January 27, 2023

Senate Conservation Committee discussion focuses on electric grid


Three bills focused on the transition to clean energy cleared the Senate Conservation Committee on Thursday.

Two of those bills were sponsored by Sen. BIll Soules, D-Las Cruces. Those include removing the cap on the size of solar arrays that a person can install on their house and prohibiting new fossil fuel power plants as replacement resources. The other bill was presented by its sponsor Sen. Jerry Ortiz y Pino, D-Albuquerque, and aims to help develop geothermal energy resources in New Mexico.

No new fossil fuels

Soules introduced Senate Bill 74 by dispelling the myths that he said surrounds it. 

“It does not take any fossil fuel generation offline that is currently there,” Soules said.

He said that the fossil fuel resources currently on the system are adequate to balance renewable resources that are coming onto the grid. Additionally, Soules said if new fossil fuel plants were built, there are concerns that new technologies surrounding battery storage and renewable energy could make the fossil fuel obsolete, leading to what is known as stranded assets. A stranded asset is a generating facility that is closed prior to the end of its useful life and often prior to the utilities recouping investments into that facility. That means the customers continue to pay for the facility that is no longer benefiting them.

SB 74 would allow replacement resources such as solar, wind, biomass, geothermal or hydropower. It was amended in the committee to also include nuclear power.

Sen. Steve Neville, R-Farmington, opposed the legislation. He said that the Energy Transition Act that passed in 2019 allowed utilities like the Public Service Company of New Mexico to recoup past investments into coal-fired power plants that close, but did not allow the City of Farmington to do the same thing. He said Farmington will likely need to replace its share of power from the San Juan Generating Station with natural gas.

SB 74 passed on a 5-2 vote following the amendment to add nuclear power. Sen. David Gallegos, R-Eunice, and Neville voted against it. It now heads to the Senate Tax, Business and Transportation Committee.

Removing the cap on solar array size

Senate Bill 56 would remove the cap on distributed generation capacity. Distributed generation is power that the customer generates at their house or business. Excess energy from those customers can be placed back onto the grid.

This is most commonly seen when customers have solar arrays to power their homes.

Current state law caps the amount of distributed generation a customer can install at 120 percent of their electricity usage.

But, Soules said, if a customer is anticipating using a lot more electricity in the future—for example if they are purchasing an electric vehicle—they could want to install more solar capacity. The law would prevent them from doing so because it is based on previous year’s usage.

Kit Carson Electric Cooperative, which provides 100 percent solar power to customers on sunny days, was one of the entities that expressed concern about the bill, stating that it does not have the storage capacity to handle large amounts of distributed energy.

The New Mexico Public Regulation Commission expressed concerns in the fiscal impact report that it could raise the costs that people without distributed generation have to pay. This is because utilities may have to make modifications or upgrades to their system to accommodate larger amounts of distributed energy.

Jim DesJardins, representing the Renewable Energy Association of New Mexico, said this bill is important as electrification of buildings expands.

“This rule of 120 percent of historical usage has been kind of a problem for a while, but it’s becoming increasingly apparent that this is going to be an unnecessary barrier to having solar on our homes and businesses,” he said during public comment.

DesJardins addressed concerns about safety related to increasing distributed generation. He said the interconnection rule that is currently in place and is being amended addresses that.

Soules said the rule when first adopted made it so utilities were not forced to buy back large amounts of electricity from customers with solar arrays.

He said when he first installed solar panels on his house, the utility was paying him 12 cents for each kilowatt hour he sent back to the grid. That rate has decreased with time.

“There’s no advantage to somebody to put in a large system unless they plan to use that much electricity directly on their…household,” he said.

Soules said people are unlikely to recoup the cost of putting in a huge system to generate power.

The bill passed on a 7-1 vote with Gallegos voting against it. It now heads to the Senate Tax, Business and Transportation Committee.

Geothermal power development

There are three ways that SB 8 aims to develop geothermal in New Mexico. The first is an allocation of $500,000 to the New Mexico Institute of Mining and Technology for a center of excellence. New Mexico State University would collaborate with New Mexico Tech.

The second way is an allocation of $600,000 to the Energy, Minerals and Natural Resources Department’s Energy Conservation and Management Division to assist in administering laws and rules related to geothermal and to oversee a geothermal resources revolving loan fund. Ortiz y Pino said this would allow for additional staff to focus on geothermal.

The bill would create this revolving loan fund with an initial $10 million appropriation in fiscal year 2024 to study “the costs and benefits of proposed geothermal resource development projects approved by EMNRD” and another $15 million appropriation in fiscal year 2024 to provide “revolving loans to political subdivisions of the state, state universities, Indian nations, tribes or pueblos, nonprofit organizations, and private entities for financing geothermal resource development projects approved by EMNRD,” according to the fiscal impact report.

SB 8 has a bipartisan list of sponsors. In addition to Ortiz y Pino, Sen. Pat Woods, R-Broadview, Sen. Ron Griggs, R-Albuquerque, and Rep. Patricia Roybal Caballero, D-Albuquerque, are sponsors.

“We know that the wind doesn’t always blow and the sun doesn’t always shine, but the earth is always hot and if we’re able to tap the heat of the earth itself we can complement the other two renewable energy sources and provide New Mexico with 100 percent renewable energy all the time,” Ortiz y Pino said.

The bill passed on a unanimous 8-0 vote and now moves to the Senate Finance Committee.