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New Mexico Governor Signs Energy Efficiency Bill

On February 27, 2008, New Mexico Governor Bill Richardson signed into law House Bill 305, which strengthens the state’s existing Efficient Use of Energy Act. The bill provides financial incentives to electric and gas utilities to reduce their customers’ energy consumption. HB 305 decouples utility revenues from electricity sales, allowing utilities to earn profits by investing in demand-side efficiency projects rather than simply building new power plants to meet demand. State regulators are now required to approve higher profits for energy-efficiency programs that are more cost-effective than building new electric generation plants. HB 305 also requires electric utilities to achieve energy-efficiency savings of at least five percent of 2005 sales by 2014, and 10 percent by 2020. New Mexico’s Public Regulation Commission (PRC) may set alternative requirements if the utility demonstrates it cannot meet those minimum requirements. The bill further strengthens the state’s energy efficiency measurement and verification requirement, and requires an assessment of utilities’ energy efficiency programs every three years by an independent program evaluator.

Press Release
HB 305