COMPARING 2019 SECURITIZATION LEGISLATION IN COLORADO, MONTANA, AND NEW MEXICO

The document analyzes the 2019 securitization laws of Colorado, Montana, and New Mexico, which allow utilities to issue ratepayer-backed bonds to refinance investments in early-retired electric plants. It identifies Colorado's legislation as a 'best practices model' due to its extensive consumer protections and public interest requirements, while noting that New Mexico's law is more narrowly focused on a specific utility and plant. Montana's approach is described as falling between the two. The brief highlights key legislative elements such as the ability of commissions to hire independent experts, requirements for quantifying consumer savings, and the use of bond proceeds to mitigate impacts on workers and communities.

• Securitized bonds provide a low-cost capital alternative to higher-cost corporate finance, with potential consumer costs in the 3-4 percent range compared to shareholder returns of 8-11 percent.
• Colorado's 2019 legislation is considered a national best practices model because it provides the strongest ratepayer protections and the most detailed attention to public interest and consumer protection.
• New Mexico's Energy Transition Act is characterized by limited applicability, appearing to be aimed at a single power plant (the San Juan Generating Station) and a specific utility (PNM), with 'hard wired' recoverable dollar amounts that limit commission discretion.
• Montana's legislation is the briefest of the three and allows bond proceeds to be used not only for plant retirement but also for modernized infrastructure and least-cost electric generating facilities.
• Colorado and New Mexico both authorize the use of bond financing to mitigate the impacts of early plant retirements on workers and communities, whereas Montana's law does not address these impacts.
• To ensure the lowest transaction costs, Colorado's law requires that commission-hired consultants and counsel be solely loyal to the commission and free from financial interests in the bonds.
• New Mexico's legislation includes specific carbon dioxide emission limits for generation, requiring an average of no more than 400 pounds per megawatt-hour by January 1, 2023, and no more than 200 pounds by January 1, 2032.
• All three states' laws make the use of securitized bonds voluntary for utilities, ensuring that commissions cannot penalize a utility for choosing traditional ratemaking methods instead.

APA

LEHR, R., & O’BOYLE, M. (2020). COMPARING 2019 SECURITIZATION LEGISLATION IN COLORADO, MONTANA, AND NEW MEXICO. Energy Innovation. https://energyinnovation.org/wp-content/uploads/Securitization-Brief_September-2020.pdf

Chicago

LEHR, RON, and MIKE O’BOYLE. COMPARING 2019 SECURITIZATION LEGISLATION IN COLORADO, MONTANA, AND NEW MEXICO. Energy Innovation, 2020. https://energyinnovation.org/wp-content/uploads/Securitization-Brief_September-2020.pdf.

Wikipedia

{{cite report |last1=LEHR |first1=RON |last2=O’BOYLE |first2=MIKE |title=COMPARING 2019 SECURITIZATION LEGISLATION IN COLORADO, MONTANA, AND NEW MEXICO |publisher=Energy Innovation |date=September 2020 |url=https://energyinnovation.org/wp-content/uploads/Securitization-Brief_September-2020.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{lehr2020comparing, author = {LEHR, RON and O’BOYLE, MIKE}, title = {{COMPARING 2019 SECURITIZATION LEGISLATION IN COLORADO, MONTANA, AND NEW MEXICO}}, institution = {Energy Innovation}, year = {2020}, month = sep, url = {https://energyinnovation.org/wp-content/uploads/Securitization-Brief_September-2020.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }