supporting
documentation, underlying data, calculations, estimates, and other items,
presented in a manner that facilitates the preparation of a measurement and
verification report by an independent program evaluator, along with compilation
and preparation of the public utility’s reporting requirements that facilitates
a simple comparison of estimated results to actual results, including the
public utility’s cost of capital and discount rate.
F. A triennial plan shall include an evaluation and determination that it will
reduce energy usage, energy demand, or both.
G. A triennial plan shall include an analysis showing that the portfolio is
cost-effective by meeting the utility cost test and is designed to provide
every affected customer class with the opportunity to participate and benefit
economically.
H. A public utility may request approval of an annual incentive award in
its application requesting approval of a triennial plan. An annual incentive
award shall:
(1) be based on the utility’s costs or net benefits;
(2) be based on satisfactory performance of the triennial plan in a given
plan year, which may be shown by the utility meeting or exceeding the energy
savings requirements of this rule;
(3) be supported by testimony and exhibits; and
(4) not
exceed the product (expressed in dollars) of:
(a) its weighted cost of capital (expressed as a percent) plus two percent,
and
(b) its approved plan year funding.
I. For each approved large customer self-directed program, the utility’s triennial
plan shall describe the process that enabled the utility to determine that a
large customer self-directed program met the cost-effective definition set
forth in Subsection B of Section 62-17-9 NMSA 1978 and merited the credit or
exemption.
J. The commission shall act expeditiously on a request for approval of a
triennial plan. If a public utility
requests approval of a tariff rider simultaneously with its triennial plan,
then the review procedures of 17.7.2.13 NMAC shall control.
[17.7.2.8 NMAC - Rp, 17.7.2.8 NMAC, 8/26/2025]
17.7.2.9 RESIDENTIAL
PROGRAMS:
A. Energy efficiency and load management programs directed to residential
customers shall enable residential customers or households to conserve energy,
reduce demand, or reduce residential energy bills.
(1) A public utility may stack its incentives
with other state or federal programs as available to make energy efficiency and
load management more attractive to residential customers.
(2) A public utility shall not be
penalized through the independent program evaluation process for stacking
incentives or programs, such as receiving free-ridership penalties or less than
full credit for energy efficiency.
B. A public utility shall direct at
least ten percent of its plan year funding, during each year of the plan
period, to programs for low-income customers.
(1) The commission may approve a
public utility to deviate from the ten percent low-income spending requirement
if the public utility’s portfolio is not cost-effective overall.
(2) A public utility may coordinate with existing community resources,
including affordable housing programs, and low-income weatherization programs
managed by other utilities and federal, state, county, or local
governments. This section does not
preclude the public utility from designing and proposing other low-income
programs.
(3) A public utility shall prefer utilizing providers with experience in
the effective design, administration, and provision of low-income energy
efficiency and load management measures and programs, along with experience in
identifying and conducting outreach to low-income households. In the absence of qualified providers, a
public utility that does not provide measures or programs directly
may solicit qualified competitive bids for these services.
(4) In developing the utility cost test for energy efficiency and load
management directed to low-income customers, unless otherwise quantified in a
commission proceeding, the public utility shall assume that twenty percent of
the calculated energy savings is the reasonable value
of:
(a) reductions in working capital;
(b) reduced collection costs;
(c) bad-debt expense;
(d) improved customer service
effectiveness; and
(e) other appropriate factors qualifying
as utility system economic benefits.
[17.7.2.9 NMAC - Rp, 17.7.2.9 NMAC, 8/26/2025]
17.7.2.10 SELF-DIRECTED
PROGRAM CREDITS FOR LARGE CUSTOMERS:
A. A large customer may be eligible to receive a credit equal to the
expenditures that the large customer makes at its facilities toward
cost-effective energy efficiency and load management projects.
(1) A large customer’s expenditures shall meet
the utility cost test as a condition to receiving approval for a credit.
(2) The credit may be used to offset up to seventy percent of an energy
efficiency tariff rider.
(3) Eligible expenditures shall
have a simple payback period of more than one year but less than seven years.
(4) Projects that have received
rebates, financial support, or other substantial program support from a utility
are not eligible for a credit.
(5) Any credit not fully utilized in the year it is received shall carry
over to subsequent years.
B. Large customers shall seek and receive approval for credits from the
utility or a commission-approved self-direct administrator.
