1. A. Timing. Beginning in the year specified below, each public utility shall file an application every three years

   2021 2022 2023 El Paso Electric Company (and its successors) Southwest Public Service Company (and its successors) Public Service Company of New Mexico (and its successors) Zia Natural Gas Company (and its successors) New Mexico Gas Company (and its successors) Raton Natural Gas Company (and its successors) Any other public utility

   2021

   2022

   2023

   El Paso Electric Company (and its successors)

   Southwest Public Service Company (and its successors)

   Public Service Company of New Mexico (and its successors)

   Zia Natural Gas Company (and its successors)

   New Mexico Gas Company (and its successors)

   Raton Natural Gas Company (and its successors)

   Any other public utility

   Each of the three years covered by an application shall, for the purposes of 17.7.2.7 NMAC, be treated as a plan year. Each public utility may, but is not required to, file an application prior to the year specified in this subsection. If a utility does not elect to file an application prior to the year specified in this subsection, the measures, programs and incentive approved in the utility’s last energy efficiency case shall continue in effect until modified or terminated. If a utility does elect to file an application prior to the year specified in this subsection, the measures, programs and incentive approved in that case shall continue in effect as provided by the commission. All utilities shall file their annual reports each year and in the same docket as the application that covered the period of the annual report. Public Service Company of New Mexico (and its successors) shall file its application and its annual reports on April 15 of the applicable year. Southwestern Public Service Company (and its successors) shall file its application and its annual reports on May 15 of the applicable year. El Paso Electric Company (and its successors) shall file its application and its annual reports on June 1 of the applicable year. A natural gas company shall file its annual report on or before July 1 of each year, and shall file its application on or before August 31 of the applicable year in which it is required to file an application. If a specified filing date falls on a weekend or legal holiday, the public utility shall file on the next business day.

2. B. Compliance with pre-filing requirements. Applications shall 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. The public utility shall identify by name, association, and contact information, each interested party that participated in the process, including commission staff, the attorney general, and the energy, minerals and natural resources department. The public utility shall summarize each participant's non-binding recommendation on the design, implementation, and use of third-party energy service contractors through competitive bidding for programs and measures.

3. C. The public utility shall identify within its application, its estimated plan year funding for energy efficiency and load management program costs for each year during the plan period.

   1. (1) Estimated plan year funding for electric public utilities energy efficiency and load management program 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 public utility estimates to be billed during the plan year to customer classes with the opportunity to participate, excluding:

      1. (a) gross receipts taxes and franchise and right-of-way access fees;
      2. (b) revenues that the public utility estimates to bill during the plan year to any single customer that exceed $75,000.00;
      3. (c) any customer’s plan year self-directed program credits approved by the public utility or by a commission approved self-direct administrator; and
      4. (d) any customer’s plan year self-directed program exemptions approved by the public utility or by a commission approved self-direct administrator.

   2. (2) Estimated plan year funding for gas public utilities’ energy efficiency and load management program costs shall be expressed in dollars and shall not exceed five percent of customers’ bills that the public utility estimates to be billed during the plan year, excluding:

      1. (a) gross receipts taxes and franchise and right-of-way access fees;
      2. (b) revenues that the public utility estimates to bill during the plan year to any single customer that exceed seventy five thousand ($75,000);
      3. (c) any customer’s plan year self-directed program credits approved by the public utility or by a commission-approved self-direct administrator; and
      4. (d) any customer’s plan year self-directed program exemptions approved by the public utility or by a commission-approved self-direct administrator.

4. D. The public utility's application shall calculate and provide the difference between its actual prior plan year expenditures for measures and programs and the same plan year’s applicable funding required by statute. At the end of each plan year, the public utility shall calculate the following applicable values:

   1. (1) any plan year overage; or
   2. (2) any plan year underage.
5. E. In each plan year, a public utility shall make its best efforts to expend its applicable plan funding as calculated in Subsection C of 17.7.2.8 NMAC above subtracting any applicable prior plan year overage or adding any applicable prior plan year underage; provided, however, that 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. By motion in the docket of its most recent energy efficiency case a utility may seek approval to adjust its plan year expenditures by more than ten percent of the approved funding level.
6. F. The application shall include an executive summary to facilitate commission review.
7. G. The 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 of measures and programs.

