WILDFIRE FUND ACT

HB0171

HOUSE BILL 171

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Linda Serrato
and
Peter Wirth
and
Javier Martínez

and
Christine Chandler

AN ACT

RELATING TO ELECTRIC UTILITIES; ENACTING THE WILDFIRE FUND ACT;
PROVIDING FOR THE COLLECTION OF SURCHARGES ON ELECTRIC SERVICE;
ESTABLISHING THE WILDFIRE FUND; REQUIRING NOTICES OF INTEREST;
PROVIDING ELIGIBILITY REQUIREMENTS, INCLUDING WILDFIRE
MITIGATION PLANS; CREATING THE POSITION OF SERVICE
INFRASTRUCTURE SAFETY ENGINEER IN THE PUBLIC REGULATION
COMMISSION; CREATING THE SERVICE INFRASTRUCTURE SAFETY BUREAU
IN THE PUBLIC REGULATION COMMISSION; REQUIRING REPORTS; MAKING
AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1.
[
NEW MATERIAL
] SHORT TITLE.--Sections 1
through 10 of this act may be cited as the "Wildfire Fund Act".

SECTION 2.
[
NEW MATERIAL
] DEFINITIONS.--As used in the
Wildfire Fund Act:

A. "administrator" means the administrator of the
fund;

B. "commission" means the public regulation
commission;

C. "covered wildfire" means a wildfire ignition
that is caused by a participating electric utility;

D. "electric utility" means a business that
operates service infrastructure to generate, transmit or
deliver electric power to a customer;

E. "eligible claims" means claims for damages
against a participating electric utility resulting from covered
wildfires;

F. "fund" means the wildfire fund;

G. "participating electric utility" means an
electric utility that is eligible for disbursements from the
fund;

H. "risk estimate" means the estimated average
annual financial liability risk for a participating electric
utility from covered wildfires;

I. "service infrastructure" means an electric
utility's combined electricity generation and transmission
infrastructure;

J. "surcharge" means a per-megawatt fee on electric
service collected by a participating electric utility for
deposit in the fund;

K. "total risk estimate" means the combined risk
estimates for all participating electric utilities; and

L. "wildfire" means a fire originating from an
unplanned ignition such as lightning, geothermal eruption, an
unauthorized or accidental human-caused fire or a prescribed
fire that escapes the prescribed burn area and is declared a
wildfire by the federal, state or tribal agency that has
jurisdiction over the land where the fire occurs.

SECTION 3.
[
NEW MATERIAL
] WILDFIRE FUND--ESTABLISHMENT--DETERMINATION OF SURCHARGE--DISBURSEMENT.--

A. The commission shall establish a "wildfire fund"
to reimburse eligible claims paid by participating electric
utilities for damages resulting from covered wildfires.

B. The fund shall be financed by a surcharge on
electric power services and collected by participating electric
utilities. Money deposited in the fund is not public money,
and the administration of the fund is not subject to the
provisions of law regulating public funds.

C. In accordance with the Procurement Code, the
commission shall contract with a neutral third party who is not
an employee or a contractor for an electric utility in New
Mexico to be the administrator of the fund. The administrator
shall have a minimum of five years' experience in:

(1) the operation of service infrastructure;

(2) the development of wildfire mitigation
plans and public safety power shutoff policies for service
infrastructure; and

(3) risk assessment for service infrastructure
in the fire insurance industry.

D. Under the supervision of the commission, the
administrator shall:

(1) administer the fund; and

(2) review and approve requests from
participating electric utilities for disbursements from the
fund.

E. The administrator may be compensated from the
fund; provided that such compensation shall not exceed one
million five hundred thousand dollars ($1,500,000) in a
calendar year.

SECTION 4.
[
NEW MATERIAL
] ELIGIBILITY.--To be eligible
for a disbursement from the fund, an electric utility shall:

A. have a wildfire mitigation plan approved by the
administrator and be in substantial compliance with that plan;

B. agree to collect a surcharge determined by the
administrator to be sufficient to grow the fund by ten percent
of the average total risk estimate for the succeeding ten
calendar years; and

C. have been a participating electric utility for a
minimum of three consecutive years prior to the disbursement.

SECTION 5.
[
NEW MATERIAL
] WILDFIRE MITIGATION PLANS--STANDARDS--NOTICE OF INTEREST--CALCULATION OF RISK ESTIMATES
AND SURCHARGES.--

A. On or before November 1, 2026, the commission
shall promulgate a rule setting the standards for wildfire
mitigation plans for service infrastructure. The rule shall
include standards for monitoring, notice and response
protocols, public safety power shutoffs, service infrastructure
integrity and vegetation management.

B. On or before December 1, 2026, and on or before
September 1 in each subsequent year, an electric utility may
submit a notice of interest to the administrator signifying the
electric utility's intent to participate in the fund in the
succeeding calendar year. Such notice shall include a map of
the electric utility's service infrastructure in New Mexico,
the history of the electric utility's wildfire liability
stemming from that infrastructure over the previous ten years,
the electric utility's proposed wildfire mitigation plan and
other information about the infrastructure required by the
administrator.

