April 7, 2017 was the last day for the Governor to sign, veto, or pocket veto any bills passed by the New Mexico legislature during the 2017 legislative session. What passed and what did not is significant for New Mexico’s renewable energy industry.
New Mexico’s Distributed Generation companies will face new consumer protection laws after the 2017 Legislative Session. The Governor signed into law the House Judiciary substitute for House Bill 199—the Distributed Generation Disclosure Act (“DGDA”). The DGDA requires that certain disclosures be included on any agreement governing the financing, sale or lease of a distributed energy generation system, or an agreement governing the sale of power to a power purchaser. The nineteen new disclosures sellers or lessors are required to make pursuant to the DGDA include:
- Whether the warranty or maintenance obligations related to the system may be sold or transferred to a third party;
- Whether, per the agreement, the buyer or lessee is restricted from modifying or transferring ownership of the distributed generation system, including whether any modification or transfer is subject to review or approval by a third party;
- All options available to the buyer or lessee in connection with continuation, termination, or transfer of the agreement in the event that the real property to which the system is affixed is transferred;
- All assumptions used for any savings estimates that were provided to the buyer or lessee; and
- All requirements established by the Public Regulation Commission that affect the buyer or lessee’s system.
In addition to the disclosure requirements, the DGDA provides new requirements for the promotion of distributed generation systems. If a promotional or sales document states that a distributed generation system will result in certain financial savings for the buyer or lessee, under the DGDA that document shall provide assumptions and calculations used to derive those savings. The same requirement exists for those promotion or sales documents that state the system will result in energy savings. Importantly, the DGDA does not apply to an individual or company that negotiates an agreement for the sale, financing, or lease of an existing system that is affixed to a piece of real property being sold or transferred.
The House and Senate passed a Joint Memorial, Senate Joint Memorial 21, which encourages New Mexico state agencies to support the development of an Energy Road Map for New Mexico, building on the 2015 energy plan developed by the Energy Minerals and Natural Resources Department. Moreover, both the House and Senate passed Memorials (House Memorial 95 and Senate Memorial 127) directing the representatives of the State of New Mexico interim committee dealing with water and natural resources to study the impact of electric power rates on the energy sector and economic development opportunities in the state. These Memorials were especially concerned with the impact electricity rates have on oil and gas production in the state. The committee tasked with this study must report its findings before December 1, 2017.
Bills that did not pass potentially would have had a large impact on New Mexico’s renewable energy industry. Significantly, House Bill 61, which would have extended the Solar Market Development Tax Credit to 2025 and increased the annual cap on solar market development tax credits to $5,000,000, lost a vote in the Senate after passing the House. The largest criticism of the bill was that it only provided tax credit to parties that could afford installing solar panels. A related bill, House Bill 193, which would have made the solar market development tax credit permanent, died in committee.
Finally, Governor Martinez vetoed Senate Bill 227, which would have required New Mexico’s General Services Department to adopt rules and issue Requests for Proposals to implement energy efficient and renewable energy improvements to state facilities.