8. H. For each proposed measure or program, including previously approved measures and programs submitted for reauthorization, the application shall provide:

   1. (1) the public utility's statement that the measure or program is estimated to be cost-effective and meets the utility cost test;
   2. (2) a detailed description of the proposed measure or program;
   3. (3) the expected useful life of the measure or program;
   4. (4) any participation requirements and restrictions of the measure or program;
   5. (5) the time period during which the measure or program will be offered;
   6. (6) a description of any competitive bid process for utility measures or programs;
   7. (7) the estimated number of measure or program participants, supported by written testimony and exhibits;
   8. (8) the estimated economic benefit to the participants attributable to the measure or program, supported by written testimony and exhibits;
   9. (9) the estimated annual energy savings and the estimated energy savings over the useful life for the measure or program (expressed in kilowatt hours and dollars for electric utilities or in therms and dollars for gas utilities), supported by written testimony and exhibits;
   10. (10) the estimated annual demand savings and the estimated demand savings over the useful life for the measure or program (expressed in kilowatts and dollars), supported by written testimony and exhibits;
   11. (11) the proposed program costs to be incurred by the utility to support more than one measure or program, along with the associated allocation of this cost to each measure or program, and the method used to determine each allocation, supported by written testimony and exhibits;
   12. (12) a detailed separate measure or program budget that identifies the estimated monetary program costs to be incurred by the public utility in acquiring, developing, and operating each measure and program on a life cycle basis, for each year of the expected useful life of the measure or program;

   13. (13) 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 written testimony and workpapers that:

       1. (a) demonstrate and justify how the estimated monetary program costs will be equal to or greater than the actual monetary program costs; and
       2. (b) explain the public utility's rationale and methodology used to determine the estimated monetary program costs.

   14. (14) the estimated avoided monetary cost associated with developing, acquiring and operating associated supply side resources, supported by written testimony and exhibits that:

       1. (a) demonstrate and justify how the estimated avoided monetary cost will be equal to or greater than the actual avoided monetary cost; and
       2. (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.
   15. (15) supporting documentation, underlying data, calculations, estimates and other items shall be 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, and that facilitates a simple comparison of measure or program estimated results to actual results, including the public utility's cost of capital and discount rate; and
   16. (16) if the utility cost test is not met, justify why the utility is proposing to implement the program within its portfolio of proposed programs.
9. I. The public utility shall demonstrate, and has the burden to demonstrate, that it has evaluated and determined that the proposed measure or program is cost-effective and will reduce energy usage or energy demand or both, if approved by the commission and implemented by the utility.
10. J. The public utility shall demonstrate that its portfolio of proposed measures and programs are cost-effective, meets the utility cost test as defined by Subsection C of Section 62-17-4 NMSA 1978 and are designed to provide every affected customer class with the opportunity to participate and benefit economically.
11. K. The public utility shall demonstrate that no less than five percent of the funding for measure and program costs shall be specifically directed to measures or programs for low-income customers.

12. L. Any application that includes a proposed annual incentive award shall:

    1. (1) be based on the utility’s costs;
    2. (2) be based on satisfactory performance of measures and programs;
    3. (3) be supported by written testimony and exhibits; and

    4. (4) shall not exceed the product (expressed in dollars) of:

       1. (a) its weighted cost of capital (expressed as a percent), and
       2. (b) its approved annual program costs.
13. M. For each approved large customer self-directed program, the utility's application shall describe, in an annual report, 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.
14. N. The commission shall act expeditiously on the public utility's request for approval of its energy efficiency and load management measures and programs.

[17.7.2.8 NMAC - Rp. 17.7.2.8 NMAC, 9/26/2017; A, 10/26/2021]