C. On January 1, 2027, and on or before January 1
of each subsequent year, based on the electric utilities that
have submitted a notice of interest in accordance with this
section, the administrator shall determine:

(1) a risk estimate for the succeeding ten
calendar years for each electric utility that has submitted a
notice of interest and a total risk estimate for the electric
utilities that have submitted a notice of interest based on:

(a) the wildfire liability histories
submitted by those electric utilities; and

(b) the estimated reductions of risk
created by the wildfire mitigation plans submitted by those
electric utilities; and

(2) the surcharge for each participating
electric utility as required so that the cumulative surcharges
paid by all participating electric utilities will grow the fund
by ten percent of the projected average yearly total risk
estimate for the succeeding ten calendar years.

D. For the purposes of calculating the surcharges
required by Subsection C of this section, the administrator
shall create separate surcharge levels based on each fifteen
percent increase in estimated risk represented by an electric
utility above the average risk estimate for all participating
electric utilities.

E. The administrator shall file a copy of the risk
estimates and surcharges required by this section with the
commission and send a hard copy by certified mail to each
electric utility that has submitted a notice of interest
regarding participation. Within fifteen days of receiving the
risk estimates and surcharge requirements from the
administrator, an electric utility wishing to be a
participating electric utility shall submit a formal
declaration of agreement to participate to the administrator in
a format determined by the administrator.

SECTION 6.
[
NEW MATERIAL
] MITIGATION PLANS--SUBMISSION--APPROVAL.--

A. As a prerequisite to becoming a participating
electric utility, an electric utility shall submit a wildfire
mitigation plan for its service infrastructure to the
administrator for approval.

B. The administrator shall approve a wildfire
mitigation plan when the administrator determines that the plan
will achieve a reduction in wildfire risk that incorporates a
balance between the cost of mitigation and the expected
reduction of risk. The administrator may require modifications
to a plan as a condition of approval and shall approve or
reject a plan within ninety days.

SECTION 7.
[
NEW MATERIAL
] BALANCES AVAILABLE AND
DISBURSEMENTS FROM THE FUND.--

A. No disbursements from the fund shall be made
prior to 2030.

B. Starting on January 1, 2030, and on January 1 of
each subsequent year, the administrator shall determine the
percentage of the total risk estimate for the succeeding
calendar year that is represented by the balance in the fund.

C. No disbursements shall be made from the fund in
a calendar year for which the administrator determines that the
balance in the fund is less than thirty percent of the total
risk estimate for the succeeding calendar year.

D. When the administrator determines that the
balance in the fund is at least thirty percent but less than
one hundred percent of the total risk estimate for a calendar
year, the administrator shall determine the amount required to
remain in the fund to allow for a ten percent annual growth
based on the anticipated remittances into the fund for that
year. The remainder of the fund balance after providing for a
ten percent annual increase shall be available for disbursement
in that calendar year.

E. When the administrator determines that the
balance in the fund is one hundred percent or more of the total
risk estimate for a calendar year, seventy percent of the fund
shall be available for disbursement in that calendar year.

F. Only the administrator may make disbursements
from the fund. Disbursements from the fund shall be made
pursuant to invoices:

(1) signed by the administrator and approved
by the commission for payment of the administrator's contract;
and

(2) signed by the administrator for a request
approved by the administrator for distribution by a
participating electric utility.

SECTION 8.
[
NEW MATERIAL
] SERVICE INFRASTRUCTURE SAFETY
ENGINEER AND STAFF.--The commission shall appoint a
professional engineer who shall have at least five years'
actual experience in the design and implementation of wildfire
mitigation plans and public safety power shutoffs for electric
power transmission and generation facilities who shall be
designated the "service infrastructure safety engineer". The
commission shall retain such other personnel as may be
necessary to carry out the provisions of the Wildfire Fund Act.

SECTION 9.
[
NEW MATERIAL
] SERVICE INFRASTRUCTURE SAFETY
BUREAU.--The service infrastructure safety bureau shall assist:

A. the commission in the development of standards
for wildfire mitigation plans submitted pursuant to the
Wildfire Fund Act and review of such plans;

B. the administrator in the development of wildfire
liability risk estimates and wildfire fund balance calculations
required by the Wildfire Fund Act; and

C. the administrator with review of wildfire
mitigation plans submitted by electric utilities.

SECTION 10.
[
NEW MATERIAL
] STATUS OF FUND--REPORTS.--By
October 31, 2027, and by October 31 of each subsequent year,
the administrator shall provide a report to the commission and
to the legislative interim committee tasked with energy and
natural resource issues regarding:

A. the success of the Wildfire Fund Act in reducing
financial risk to participating electric utilities and
increasing the safety of service infrastructure in relation to
wildfires in New Mexico;

B. the balances and the projected sustainability of
the fund; and

C. recommendations to amend the Wildfire Fund Act.

SECTION 11.
Section 62-19-12 NMSA 1978 (being Laws 1998,
Chapter 108, Section 6, as amended) is amended to read:

"62-19-12. COMMISSION--ORGANIZATIONAL UNITS.--The
commission includes the following organizational units:

A. the administrative services division;

B. the consumer relations division;

C. the legal division;

D. the utility division; [
and
]

E. the pipeline safety bureau;
and

F. the service infrastructure safety bureau
."

SECTION 12.
APPROPRIATION.--Two million five hundred
thousand dollars ($2,500,000) is appropriated from the general
fund to the public regulation commission for expenditure in
fiscal year 2027 to hire a service infrastructure safety
engineer and staff. Any unexpended balance remaining at the
end of fiscal year 2027 shall revert to the general fund.

SECTION 13.
EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2026.

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