Here comes the sun: NM lawmakers champion renewable energy

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The large meeting hall at Santa Fe’s Temple Beth Shalom was packed, nearly every seat filled and with more people standing against the walls, listening to speakers at a clean energy conference late last month. When Sen. Mimi Stewart took the mic, she admitted she’d had to illegally park to get there. The first word new Gov. Michelle Lujan Grisham got in after the applause and whoops greeting her arrival was, “Wow.”

“There’s no reason New Mexico can’t be the clean energy leader in the United States,” she declared in the pep talk that followed, and promised to address issues from solar tax credits to increasing renewable energy requirements for utilities, along with a list of others. And to do them fast.

“This moment speaks to that kind of urgency, and we have to collectively make sure that the House and the Senate passes every single measure that allows us to not just have a foothold, but a clear design,” she said, before exiting to a standing ovation.

Renewable energy advocates have a variety of metaphors for how the moment feels: coming back into the sun, breaking the water’s surface and drawing in breath, exiting the Dark Ages. They’re determined to make the most of a new governor and Democratic leadership in the House and Senate to shift New Mexico’s approach to energy.

Despite ranking third in the nation for solar energy potential, just 3.9 percent of the state’s power comes from the sun when that could be one of the cheapest sources available. Wind potential is promising, too. But for the past eight years, lawmakers haven’t been able to see so much as tax credits for installing rooftop solar panels survive both the session and the governor. Legislators proposed increasing the current renewable energy standard, set in 2004 for at least 20 percent by 2020, and those bills withered in committee meetings.

So this year, the legislative session has seen a dizzying slew of ideas seeking to turn New Mexico’s wind and sun into electricity. The flurry of bills offers tax credits for homeowners who make their houses more efficient, permits for subscribers to create solar energy “gardens” so groups of people can own portions of a solar array, and sets a timeline to transition the state to carbon-free power by 2045.

While some legislation continues to push for change within the existing system of a few consolidated sources sending power to homes throughout the grid, other proposals  look to upend that altogether. Their vision is a future of localized, democratized power systems that offer people cheaper electricity and more choice in where it comes from. The question is which bills can cross the finish line.

The governor committed to addressing climate change by signing on to the U.S. Climate Alliance, a coalition of state leaders reducing their carbon emissions to targets set in the Paris Agreement. She issued an executive order directing every state department to curb greenhouse gases.

“When Michelle Lujan Grisham started talking about it, it was quite exciting that she seemed to get it,” says Stewart, D-Albuquerque.

The governor gets that climate change is real and here. It manifests in downward trends in the state’s snowpack and river water levels, as well as in rising temperatures. Already, the average temperature in New Mexico has increased 3 degrees since the 1970s, almost double the global average, David S. Gutzler, University of New Mexico professor and lead author of two Intergovernmental Panel on Climate Change (IPCC) assessments, said at a presentation to the House Energy, Environment and Natural Resources Committee in January. If the temperature continues to climb at a rate of 7 degrees per century, he said, snowpack will get “clobbered.” Then, “it hardly matters what happens to precipitation,” he said. Without snow, the headwaters for the Rio Grande and Colorado River will dry up, and even strong monsoons won’t offset the loss.

While changes in New Mexico won’t arrest global climate change by themselves, the new governor is determined that the state join others in efforts to stem its advance. Renewable energy advocates are thrilled to help.

“A couple years ago, I thought the renewable energy standards I was offering were risky and a hard sell and maybe too much,” says Stewart. “Now, I feel like they’re absolutely necessary.”

Utility-scale change

Stewart fought for a bigger renewable energy mandate in 2017, saw it pass its first committee hearing with a room full of supporters, then hit the Senate Corporations and Transportation committee and die. That committee was chaired then, as it is now, by Sen. Clemente Sanchez, D-Grants. Some members just weren’t comfortable with an 80 percent renewable standard then, Stewart says.

This year, she’s back to it, initially filing a bill to increase the renewable portfolio standard, then throwing her support behind the Energy Transition Act, SB 489, which also would move power companies to solar and wind. It mirrors her legislation on the timeline for transitioning to renewables, but adds provisions to help communities recover from the jobs and tax base that will be lost in San Juan County with the Public Service Company of New Mexico’s plans to shutter its coal-fired San Juan Generating Station. 

San Juan Generating Station

There’s much buzz around the bill’s goal for 100 percent “carbon-free” power by 2045, but it’s an important distinction that, like its predecessors, the measure’s target for renewable energy is at 80 percent. The remaining 20 percent leaves room for nuclear as a “carbon-free” power source. That allows PNM to keep its contracts with Palo Verde Nuclear Generating Station in Arizona, which begin to expire in 2046, and currently supply about 21 percent of electricity. The utility reports the rest of its current power supply as 56.1 percent coal, 12.3 percent natural gas, and 9.7 percent wind and solar.

