February 8, 2019

Energy bill seeks to aid switch from coal to renewables

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Gov. Michelle Lujan Grisham and several environmentalist groups on Thursday praised legislation aimed at ensuring the shuttering of the coal-burning San Juan Generating Station near Farmington and establishing ambitious targets for pushing New Mexico toward more reliance on renewable energy sources.

The bill is intended to soften the financial hit both to the community surrounding the aging power plant and to Public Service Company of New Mexico, the state’s largest utility and majority owner of the plant, which is a major source of employment in Northwestern New Mexico.

State Sen. Jacob Candelaria, D-Albuquerque, on Thursday introduced the 83-page Energy Transition Act, which proposes to allow PNM to recover investments through selling bonds that would be paid off with a new “energy transition” charge for customers.

It also seeks to provide funds to assist and re-train workers who lose jobs from the shutdown and sets a 2030 deadline for investor-owned utilities and rural electric co-ops in the state to derive 50 percent of their power from renewable sources such as solar and wind energy.

“The bill lays out the road map that will lead New Mexico from a fossil-fuel-based economy to a green economy,” Candelaria said in an interview. “And keeping with the governor’s promise during the campaign, this bill lays out an aggressive 50 percent portfolio standard by 2030, then by 2045 puts New Mexico on the path to 80 percent renewable portfolio standard, which would make New Mexico the leader in the nation.”

The state Public Regulation Commission would have final say over key elements of the plan, such as the proposed fees.

The governor called the bill a “robust package.”

Candelaria last year sponsored a bill that also was aimed at allowing PNM to recoup its losses on the San Juan plant. That bill was shot down in a Senate committee.

Among those supporting the current bill are such groups as The Sierra Club, Conservation Voters New Mexico, Western Resource Advocates and the San Juan Citizens Alliance. Also signing on are the New Mexico Building and Construction Trades Council and progressive political groups including ProgressNow New Mexico and Center for Civic Policy.

Steve Michel of Western Resource Advocates said the bill “provides a path for New Mexico to move away from fossil fuels, calling for zero carbon emissions by 2045. That’s a really big deal.”

A PNM spokesman said in a written statement: “Our new governor, the sponsors of this bill, and PNM recognizes that these are changing times. We all agree that our environmental and economic future for all New Mexicans is at stake. The Energy Transition Act takes PNM out of our comfort zone, and challenges PNM to take bold action during this historic and unprecedented time in this global energy transition.”

Asked whether the utility is backing the bill despite it being out of the company’s “comfort zone,” spokesman Ray Sandoval declined to comment.

But at least one Farmington legislator who backed last year’s version of the bill, House Republican Whip Rod Montoya, definitely is not on board with Senate Bill 489.

“Under the governor’s plan, nearly 1,500 displaced workers will have to compete for less than 50 permanent renewable jobs,” Montoya said Thursday through a spokesman. “Fifty renewable jobs will not replace over $20 million in local revenue, not to mention another $30 million to state government. This plan shows a callous disregard for workers and their families.”

There also is potential opposition from New Energy Economy, a Santa Fe-based clean-energy group that fought hard against last year’s bill. That group is taking a wait-and-see stance.

Executive Director Mariel Nanasi said Thursday her group is still reviewing the bill, “but if it includes a 100 percent bailout for PNM, New Mexicans have spoken and they’re emphatically opposed. Why should all the lost earnings, clean up costs and worker severance issues be paid by ratepayers without PNM contributing a penny to their bad business decisions?”

Candelaria said his bill recognizes that a transition to a “green economy” is going to be difficult for a lot of communities that have relied upon extractive and fossil-based industries. He said the proposal provides funds for economic redevelopment for the Four Corners region, including “tens of millions of dollars” to “protect and transition workers” who lose their jobs.

Besides the inclusion of the renewable portfolio standards, Candelaria said the new bill differs from his 2018 legislation in that it doesn’t say anything about ownership of replacement energy sources. “Last year’s bill said that the replacement energy would be owned by PNM,” he said.

SB 489 would mandate that any replacement energy sources be located in the Central Consolidated School District in the Farmington area, which, Candelaria said, would mitigate the loss of property tax revenue to schools.

The bill has been assigned to two Senate committees: Conservation, and Corporations and Transportation.