January 6, 2022

Group of legislators request study about creating government-run electric utilities

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A group of 16 state legislators have asked the New Mexico Public Regulation Commission to study what it would take for governments to acquire electric utilities, but PRC officials say that may not be within the regulatory agency’s authority.

The PRC issued an order on Jan. 5 asking the legislators leading the effort, state Sen. Liz Stefanics and state Rep. Andrea Romero, D-Santa Fe, to either attend next week’s meeting or to send someone to present to the commission on their behalf about the proposed study. This granted a request the Legislators made in the petition filed on Dec. 21.

Stefanics, a Democrat from Cerrillos, told NM Political Report that, while the petition mentions a state-run utility, the study is not necessarily focused on what it would take to create a state-owned electric utility, but rather what barriers and opportunities there are for political subdivisions, including municipalities and counties, to own electric utilities serving their communities.

She gave the example of Rio Communities, which generates surplus solar electricity and is tied into Public Service Company of New Mexico’s infrastructure.

“They said to me in a recent meeting, ‘we are actually positioned to create a public utility if we knew what we needed to and if we had the information available to us,’” she said.

Stefanics also said that when she was on the Santa Fe County Commission, the county considered the idea of acquiring the electric infrastructructure and operating its own utility. Stefanics served on the Santa Fe County Commission from 2009 until 2016.

New Energy Economy, an advocacy group that has been active in utility matters, filed the petition. The petition requests that the study look at the costs, benefits and pathways to publicly-owned power and evaluate whether the implementation of a state-run utility will protect public interest, reduce and stabilize rates, generate revenue for the state, lead to 100 percent renewable energy with storage and enhance economic benefits in local communities.

While most people in the state are served by one of the three investor-owned utilities or a rural electric cooperative, NEE Executive Director Mariel Nanasi said there are half a dozen communities that own their own electric utility. Governments that own their electric utilities in New Mexico include Los Alamos County and the municipalities of Raton, Farmington, Aztec, Gallup and Truth or Consequences. There are also several Tribal-owned utilities that provide electricity to customers in the state, including Navajo Tribal Utility Authority and the Pueblo of Acoma Utility Authority.

Picuris Pueblo in Taos County completed a solar array in 2017 that not only provides the entire Indigenous community with electricity but also brings revenue into the Pueblo as the nearby Kit Carson Electric Cooperative purchases some of the generated power. 

State Rep. Derrick Lente, a Democrat from Sandia Pueblo, highlighted this in a statement following the filing of the petition in December.

“Solar, wind and batteries are disrupting coal, nuclear, oil, and gas. Will we be able to deploy these technologies rapidly enough to avoid dangerous climate change?” he said in the statement. “Will we be able to decentralize both the technologies and the control over and ownership of these technologies so we don’t repeat the mistakes of the past and concentrate wealth and disenfranchise whole segments of our populations. What if we could scale what Picuris Pueblo has done for all Pueblos? This study will evaluate the central role energy has on natural systems and human systems and our economy, that’s why I support this analysis.”

Nanasi said that owning electric utilities can provide communities with a variety of benefits and that the revenues generated by the utilities would go back into the community rather than to shareholders.

While the PRC regulates the investor-owned and rural electric cooperatives, it does not oversee government-owned electric utilities. 

PRC General Counsel Russell Fisk questioned if the state regulatory agency has the authority to conduct the study. He said legislative action may be required. Furthermore, he said the PRC does not have the resources to conduct the study. 

“The Commission further knows that its resources, both budgetary and personnel, are currently quite strained in meeting its statutory duties,” Fisk said.

Stefanics said the proponents believe private foundation money could be secured to support the PRC as it conducts the study.

“We understand that they might not have within their budget and other staffing the capability to take on new responsibilities,” she said. 

Stefanics said a study is needed to identify if legislative changes are needed to facilitate community efforts to acquire and manage their own electric utilities.

“Secondly, the study would help identify all the pros and cons that local political subdivisions could think about or would need to think about in terms of putting together any plans. It would be probably a very expensive venture to get involved in a public utility,” she said.

Stefanics said the study could also look at using state trust lands to generate renewable energy that the State Land Office could use as a revenue source.

PRC Commissioner Cynthia Hall said the study request may have gone to the PRC because of its expertise.

“My understanding is we’re just viewed as the agency with the most appropriate expertise to see such a study is conducted properly,” she said, adding that without funding the PRC will not have the resources to conduct a study.

Nanasi also said that the PRC is the most appropriate agency because it has the expertise in utility matters.

Stefanics emphasized that she is not asking for the study to put large utilities like PNM out of business. Instead, she said “I am doing this so that all the entities that might be interested have a pathway for their future.”