C. Large customers applying for an investor-owned electric utility bill
credit shall meet the electricity consumption size criteria set forth in
Subsection G of Section 62-17-4 NMSA 1978 and the utility cost test.
D. Large customers applying for gas utility bill credit shall meet the gas
consumption criteria as set forth in Subsection G of Section 62-17-4 NMSA 1978
and the utility cost test.
E. Large customers seeking a credit shall provide, to the public utility
or the commission-approved self-direct program administrator, access to all
relevant engineering studies and documentation needed to verify energy savings
of a project, and allow access to its site for
reasonable inspections at reasonable times.
All records relevant to a self-directed program shall be maintained by
the large customer for the duration of the program, and evaluated in accordance
with this rule, subject to appropriate protections for confidentiality.
F. The utility shall designate a qualified representative to review, and
approve or disapprove, requests for credits.
G. The commission may appoint a program administrator to review, and approve
or disapprove, requests for credits.
H. Approvals or disapprovals by the utility representative or
administrator shall be subject to commission review.
(1) Within 30 business days, the
utility representative or administrator shall file each self-directed program
review, approval, or disapproval with the commission, and serve notice on all
interested parties.
(2) Notice of an appeal of a utility
or administrator approval or disapproval of a large customer credit request
shall be filed with the commission within 30 calendar days of the approval or
disapproval action.
I. Implementation of credits shall be designed to minimize utility
administrative costs.
J. Self-directed program participants, or large customers seeking
exemption, shall submit qualified in-house or contracted engineering studies,
and such other information as may be reasonably required by the utility or
program administrator, to demonstrate qualification for self-directed program
credits.
K. The public utility or administrator shall act expeditiously on requests
for self-direct program approval.
L. For investor-owned electric utilities, the equivalent amount of energy
savings associated with a large customer’s self-directed program shall be
accounted for in calculating its compliance with minimum required energy
savings.
M. Credit eligibility:
(1). Large customer
expenditures incurred to produce electric energy savings or electric demand
savings are only eligible for an electric utility bill credit.
(2) Large customer expenditures
incurred to produce natural gas energy savings or natural gas demand savings
are only eligible for a gas utility bill credit.
(3) Large customer expenditures
incurred to produce electric and natural gas energy savings, electric and
natural gas demand savings, or any combination of energy savings and demand
savings for both electric and natural gas, are eligible for an electricity bill
credit and a gas utility bill credit, provided that the same energy efficiency
expenditures or load management expenditures shall not be double counted.
[17.7.2.10 NMAC - Rp, 17.7.2.10 NMAC, 8/26/2025]
17.7.2.11 SELF-DIRECTED
PROGRAM EXEMPTIONS FOR LARGE CUSTOMERS:
A. To receive approval for an exemption to paying seventy percent of the
tariff rider, a large customer shall demonstrate, to the reasonable
satisfaction of the public utility or self-directed program administrator, that
it has exhausted all cost-effective energy efficiency and load management projects
at its facilities.
(1) Projects that
have received rebates, financial support, or other program support from a
utility are not eligible for an exemption.
(2) Eligible
expenditures shall have a simple payback period of more than one year but less
than seven years.
B. Large customers shall seek and receive
approval for exemptions from the utility or a commission-approved self-direct
administrator.
C. Large customers applying for an investor-owned electric utility bill
exemption shall meet the electricity consumption size criterion set forth in
Subsection G of Section 62-17-4 NMSA 1978.
D. Large customers applying for a gas utility bill exemption shall meet
the gas consumption criterion set forth in Subsection G of Section 62-17-4 NMSA
1978.
E. The utility shall designate a qualified representative to review, and
approve or disapprove, requests for exemptions.
F. The commission may appoint a program administrator to review, and
approve or disapprove, requests for exemptions.
G. Approvals or disapprovals by the utility representative or
administrator shall be subject to commission review.
(1) Within 30 business days , the
utility representative or administrator shall file each self-directed program
approval or disapproval with the commission, and serve
notice on all interested parties.
(2) Notice of an appeal of a utility
or administrator approval or disapproval of a large customer exemption request
shall be filed with the commission within 30 calendar days of the approval or
disapproval action.
H. Self-directed program participants, or large customers seeking an
exemption shall provide, to the public utility or the commission approved
self-direct program administrator, access to all relevant engineering studies
and documentation needed to verify energy saving of a project, and allow access
to its site for reasonable inspections, at reasonable times. All records relevant to a self-directed
program shall be maintained by the large customer for the duration of the program,
and evaluated in accordance with this rule, subject to appropriate protections
for confidentiality.
