SANTA FE, N.M. (AP) — The state House passed a bill Friday that gives large businesses a discount on electricity rates, a move that would lead to higher costs for families and small businesses but that supporters say would draw investment to New Mexico.
Lawmakers passed the bill in a 47-17 vote, The Santa Fe New Mexican reported (http://bit.ly/M2QBoe ).
House Bill 296 would allow utility companies to make back lost costs by increasing rates for households and small businesses. Twenty-nine other states offer similar discounts for larger businesses.
Supporters say rate reductions will draw more companies to the state and boost hiring.
“We just want to attract businesses that we think are best for our economy, that hire in state and sell out of state,” said Rep. Antonio “Moe” Maestas, an Albuquerque Democrat sponsoring the bill.
Other lawmakers, utility regulators and advocates say the bill unfairly burdens consumers with higher electricity costs.
Rep. Brian Egolf, a Democrat, said utilities should find another way to offer discounts, such as charging more when a contract with a company is renewed.
“Why is rate recovery necessary?” Egolf said during a floor debate. “Shouldn’t the utility bear the risk, instead of passing it to other customers?”
Under the bill, only Public Service Company of New Mexico, the largest power utility in the state, and El Paso Electric would be able to offer the discounted rate. Both utilities would be able to negotiate separate contracts with large companies with no limit to the rate discount. The bill mandates a cap for the amount of power they can sell at a discounted rate to 5 percent of the total retail power sold.
There would be no limit to the amount residential and small-business customers would be asked to pay to help subsidize the discounts.
To qualify, a business must meet several criteria. They include hiring at least 20 people at a salary of at least $40,000 each, committing to staying in New Mexico for at least 10 years and investing at least $5 million in fixed assets.
Companies would only have the discount for seven years.
Similar legislation has been approved in the Senate by two committees and now awaits consideration from the state Senate Judiciary Committee.