The New Mexico legislature passed a bill that requires the state's utilities to generate at least 5 percent of their electricity from renewable sources by 2006. The standard will increase by 1 percent per year through 2011, when it will reach 10 percent. The bill, signed by Governor Bill Richardson on March 4, 2004, placed into statute a rule that the Public Regulation Commission (PRC) had approved in late 2002. The new law directs the PRC to determine a reasonable cost threshold for compliance with the standard by December 31, 2004. Public utilities will not have to purchase renewable energy that would exceed the reasonable cost threshold. In addition, the law charges the PRC with establishing a system of tradable renewable energy certificates. The existing PRC rule also requires public utilities to offer its retail customers the option of purchasing, for a price premium, renewable energy in addition to energy required by the renewable portfolio standard.