I. Self-directed program participants, or large customers seeking
exemption, shall submit qualified in-house or contracted engineering studies,
and such other information as may be reasonably required by the utility or
program administrator, to demonstrate qualification for self-directed program
exemptions.
J. The utility or administrator shall act expeditiously on requests for
self-direct program approval.
K. For investor-owned electric utilities, the equivalent amount of energy
savings associated with a large customer’s self-directed program shall be
accounted for in calculating its compliance with minimum required energy
savings.
L. Credit eligibility:
(1) Large customer expenditures
incurred to produce electric energy savings or electric demand savings are only
eligible for an electric utility bill credit.
(2) Large customer expenditures
incurred to produce natural gas energy savings or natural gas demand savings
are only eligible for a gas utility bill credit.
(3) Large customer expenditures
incurred to produce electric and natural gas energy savings, electric and
natural gas demand savings, or any combination of energy savings and demand
savings for electric and natural gas, are eligible for an electricity bill
credit and a gas utility bill credit, provided that the same energy efficiency
expenditures or load management expenditures shall not be double counted.
[17.7.2.11 NMAC - Rp, 17.7.2.11 NMAC, 8/26/2025]
17.7.2.12 MODIFICATION
OR TERMINATION:
A. Within each plan year, the commission may, or any party may move the
commission to, modify a program, terminate a program, or approve a new program.
(1) A motion to modify, terminate, or
approve a program shall be filed in the public utility’s most recent triennial
plan approval docket.
(2) The commission’s modification or
termination of a program shall occur only after an adequate period of implementation
has elapsed and the commission determines that the program is not sufficiently
meeting its goals and purposes.
(3) Program modification or termination
shall not nullify any preexisting obligations of the utility, alternative
energy efficiency provider, or contractor for performance or failure to
perform.
(4) Program termination shall be
accomplished in a manner that allows the utility to fully recover its prudent
and reasonable program costs.
B. Within each plan year, a public utility may modify, terminate, or add measures
in its portfolio; modify customer incentive levels; or make other adjustments
to an approved measure or program if necessary to maintain the overall success
of the measure or program; so long as the portfolio remains cost-effective
under the utility cost test.
[17.7.2.12 NMAC - Rp, 17.7.2.12 NMAC, 8/26/2025]
17.7.2.13 REQUIREMENTS
FOR COST RECOVERY:
A. An electric utility shall only recover energy efficiency and load
management costs from customer classes with an opportunity to participate in
approved programs.
B. A public utility, at its option, may recover its prudent and reasonable
program costs and approved incentives, either through an approved tariff rider,
in base rates or a combination of both.
C. If a public utility seeks recovery of costs through a tariff rider, the
utility shall file an advice notice and present the proposed ratemaking
treatment to the commission for approval in its application for approval of its
triennial plan.
(1) The public utility’s tariff rider ratemaking
treatment proposal shall reconcile recovery of any costs currently being
recovered through a tariff rider or in base rates, or by a combination of the
two, as well as any new costs proposed to be recovered through a tariff rider
or in base rates, or by a combination of the two.
(2) Unless otherwise ordered by the commission, the public utility shall:
(a) apply the tariff rider on a monthly basis; and
(b) include language on customer bills explaining program
benefits.
D. If a public utility seeks base rate recovery of costs, the utility
shall present the proposed ratemaking treatment to the commission for approval
in a general rate case.
(1) The public utility’s base rate
ratemaking treatment proposal shall reconcile recovery of any costs currently
being recovered through a tariff rider or in base rates, or by a combination of
the two, as well as any new costs proposed to be recovered through a tariff
rider or in base rates, or by a combination of the two.
(2) The commission shall not reduce a
public utility’s return on equity based on approval of profit incentives
pursuant to the Efficient Use of Energy Act.
E. The commission may approve a public utility to defer program costs and
incentives for future recovery through creation of a regulatory asset with
carrying charges.
F. Commission review of tariff rider:
(1) A tariff rider proposed by a public utility to fund approved energy
efficiency and load management costs shall go into effect 30 days after filing,
unless suspended by the commission for a period not to exceed 180 days.
(2) If the tariff rider to fund
approved programs is not approved or suspended within 30 days after filing, it
shall be deemed approved.
