Summary:

 House Bill 13 (HB 13) establishes distribution system planning requirements for public utilities; requires distribution system plans and energization reports; requires beneficial electrification plans; provides for electric public utilities to recover costs for beneficial electrification programs; requires annual reports on beneficial electrification; establishes the virtual power plant program; authorizes the Public Regulation Commission to adopt rules to establish tariffs and performance targets; and allows for compensation to electric public utility customers for participation in the virtual power plant program and utility cost recovery.

 

Legislation Overview:

 House Bill 13 (HB 13) enacts a new section to 62-8-12.1 NMSA 1978 stating that:

A. In accordance with furnishing adequate, efficient and reasonable service, an electric public utility must: 
(1) conduct sufficient advanced planning, engineering and construction of distribution system hosting and load capacity and preorder transformers and other needed equipment so that customers can be energized and interconnected without substantial delay; and 
(2) upgrade the electric public utility's electrical distribution systems as needed and in time to allow for achievement of federal, state, regional and local air quality and decarbonization standards, plans and regulations, including vehicle emissions standards. 

B. The commission must finalize a rule no later than December 1, 2025 that establishes a staggered filing schedule as determined by the commission. The distribution system plans must be filed with the Public Regulation Commission (PRC) no earlier than July 1, 2026 and no later than July 1, 2027. 
After filing the initial distribution system plan, an electric public utility must file subsequent distribution system plans with the PRC every three years. 
Specific requirements of distribution system include mapping of distribution hosting capacity, average and maximum target energization time periods; dollar per kilowatt interconnection fees; any flexible interconnection or energization tariffs; a ten-year planning horizon and corresponding five-year budget; and a plan to use distributed energy resources to avoid or minimize the need for traditional distribution system upgrades where feasible.

C. An electric public utility must make related information available online and accessible to customers, stakeholders and verified third parties, and update the information at least quarterly. 

D. An electric public utility may apply to the commission, at the same time as submitting a distribution system plan, for approval of a tariff rider or a change in base rates, or both, to recover the electric public utility's distribution system plan costs. 

E. In a distribution system plan and an application for a general rate case, an electric public utility must report on the electric public utility's current qualified staffing levels for each job classification needed to achieve the policies and requirements of this section. Specific requirements for the staffing report are detailed.

F. The commission must approve a distribution system plan, including associated costs, that: (1) is reasonably designed to maximize benefits and minimize costs; (2) is reasonably expected to allow the electric public utility to achieve the target energization time periods; and (3) is reasonably expected to allow the electric public utility to recover the costs. 

G. An electric public utility must resubmit a distribution system plan for commission approval as determined by the commission. 

H. An electric public utility must provide an energization report to the PRC at least annually, and requirements for this report are detailed.
  
I. The PRC must periodically update the energization time periods and energization report requirements to reflect changed circumstances and new information.

J. The PRC may require an electric public utility to take the remedial actions necessary to achieve energization time periods.
 
K. Required provisions for an electric public utility's contract for new construction are detailed.

L. Definitions are provided for such terms as "beneficial electrification"; (2) "distributed energy resource"; "electric public utility"; "energization"; "energization time period”; "flexible interconnection or energization tariff"; "hosting capacity"; and “load capacity”.

Section 62-17-4 NMSA 1978 is amended to add definitions for "beneficial electrification";  "beneficial electrification plan”; “electric public utility”; and “low-income customer."

A new section of the Efficient Use of Energy Act is enacted to state that:

A.	On or before January 30, 2026, the PRC must direct electric public utilities to file beneficial electrification plans that support voluntary customer adoption of measures for beneficial electrification and adopt rules to establish beneficial electrification targets for 2032;

B.	At least every three years or as directed by the commission, an electric public utility must file an application with the commission for a beneficial electrification plan in conjunction with other plans filed with the PRC;

C.	When considering beneficial electrification plan applications for approval, the PRC must evaluate the plan according to specified criteria;

D.	The PRC may adopt rules to provide additional application criteria to ensure prompt determinations; 

E.	The PRC must take final action within one hundred eighty days of the submission of a beneficial electrification plan and any relating rate recovery mechanism included with the plan; 

F.	An electric public utility must recover its reasonable costs for beneficial electrification programs;

G.	Funding levels for beneficial electrification program costs must be no less than one-half percent of customer electric bills or electric public utility retail revenues from customers eligible for beneficial electrification programs. The utility may propose, and the PRC may approve, higher levels of funding; 

H.	Unless otherwise ordered by the PRC, an electric public utility must provide language on customer bills or through other established customer communications explaining beneficial electrification program benefits; and 

I.	An electric public utility must submit annual reports to the PRC, and requirements for such reports are detailed.

A new section of the Public Utility Act is enacted to state:

A. No later than February 1, 2026, the PRC must adopt rules to establish a virtual power plant program and require an electric public utility to file an application to implement a virtual power plant program. 

B. Requirements for any related rules are detailed.

C. The compensation provided by an electric public utility to customers participating in that utility's program must be commensurate with additional services provided as a result of participation in a virtual power plant program, beyond those services provided as a result of participation in other programs;

D. The PRC must provide opportunities stakeholders to provide input on the virtual power plant programs proposed;

E. The PRC may approve, deny or order revisions to a public electric utility's proposed virtual power plant program or slate of programs, including applicable tariff terms; 

F. Nothing in this section may affect an electric public utility's net metering program for energy that is exported outside of a commission-approved virtual power plant program;

G. To participate in a virtual power plant program, an individual energy storage project with a usable energy capacity of one megawatt or higher will be subject to Public Works Minimum Wage Act; 

H. An electric public utility may recover reasonable costs to facilitate a PRC-approved virtual power plant program;

I. Notwithstanding the provisions of the new section, an electric public utility must recover the cost of virtual power plant program performance payments and any other payments made to program participants through cost recovery mechanisms approved by the PRC; and

J. Definitions are provided for: (1) "distributed energy resource"; (2) "distributed energy resource aggregator"; (3) "grid service"; (4) "performance-based compensation"; (5) "performance requirements"; and (6) "virtual power plant”.
 

Current Law:

 Current law does not make explicit the proposed planning and reporting requirements for public utilities; does not specify cost recovery for beneficial electrification plans; nor provide for electric public utilities to recover costs for beneficial electrification programs. Policies are not in place to support customer participation in virtual power plant programs and utility cost recovery. 

Amendments:

 Amended February 6, 2025 in HENRC

HENRCa/HB13: The House Energy, Environmental and Natural Resources Committee amends House Bill 13 as follows:

1. On page 1, line 17, after "ELECTRIFICATION", strike the remainder of the line and strike lines 18 through 22 in their entirety and insert in lieu thereof a period. 
2. On page 3, line 22, after "resources", insert: ", which may include performance-based compensation for aggregated distributed energy resources,". 
3. On page 6, strike lines 15 through 19 in their entirety. 
4. Renumber the succeeding paragraphs. 
5. On page 8, line 25, strike "or avoiding" and insert in lieu thereof a semicolon. 
6. On page 9, strike lines 1 and 2 in their entirety. 
7. On pages 15 through 20, strike Section 4 in its entirety.