Renewable portfolio standards are credited with driving down costs for producing wind and solar power by 69 and 88 percent, respectively, since 2009, says Sanders Moore, director of Environment New Mexico. Mandating renewable energy use for utilities helped markets reinforce what lawmakers required, she says. Utility-scale solar and wind now cost a third to half as much as coal or nuclear power, according to an analysis by financial advisory and asset management firm Lazard Ltd.

“The prices will continue to drop, I personally believe, the more the state makes a commitment to renewable energy,” Moore says. “Now wind and solar are cheaper than coal, which seemed impossible at the time.”

PNM has acknowledged that wind and solar costs now “compares very favorably” with traditional power sources but that the company hopes to strike a balance between reliability, affordability and protecting the environment. PNM communications director Raymond Sandoval declined to make someone from the company available for an interview and instead answered questions by email.

“Renewables are now able to compete within the additional resource portfolio standards,” part of that statement from PNM reads. “The discussion now is about how New Mexico can reach 100 percent carbon-free energy, which involves implementing a carbon-free standard rather than continuing to increase the RPS. A number of energy studies show that the quickest and most cost-effective path to carbon-free energy is to implement this carbon-free standard.”

Lawmakers have also been looking to close a loophole that allows utility companies to slow transitions on the basis of cost. Previous legislation left open to debate how much was “too expensive.” This year’s bills give guidance: $60 per megawatt hour, and utilities must submit a plan for reducing those costs.

So far, PNM has not signaled outright opposition.

“PNM recognizes that these are changing times, as does our new governor and the sponsors of the bill, who have not let us forget that what’s at stake is the environment and economic future of New Mexico,” PNM writes in its emailed statements. “The Energy Transition Act takes PNM fairly far out of our comfort zone, which is perhaps exactly where we need to be during this time of historic, global transition.”

Other bills carry some of the same ideas forward independently that the Energy Transition Act bundles together. It could be that the nature of a packaged approach stalls it out.

“There’s too many things they’re trying to do in one bill,” Rep. Candy Spence Ezzell, R-Roswell, said on first glance at the document. It’s 83 pages long. She also takes issue with the idea of moving the mark for utilities, adding, “I think we’re doing them no great favors by saying, ‘Now you have to do this.’”

And, she asks, what’s the plan for decommissioning solar plants and wind farms? The Legislature is reviewing bills around bonding mine reclamation, but there’s nothing similar for renewable plants when they age-out.

House Speaker Brian Egolf, D-Santa Fe, says the Energy Transition Act “is a year-long work of tremendous compromise and collaboration. Literally, every leading environmental and conservation organization in the state, as well as the investor-owned utilities, the co-ops, and now the governor have all come together to support what will make New Mexico the nation’s leader in a transition to renewables and a carbon-free electricity grid.”

Will these timelines work fast enough to slow climate change? The IPCC has estimated that without dramatic reductions in greenhouse gas emissions over the next 12 years, the world faces tipping points beyond which the damage cannot be undone or its progress reversed. The renewable portfolio standard bill and the Energy Transition Act both call for 50 percent increases in renewable power in 11 years.

“We have to square it with the political reality of what we can move,” says Moore. “We need to move even faster, but we also have the reality of that transition.”

Even now, with so many forces seemingly aligned for the Energy Transition Act, some renewable advocates see cause for concern. Mariel Nanasi, who runs the advocacy nonprofit New Energy Economy, says it could stick ratepayers with the bill for decommissioning the San Juan Generating Station. And Ron Flax-Davidson, CEO of PNE (Pure New Energy), a subsidiary of a German company among that nation’s largest wind power developers, says provisions around replacement power sources for the 450 megawatts of power lost with that generating station could lead to the power giant building a natural gas plant, “which obviously continues the same problem.”

“There’s no reason why they should be given a mandate to build their own and own their own gas plant when we can build wind and solar cheaper at other locations,” he says.

Flax-Davidson has spoken to legislators about his frustrations working in New Mexico. His company quickly developed projects in Montana, North Dakota and Oklahoma. It had plans for one near Gladstone, in northeastern New Mexico, but the state’s many rules around utilities and independent power producers hindered progress. Technically, the law allows independent power producers to build plants and sell that power to utilities. In practice, that rarely works out.

“Utilities find ways to build and own their own generating stations and try not to accept independent power producers that are providing PPAs [power purchase agreements], even though we believe we can show the PPAs we can provide are at lower cost,” he says.

The very cheapest power, he argues, would be rooftop solar — because it circumvents the part of the electric bill that pays for transmission costs. And there’s legislation for that, too. Some bills quietly add to the system, and some signal a sweeping change to it.