(3) If the commission suspends the
effective date of a tariff rider to fund approved programs, but the commission does
not act to approve or disapprove the tariff rider by the end of the suspension
period, the tariff rider shall be deemed approved.
(4) The commission shall act
expeditiously on a public utility’s request for approval of a tariff rider to
fund new programs.
(5) Annual reconciliation:
(a) A
public utility shall annually reconcile its approved tariff rider, accounting
for any plan year overage or underage.
(b) The public utility shall include its
reconciliation in the public utility’s annual report, supported by appropriate
exhibits, workpapers, or other documentation necessary
to understand the reconciliation.
(c) Commission staff shall evaluate the
public utility’s tariff rider reconciliation upon filing and notify the commission
if staff identifies any issues or proposes any corrective instructions.
(d) If the commission does not act to
approve or disapprove, with corrective instructions, a reconciliation within 30
days, it shall be deemed approved.
(c) If a public utility’s annual
reconciliation would result in changes to the utility’s tariff if approved, the
annual reconciliation shall additionally be filed as an advice notice.
G. Funding for the services of an
independent program evaluator shall be paid by the public utility and treated
as a regulatory asset to be recovered through rates established in the public
utility’s next general rate proceeding.
[17.7.2.13 NMAC - Rp, 17.7.2.13 NMAC, 8/26/2025]
17.7.2.14 ANNUAL
REPORT:
A. A public utility shall file a report annually detailing its actions taken to comply with and fulfill the Efficient Use
of Energy Act, this Rule, and its triennial plan approved for the reported year.
(1) The public utility shall file its
annual report on the calendar date anniversary of the filing of its triennial
plan in each plan year of the plan period.
(2) The public
utility shall file its annual report in the docket associated with the
triennial plan covering the plan year subject of the report.
(3) The public utility shall make its
annual report publicly accessible on its website.
B. A public utility shall include the following information for each
program in its annual report:
(1) documentation of expenditures in the reported plan year, and estimates
of expenditures expected in the next plan year, including documentation of any
adjustments to expenditures in the reported plan year and expected adjustments
to the next plan year;
(2) estimated and actual customer participation levels for the reported plan year;
(3) estimated and actual energy savings for the reported plan year;
(4) estimated and actual demand savings for the reported plan year;
(5) estimated and actual monetary costs for the reported plan year;
(6) estimated and actual avoided monetary costs for the reported plan year;
(7) an evaluation of its cost-effectiveness;
(8) for a self-directed program, an evaluation of its cost-effectiveness
and pay-back period; and
(9) a comparison of estimated energy
savings, demand savings, monetary costs and avoided monetary costs to actual
energy savings, demand savings, actual monetary costs, and avoided monetary
costs by year.
C. A public utility shall also include the following information in its
annual report:
(1) the most recent measurement and verification report of the independent
evaluator;
(2) a listing of each program expenditure not covered by the independent
measurement and verification report and related justification as to why the
evaluation was not performed;
(3) a listing of the total number of triennial plan participants served by
year;
(4) the total number of customers applying for and participating in
self-directed programs;
(5) the total number of customers
applying for and receiving self-directed program exemptions;
(6) measurement and verification of
self-directed program targets,
(7) self-directed program payback
periods and achievements;
(8) self-directed program customer
expenditures on qualifying projects;
(9) self-directed program oversight
expenses incurred by the utility representative or administrator;
(10) if unable to comply, an explanation
of why the public utility cannot achieve the minimum requirements of 17.7.2.19
NMAC, and a proposal for alternative requirements for acquiring cost-effective
and achievable energy efficiency and load management;
(11) a reconciliation of the public
utility’s commission-approved tariff rider;
(12) a calculation of any plan year
overage or underage; and
(13) any
other information that may be required by the commission.
[17.7.2.14 NMAC - Rp, 17.7.2.14 NMAC, 8/26/2025]
17.7.2.15 MEASUREMENT
AND VERIFICATION:
A. Every energy efficiency and load management program shall be
independently evaluated at least every three years.
B. A public utility shall submit to the commission with its annual report
for that year, a comprehensive measurement, verification, and program
evaluation report prepared by an independent program evaluator.
(1) Commission staff shall select and direct an independent program evaluator
to prepare and submit a comprehensive measurement, verification, and program
evaluation report to the commission.
