As used in the Energy Transition Act:
A. “adjustment mechanism” means a formula-based calculation used to make adjustments to the energy transition charges that are necessary to correct for any over-collection or under-collection of the energy transition charges, to provide for the timely and complete payment of scheduled principal and interest on energy transition bonds and the payment and recovery of other financing costs in accordance with a financing order;
B. “ancillary agreement” means a bond, insurance policy, letter of credit, reserve account, surety bond, interest rate lock or swap arrangement, hedging arrangement, liquidity or credit support arrangement or other similar agreement or arrangement entered into in connection with the issuance of an energy transition bond that is designed to promote the credit quality and marketability of the bond or to mitigate the risk of an increase in interest rates;
C. “assignee” means a person or legal entity, that may be newly created by the qualifying utility, to which an interest in energy transition property is sold, assigned, transferred or conveyed, other than as security, and any successor to or subsequent assignee of such a person or legal entity;
D. “commission” means the public regulation commission;
E. “electric delivery service” means transmission, distribution, generation, energy or any other service from a qualifying utility pursuant to commission-approved rate schedules or special contracts;
F. “energy transition bond” means a bond or other evidence of indebtedness or ownership that is issued by a qualifying utility or an assignee pursuant to a financing order, the proceeds of which are secured by or payable from energy transition property and that are non-recourse to the qualifying utility;
G. “energy transition charge” means a non-bypassable charge paid by all customers of a qualifying utility for the recovery of energy transition costs;
H. “energy transition cost” means the sum of:
(1) financing costs;
(2) abandonment costs, which for a qualifying generating facility shall not exceed the lower of three hundred seventy-five million dollars ($375,000,000) or one hundred fifty percent of the undepreciated investment in a qualifying generating facility being abandoned, as of the date of the abandonment. The abandonment costs subject to this limitation shall include:
(a) up to thirty million dollars ($30,000,000) per qualifying generating facility in costs not previously collected from the qualifying utility’s customers for plant decommissioning and mine reclamation costs, subject to any limitations ordered by the commission prior to January 1, 2019 and affirmed by the New Mexico supreme court prior to the effective date of the Energy Transition Act, associated with the abandoned qualifying generating facility;
(b) up to twenty million dollars ($20,000,000) per qualifying generating facility in costs for severance and job training for employees losing their jobs as a result of an abandoned qualifying generating facility and any associated mine that only services the abandoned qualifying generating facility;
(c) undepreciated investments as of the date of abandonment on the qualifying utility’s books and records in a qualifying generating facility that were either being recovered in rates as of January 1, 2019 or are otherwise found to be recoverable through a court decision; and
(d) other undepreciated investments in a qualifying generating facility incurred to comply with law, whether established by statute, court decision or rule, or necessary to maintain the safe and reliable operation of the qualifying generating facility prior to the facility’s abandonment;
(3) any other costs required to comply with changes in law enacted after January 1, 2019 incurred by the qualifying utility at the qualifying generating facility; and
(4) payments required pursuant to Section 16 [62-18-16 NMSA 1978] of the Energy Transition Act;
I. “energy transition property” means the rights and interests of a qualifying utility or an assignee under a financing order, including the right to impose, charge, collect and receive energy transition charges in an amount necessary to provide for full payment and recovery of all energy transition costs identified in the financing order, including all revenues or other proceeds arising from those rights and interests;
J. “energy transition revenues” means revenues collected by or on behalf of a qualifying utility through an energy transition charge;
K. “financing cost” means the cost incurred by the qualifying utility or an assignee to issue and administer energy transition bonds, including:
(1) payment of the fee authorized pursuant to Subsection L of Section 5 [62-18-5 NMSA 1978] of the Energy Transition Act;
(2) principal, interest, acquisition, defeasance and redemption premiums that are payable on energy transition bonds;
(3) any payment required under an ancillary agreement and any amount required to fund or replenish a reserve account or other account established under any indenture, ancillary agreement or other financing document relating to the energy transition bonds;
(4) any costs, fees and expenses related to issuing, supporting, repaying, servicing and refunding energy transition bonds, the application for a financing order, including related state board of finance expenses, or obtaining an order approving abandonment of a qualifying generating facility;
(5) any costs, fees and related expenses incurred relating to any existing secured or unsecured obligation of a qualifying utility or an affiliate of a qualifying utility that are necessary to obtain any consent, release, waiver or approval from any holder of such an obligation to permit a qualifying utility to issue or cause the issuance of energy transition bonds;
(6) any taxes, fees, charges or other assessments imposed on energy transition bonds;
(7) preliminary and continuing costs associated with subsequent financing; and
(8) any other related costs approved for recovery in the financing order;
L. “financing order” means an order of the commission that authorizes the issuance of energy transition bonds, authorizes the imposition, collection and periodic adjustments of the energy transition charge and creates energy transition property;
M. “financing party” means a trustee, collateral agent or other person acting for the benefit of a bondholder, and a party to an ancillary agreement or the energy transition bonds, the rights and obligations of which relate to or depend upon the existence of energy transition property, the enforcement and priority of a security interest in energy transition property or the timely collection and payment of energy transition revenues;
N. “lowest cost objective” means that the structuring, marketing and pricing of energy transition bonds results in the lowest energy transition charges consistent with prevailing market conditions at the time of pricing of energy transition bonds and the structure and terms of energy transition bonds approved pursuant to the financing order;
O. “municipality” means any incorporated city, town or village, whether incorporated under general act, special act or special charter, incorporated counties and H class counties;
P. “non-bypassable” means that the payment of an energy transition charge may not be avoided by an electric service customer located within a utility service area and shall be paid by the customer that receives electric delivery service from the qualifying utility imposing the charge for as long as the energy transition bonds secured by the charge are outstanding and the related financing costs have not been recovered in full;
Q. “non-utility affiliate” means, with respect to a qualifying utility, a person that is an affiliated interest, as that term is used in the Public Utility Act [Chapter 62, Articles 1 to 6 and 8 to 13 NMSA 1978], but a “non-utility affiliate” does not include a public utility that provides retail utility service to customers in the state;
R. “public utility” means “public utility” as used in the Public Utility Act, but “public utility” does not include a distribution cooperative utility organized pursuant to the Rural Electric Cooperative Act [Chapter 62, Article 15 NMSA 1978];
S. “qualifying generating facility” means a coal-fired generating facility in New Mexico that may be composed of multiple generating units that:
(1) has been granted a certificate of public convenience and for which abandonment authority is granted after December 31, 2018;
(2) is owned or leased, in whole or in part, by a qualifying utility;
(3) if operated by a qualifying utility prior to the effective date of the Energy Transition Act, is to be abandoned prior to January 1, 2023; and
(4) if not operated by a qualifying utility prior to the effective date of the Energy Transition Act, is to be abandoned prior to January 1, 2032; and
T. “qualifying utility” means a public utility that meets the requirements of Paragraph (1) of Subsection G of Section 62-3-3 NMSA 1978 and owns or leases all or a portion of a qualifying generating facility and its successor or assignees.
History: Laws 2019, ch. 65, § 2.
ANNOTATIONS
Effective dates. — Laws 2019, ch. 65 contained no effective date provision, but, pursuant to N.M. Const., art. IV, § 23, was effective June 14, 2019, 90 days after the adjournment of the legislature.