Energy Transition Act

2019 Top Stories #5: The Energy Transition Act’s rocky start

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When Gov. Michelle Lujan Grisham signed the Energy Transition Act into law in March, she called the law “transformational” and “a really big deal.”

“The Energy Transition Act fundamentally changes the dynamic in New Mexico. This legislation is a promise to future generations of New Mexicans, who will benefit from both a cleaner environment and a more robust energy economy with exciting career and job opportunities,” she said at the time in a statement. But the first attempt to implement the new law hasn’t been smooth. The investor-owned utility PNM announced in 2017 that it planned to close the San Juan Generating Station, a coal-fired plant located outside Farmington. But PNM didn’t formally submit to the Public Regulation Commission (PRC) its consolidated application for abandonment, securitization and replacement power for the power plant until July 2019, weeks after the Energy Transition Act had been signed into law.

Energy Transition Act

Supreme Court declines to rule on constitutionality of ETA

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The New Mexico Supreme Court denied a request to determine the constitutionality of the Energy Transition Act (ETA) on Tuesday. The decision was released without an opinion. In August, the advocacy nonprofit New Energy Economy (NEE) filed a writ of mandamus asking the Court to rule on whether portions of the ETA are unconstitutional. The writ alleges that wording in the ETA removes the Public Regulation Commission’s (PRC) regulatory oversight of Public Service of New Mexico (PNM) and proposed rate increases. New Energy Economy’s executive director, Mariel Nanasi, announced the court decision at a panel discussion in Santa Fe Tuesday evening. 

“We believe the ETA is unconstitutional, especially in regards to its eviscerating the regulatory authority [of the PRC],” Nanasi said.

Cynthia Hall

Dysfunction at the PRC puts New Mexico’s clean energy plan at risk

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Dysfunction and a lack of expertise within the New Mexico Public Regulation Commission (PRC) threaten to undermine the state’s ambitious plan to flip the switch from coal to reenewable power. 

The Energy Transition Act — the centerpiece of Gov. Michelle Lujan Grisham’s agenda to rein in greenhouse gas emissions — phases out coal, turbocharges solar and wind development, and provides funding to retrain displaced coal plant and mine workers. It has been hailed as one of the strongest climate measures in the country. 

But six months after Lujan Grisham signed the bill into law, its success appears jeopardized by the very regulatory body charged with overseeing its implementation. 

The powerful commission must vet every aspect of the plan: the closure of the San Juan Generating Station coal plant; the complex financing to pay for decommissioning and worker assistance; and every new energy project that will provide the replacement power. But when the first proposals came before the PRC in July, the commission chose to ignore the new law, leaving the state’s energy transition in limbo. The unusual move has sparked a political furor, pitting the PRC against the governor and Legislature and leading to calls for impeachment of three of the commissioners as well as a proposal by the governor to convert the PRC from an elected body to an appointed one. 

The law’s supporters say the commission’s handling of the plan reflects deep dysfunction that could slow the state’s renewables ramp-up and jeopardize aid for displaced workers. Lujan Grisham says she finds the PRC’s actions “baffling” and suspects that long-standing tensions between the commission and Public Service Co.

Energy Transition Act

Suit alleges ETA a ‘deregulation law’ for PNM

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A group of organizations filed a lawsuit in state Supreme Court this week that alleges the Energy Transition Act is a deregulation law for PNM, and are challenging provisions in the law as unconstitutional. The suit from New Energy Economy, a Santa Fe-based advocacy nonprofit, and six other groups claims the ETA removes some of the authority given to the Public Regulation Commission (PRC) to regulate the Public Service Company of New Mexico (PNM) and its proposed rate increases associated with its fossil fuel assets. PNM is an investor-owned utility that operates as a monopoly in parts of New Mexico. As a utility, the company has an obligation to serve its customers—the ratepayers—in the most efficient manner and at the lowest possible cost. But as a publicly-traded company, PNM also has an obligation to its shareholders to generate profit.

News

Lujan Grisham signs bill to transition NM to renewable energy

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Friday, Gov. Michelle Lujan Grisham signed into law a sweeping bill that bumps the state’s use of renewable energy. The new law sets a standard to produce 50 percent of the state’s energy through renewable sources in the next ten years and 80 percent within the next 20 years. Beyond the push for more renewable energy, the law also allows the Public Service Company of New Mexico (PNM) to issue bonds at lower interest rates to pay off debts associated with a coal powered plant in the northwest corner of the state. It also establishes a $20 million fund to help workers and communities that will be affected by the shutdown of the San Juan Generating Station. In the Roundhouse rotunda, where Lujan Grisham signed Senate Bill 489, lawmakers and advocates said the governor was relentless in getting the bill passed through the Legislature with as few changes as possible.

San Juan Generating Station

Energy bill’s passage portends end of coal era in NM

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The Legislature has moved to Gov. Michelle Lujan Grisham’s desk a controversial bill designed to dramatically increase the amount of renewable energy used to produce electricity in New Mexico while also helping the Public Service Company of New Mexico recoup its investments in the coal-burning San Juan Generating Station near Farmington. Following a three-hour debate Tuesday, the House passed Senate Bill 489 by a margin of 43-22. It was a mostly party-line vote, with almost all Democrats in favor of the bill and almost all Republicans voting against it. The measure goes now to Lujan Grisham, who has enthusiastically supported it. How PNM’s electrical rates will be affected was a major point of contention during debates over the bill in the Legislature.

Conservation Voters New Mexico

Major shift to renewable energy advances in Senate

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Backers of the controversial Energy Transition Act — which is meant to ensure the shuttering of a massive coal-burning power plant in San Juan County and push New Mexico toward more reliance on renewable energy — won a victory Saturday when a state Senate committee gave it a positive recommendation following a four-hour debate. The Senate Conservation Committee voted 5-3 to give Senate Bill 489 a “do-pass” recommendation. Last year, the same committee killed a similar proposal. “This transition to renewable energy will not be easy,” said the bill’s primary sponsor, Sen. Jacob Candelaria, D-Albuquerque. A major purpose of the legislation, he said, is “to lay out a just transition for impacted communities to move away from coal and towards a green energy economy.”

2019 Legislative Session

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.