(2) Commission staff shall:
(a) undertake a competitive bid process and abide by State purchasing rules
and commission policies in selecting an independent program evaluator;
(b) develop an RFP, including the scope, terms of work, and evaluation
process to score the RFP responses;
(c) receive, review, score, and rank the RFP responses;
(d) rank and recommend competitive qualified bidders to the commission;
(e) negotiate a contract with the competitive bidder who is awarded the bid;
and
(f) administer the contract,
including:
(i) confirming
that contract deliverables are met;
(ii) reviewing invoices and related
contract performance; and
(iii) approving utility invoices after
review.
(3) Commission staff shall consult
with the public utility and other interested stakeholders in the selection of
the independent program evaluator.
C. An independent program evaluator shall:
(1) measure and verify energy and demand savings;
(2) determine program cost-effectiveness by utilizing the data contained in
the utility’s approved triennial plan;
(3) assess the public utility’s performance in implementing its triennial
plan;
(4) assess whether
the utility has complied with its requirements under the Efficient Use of
Energy Act and this rule, and whether it has operated in good faith;
(5) provide recommended improvements for program performance;
(6) confirm that programs were implemented, meet reasonable quality
standards, and are operating fully and correctly;
(7) utilize applicable international performance measurement and
verification protocols, describe any deviation from those protocols, and
explain the reason for such deviation;
(8) evaluate self-directed programs,
expenditures, credits, and exemptions using the same measurement and
verification standards applied to utility measures and programs by the utility
or commission-approved self-directed program administrator; and
(9) fulfill any other measurement and verification duties required by law.
D. The independent program evaluator shall provide all information and documentation at the portfolio
and program levels, and all assumptions utilized in its evaluation.
E. The public utility shall cooperate with the independent program
evaluator and commission staff in making information and personnel available to
facilitate the independent program evaluator’s report.
F. Upon written request by a large customer, the information provided by the
large customer to the utility or program administrator, independent program
evaluator, or others, shall remain confidential except as otherwise ordered by
the commission.
G. The independent evaluation
process, including net-to-gross and free-ridership calculations, should be
independent of other state and federal incentives as to not penalize a public
utility for stacking incentives or programs.
[17.7.2.15 NMAC - Rp, 17.7.2.15 NMAC, 8/26/2025]
17.7.2.16 DISTRIBUTION
COOPERATIVES:
A. Every 24 months, a distribution cooperative utility shall examine the potential
to assist its customers in reducing energy consumption or peak electricity
demand in a cost-effective manner.
(1) Based on these studies, a distribution
cooperative utility shall establish or update energy efficiency and load
management savings targets, and it shall implement or update cost-effective
energy efficiency and load management programs that are economically feasible
and practical for its members and customers.
(2) The governing body of the distribution
cooperative utility, rather than the commission, shall have the authority to
approve or deny energy efficiency and load management savings targets and programs.
(3) In offering or implementing energy
efficiency, conservation or load management programs, a distribution
cooperative utility shall attempt to minimize any cross-subsidies between
customer classes.
B. A distribution cooperative utility shall file a report by May 1st
annually, describing all of its programs or measures
that promote energy efficiency, conservation, or load management.
(1) The report shall set forth the costs
of each measure or program for the previous calendar year and the resulting
effect on electricity consumption.
(2) The report shall
include a description of all planned programs or measures to promote energy
efficiency, conservation, or load management, and the planned implementation
dates.
C. Costs resulting from programs or measures to promote energy efficiency,
conservation, or load management may be recovered by the distribution
cooperative utility through its general rates.
In requesting approval to recover such costs in general rates, the
distribution cooperative utility may elect to use the procedure set forth in
Subsection G of Section 62-8-7 NMSA 1978.
[17.7.2.16 NMAC - Rp, 17.7.2.16 NMAC, 8/26/2025]
17.7.2.17 AUDIT:
A. The commission may audit a public
utility to examine whether the public utility’s triennial plan costs are
prudent, reasonable, and properly assigned to programs in accordance with the
Efficient Use of Energy Act, this rule, commission orders, and other applicable
requirements and standards.
B. The cost of an audit may be
considered a recoverable program cost unless it results in a commission finding
of the public utility’s malfeasance or misfeasance; in which case, audit costs may
not be recoverable from the public utility’s customers.
[17.7.2.17 NMAC - Rp, 17.7.2.18 NMAC, 8/26/2025]
17.7.2.18 ENERGY
SAVINGS TARGETS FOR ELECTRIC UTILITIES:
A. A public utility providing electricity service to New Mexico customers
shall acquire or implement, over plan years 2026-2030, a portfolio of cost-effective
and achievable energy efficiency and load management available in its service
territory that shall produce a savings, by plan year 2030, of at least five
percent of its 2025 total retail kilowatt-hour sales to New Mexico customer
classes that had the opportunity to participate.