Localized solutions

Solar power is often pitched as the power you pay for once, and then enjoy a nearly nonexistent electric bill for decades — but practicalities for many homeowners bar them from that option. The Community Solar Act, HB 210, would instead allow people to purchase a share of a solar array of up to 10 megawatts, rather than owning and installing it on their own rooftops.

For example, a group of people, a school or a city department could decide to build a solar array on a nearby vacant lot or parking structure. Subscribers’ electric bills would then reflect a credit for their portion of that array and the power it puts onto the grid. Nineteen other states have or are considering similar laws.

PNM’s Santa Fe County Solar Center is part of the large utility’s portfolio.

Backers say it would make solar more affordable for more New Mexicans — and it mandates the Public Regulation Commission make sure 25 percent of participants are from low-income households.

Supporters include cities, such as Albuquerque, Las Cruces and Santa Fe. In Santa Fe, this bill would allow for converting a former landfill into a solar plant to power city facilities. Staff and lobbyists from the State Land Office, the Sierra Club, Environment New Mexico, Conservation Voters New Mexico, and even a registered lobbyist from Tesla have called on lawmakers to pass the bill.

“There are so many people who have a desire to go solar, but there are also so many limitations — if you live in an apartment, if you have a tree that’s shading part of your house, if you have a roof that’s not designed to face the right direction or that’s generally flat,” says Justin Wilson, director of new markets for the Coalition for Community Solar Access, who traveled from Denver to speak at the bill’s first committee hearing. “First and foremost, this is about giving more customers access to renewable energy.”

The state’s major utilities aren’t thrilled with this idea. Carlos Lucero, a lobbyist for PNM, said during the bill’s first committee meeting it was not well thought out and not in the best interest of customers.

“We know our customers want more options,” he said. “If the intent is more solar, then having a utility either build or contract it will ensure reliability.”

PNM has questioned the safety, reliability and affordability of this system, arguing that the bill lacks checks and balances to protect customers, and processes for interconnections. Lawmakers are concerned utilities will be required to buy excess power and maintain infrastructure to hook those solar arrays onto the grid.

“We potentially would be asking PNM, in working with this, to put themselves out of business and to pay for it, to some degree,” Rep. Rod Montoya, R-Farmington, said in committee discussion of the bill.

Expert witnesses testifying before committees on the bill insist that those who don’t subscribe won’t see bills affected, and that subscribers will pay their fair share to PNM for maintaining power lines.

One step beyond the community solar bill lies the Local Choice Energy Act, SB 374, introduced by Sens. Jeff Steinborn, D-Las Cruces, and Benny Shendo Jr., D-Jemez Pueblo, which takes a crack at upending the grid itself. 

“I’m trying to fundamentally change the system,” Steinborn says. “I think it’s a system that, frankly, doesn’t serve New Mexico.”

The bill would allow municipalities, counties, or Indian nations, tribes or pueblos, or a combination thereof, to compile their energy needs and request bids for providing them electricity. Existing power companies could bid — but if they’re under-bid by, say, a solar energy developer, they couldn’t prevent the coalition of customers from taking that bid. Utilities maintain a “stranglehold” that prevents real market economics from working, Steinborn says, and he’s witnessed that in a decade of work as a lawmaker.

“We have been fighting the utilities every step of the way to, frankly, modernize and get the utilities on the cutting edge of technology,” he says. “What this local choice bill would do is give all of our communities the opportunity to go out to market and purchase the energy that they want at the best price.”

Even if coal came in cheaper and the group was willing to pay more for renewable power on principle, they could. He expects no shortage of battles as the bill heads through committee meetings.

“I will tell you, it’s a very popular idea with citizens because they want the choice, and we’re going to fight to give it to them,” he says.

PNM says this act destabilizes the energy market, and risks undermining environmental and economic goals.

What’s quietly in play with these bills is a broader suggestion of reimaging the wires that electrify homes and businesses. The electric grid anticipates only one direction of delivery: from a centralized power source to consumers. But these bills could fuel a change in that framework allowing for a diversified power system that draws from rooftop solar and solar gardens. PNM could, as has been suggested by advocates, find itself in the business of maintaining infrastructure, rather than powering it.

“It’s going to make the grid cheaper, more responsive and more resilient to any calamity that might befall it as the climate changes and our weather gets different,” explains Ben Shelton with Conservation Voters New Mexico.

Change may be coming, PNM concedes, writing in their emailed statement: “While SB 374 may ultimately represent the energy future of the state, this session, PNM is hoping that the community and the state will first support the transition to sustainable energy before skipping ahead to speculative scenarios for the future.”

For those whose focus lies on that renewable energy horizon, they could see bright promise in making even that much progress.

This story was reported in partnership with the Santa Fe Reporter.