Washington (Platts)--27Feb2008

Electric and gas utilities in New Mexico must begin meeting new energy
efficiency standards under legislation that Governor Bill Richardson is
expected to sign into law later Wednesday that also would allow financial
incentives for utilities on cost-effective programs.

The law (HB 305) would call for electric utilities in New Mexico to meet
a 5% energy efficiency savings from 2005 electricity sales -- which is being
used as the baseline figure -- by 2014 and a 10% savings by 2020.

If an electric utility demonstrates that it cannot meet the standards,
the measure would allow the New Mexico Public Regulation Commission to set
alternative energy efficiency requirements.

The commission, under the bill, also must develop incentives by which
utilities can "earn a profit on cost-effective energy efficiency" programs
that are considered "financially more attractive" than building new electric
power plants. Utilities must conduct studies to determine energy efficiency
measures that are cheaper than building new capacity.

New Mexico Governor Bill Richardson, a Democrat, is scheduled to sign the
legislation at 1 pm MST (2000 GMT).

--Cathy Cash, cathy_cash@platts.com