B. If the commission determines, after public hearing on an electric
utility’s triennial plan, that the minimum requirements of this section exceed
the achievable amount of energy savings available to the electric utility, or
that the costs to achieve the minimum requirements of this section are neither
prudent nor reasonable, the commission shall establish lower minimum energy
savings requirements for the utility based on the maximum amount of energy savings
that the commission determines may be achievable for the utility.
C. The commission-provided incentives for an electric utility’s compliance
with this section shall be the same as that which the commission provides for a
triennial plan pursuant to Subsection H of 17.7.2.8 NMAC.
[17.7.2.18 NMAC - N, 8/26/2025]
17.7.2.19 DECOUPLING:
A. A public utility may petition the commission for approval of a
decoupling rate adjustment mechanism.
(1) A public utility shall separately
calculate regulatory disincentives removed through a rate adjustment mechanism
for the rate class or classes to which the mechanism applies.
(2) A public utility shall collect or
refund regulatory disincentives removed through a rate adjustment mechanism
through a separate tariff rider than that for which the commission approved the
public utility to collect triennial plan costs and incentives.
(3) A public utility’s petition shall
be included in a general rate case filing.
B. Burden of proof:
(1) The public utility petitioner shall
bear the burden to prove that the proposed decoupling rate adjustment mechanism
will result in just and reasonable rates.
(2) The public utility petitioner
shall bear the burden to prove that rate regulation has created regulatory
disincentives or barriers to the utility’s expenditures on energy efficiency
and load management that will be alleviated through the adoption of a decoupling
rate adjustment mechanism.
(3) The public utility petitioner
shall bear the burden to prove that the proposed decoupling rate adjustment
mechanism will remove regulatory disincentives or barriers for public utility
expenditures on energy efficiency and load management.
(4) The public utility petitioner may
not prove its need for a decoupling rate adjustment mechanism by citing revenue
losses resulting from business risks or other factors not specified in this rule.
C. Commission review:
(1) The commission shall review the public utility’s petition to ensure
that the decoupling rate adjustment mechanism balances the interests of the
public, consumers, and investors, and results in just and
reasonable rates.
(2) The
commission shall approve a public utility’s petition for a decoupling rate
adjustment mechanism unless the commission finds it to be unjust or
unreasonable. If the commission finds the petition to be unjust or
unreasonable, the commission may:
(a) modify the proposed decoupling
rate adjustment mechanism; or
(b) deny the petition pursuant to
Subsection D of Section 62-8-7 NMSA 1978.
(2) The commission shall not reduce a public utility’s return on equity
based on approval of a decoupling rate adjustment mechanism.
D. A public utility that receives
commission approval for a decoupling rate adjustment mechanism:
(1) shall be eligible to earn an increased
annual incentive award capped at fifteen percent of its approved plan year
funding pursuant to Subsection H of 17.7.2.8 NMAC; and
(2) may seek a variance from the plan
year funding requirements of Paragraphs (2) and (3) of Subsection C of 17.7.2.8
NMAC.
[17.7.2.19 NMAC - N, 8/26/2025]
HISTORY OF 17.7.2 NMAC:
Pre NMAC History:
none.
History of Repealed Material:
17.7.2 NMAC, Energy Efficiency (filed 2/2/2007),
repealed 5/3/2010.
17.7.2 NMAC, Energy Efficiency (filed 4/16/2010),
repealed 1/1/2015.
17.7.2 NMAC, Energy
Efficiency, filed (04/16/2010) - Repealed effective 9/26/2017.
17.7.2 NMAC, Energy Efficiency, filed (9/14/2017) -
Repealed effective 8/26/2025.
NMAC History:
17.7.2 NMAC, Energy Efficiency (filed 2/2/2007) was
replaced by 17.7.2 NMAC, Energy Efficiency, effective 5/3/2010.
17.7.2 NMAC, Energy Efficiency, (filed 04/16/2010) was
replaced by 17.7.2 NMAC, Energy Efficiency, effective 9/26/2017. 17.7.2 NMAC,
Energy Efficiency, (filed 9/14/2017) was replaced by 17.7.2 NMAC, Energy
Efficiency, effective 8/26/2025.