January 17, 2021

Renewable energy bills on tap for the 2021 session


The Legislature will be considering a handful of renewable energy-related legislation in the upcoming session. Here are some of the bills we’ll be watching. 

Clean fuel standard: Gov. Michelle Lujan Grisham announced that a clean fuel standard is one of her legislative priorities for the upcoming 60-day session. The fuel standard would only apply to the producers of fuel, not retailers such as gas stations. The fuel standard would reduce the state’s transportation emissions by 230,000 metric tons of CO2 annually, the governor said in a press release. 

Local Choice Energy Act: Las Cruces Democratic state Senator Jeff Steinborn prefiled a bill that would enable communities to source their own electricity providers. Steinborn, who introduced similar legislation in 2019, said the bill would inject more competition into electricity markets. 

“The reason for it is, it’s just good old-fashioned free market,” Steinborn said. “We have monopoly energy jurisdictions in the state of New Mexico of one provider that’s kind of forced upon us. That lack of choice, unfortunately, I believe, causes us to have more expensive energy than what the free market might provide—and also less environmentally friendly energy.”

The bill would enable local government jurisdictions, such as municipalities, to develop local choice energy programs and solicit bids from competing energy providers. Steinborn said he thinks the bill has the potential to increase renewable energy in the state’s grid. 

“Because of the very affordable cost of renewable energy, and the desire for that type of energy, I believe that if we were to put that to the free market to create competition, then communities would end up finding new opportunities that save money and produce a higher rate of renewable energy than we are currently using now.”

The bill would require any local government that intends to become a local choice energy provider meet the state’s renewable portfolio standard requirements, which includes steadily increasing the share of renewables in electricity generation until it reaches 100 percent in 2045.

But, he added, communities could also set their own renewable goals. 

“A community could say, we were looking for a provider that will provide at least 80 percent of our power through renewable energy, for example,” he said. 

The bill would not require any new transmission lines to be built, but rather utilize transmission lines already in place to transport energy sourced from different providers. 

“The transmission providers would still be the transmission providers who would transmit the energy to your home or to your businesses. It’s just the producer of the energy that can change,” he said. 

Two bills tackle Energy Transition Act: Albuquerque Democratic Senator Bill Tallman and Democratic Senator Liz Stefanics of Cerrillos prefiled a bill that would apply what the two have called “surgical” amendments to the Energy Transition Act (ETA) to reinstate the Public Regulation Commission’s (PRC) ability to regulate PNM rate increases related to plant abandonment costs. The bill comes as the investor-owned PNM applied to exit the coal-fired Four Corners Power Plant, following the utility’s exit of the San Juan Generating Station, which is planned for 2022. 

Clean energy advocacy nonprofit New Energy Economy and others have criticized a provision in the ETA that states the PRC is required to allow “recovery of any undepreciated investments or decommissioning costs by a utility.” 

Mariel Nanasi, New Energy Economy executive director, previously told NM Political Report that the provision essentially enables PNM to increase rates to pay for costs associated with undepreciated investments or decommissioning costs without oversight from PRC. 

“New Mexicans have only one shield against monopoly predation and that’s review and regulation by the PRC,” Nanasi said at the time. “That constitutional protection cannot be bargained away by legislators, no matter how noble their overall goals.”

Las Cruces Democratic Sen. Bill Soules prefiled a separate bill that would tweak the securitization provisions of the ETA. 

Soules told NM Political Report the bill, named the Ratepayer Relief Act, would enable other utilities to use the same financial mechanisms of securitization afforded to PNM under the ETA. 

“Securitization is just a tool that the PRC should have, and they don’t have by statute,” Soules said. “It gives them an ability—after they determine what the value to be securitized is—to set up the financing mechanisms so that ratepayers can get the lowest rates.”

Soules added that the ETA’s securitization provision only applies to PNM and the power plants in the Four Corners area. 

“So because of that, there is no law that affects El Paso Electric when they’re trying to decommission gas plants, or other power plants in other places.”

Soules also prefiled a second bill that would prohibit new fossil fuel generation facilities, including gas plants, from being built in the state. Soules said the bill is needed because fossil fuel generation facilities are “going to be obsolete before they’re at the end of their life.”

Another stab at the EV tax credit: Sen. Bill Tallman prefiled the electric vehicle tax credit bill, after the Legislature nearly passed a version of the same bill during the 2020 legislative session. The bill would create personal income tax credits for New Mexico residents who purchase or lease plug-in hybrid vehicles or 100 percent battery electric vehicles. The bill provides a $2,500 tax credit for residents whose annual income is above $50,000; but the tax credit jumps to $5,000 for residents who make less than $50,000.  

During the last legislative session, both the House and Senate passed two nearly identical bills for the tax credit, but the two chambers were unable to reconcile the bills before the session ended.