The construction project to build the Kayenta solar farms on the Navajo Nation, shown here in 2018. (Photo from the Navajo Tribal Utility Authority / Navajo Nation)
Most New Mexicans don’t have a say in where their electricity comes from or whether their utility is generating power from fossil fuels or solar panels. Clean energy advocates are trying to change that.
Heading for the legislative session that starts in January, local choice energy legislation is meant to give people in New Mexico the option to stick with the utility already serving them or get their electricity from local providers who could use more renewable energy.
“Right now, our communities don’t have a choice. We don’t have a choice in where energy is generated, or who we buy it from,” said Alysha Shaw, campaign director for Public Power New Mexico. “And so this would allow our communities to have a choice.”
Most people in the state get their power from investor-owned utilities that are required to meet the state’s clean energy standards but often only adhere to bare minimum requirements.
Hundreds of thousands of residents are served by El Paso Electric, Xcel Energy or the Public Service Company of New Mexico (PNM). And PNM announced Monday afternoon it’s seeking a rate increase for residential customers.
So clean energy proponents are trying to push a bill through the Roundhouse in 2023, hoping that local energy providers would offer cheaper rates while boosting renewable sources.
Ty Tosdal, an attorney working on the New Mexico legislation, said local energy providers could also generate some rate competition in a state almost entirely dominated by investor-owned utilities. PNM is the state’s largest utility and has a monopoly over almost the entire state, he said.
“There is currently no competition,” he said. “If this act were passed, customers would have the choice to select an energy provider for the very first time.”
The details of the 2023 legislation are still being hammered out.
Such bills failed to survive previous sessions, dying without much action in committee.
And in other states, similar efforts face opposition from major utility companies that argue such competition wouldn’t be cheaper for customers in the long run.
Advocates are holding an informational Zoom meeting on Wednesday, Dec. 7 at 6 p.m., with the bill’s likely sponsor Rep. Carrie Hamblen (D-Las Cruces). People can register here.
Alison Elliot is the executive director of the Local Energy Aggregation Network, an organization trying to push this kind of legislation nationwide. As things stand, she said, it’s really up to the utilities to decide how much energy they’re pulling from either extractive or renewable industries, as long as they meet standards.
But this bill could change who holds that power, she said.
“As a community, you look at your energy power goals and initiatives, and make the decision,” Elliot said.
The local energy providers would still only have to meet state requirements for clean energy, as privately owned utilities do. But Shaw said those local providers would be better positioned to use renewable energy sources since they don’t have to pull in a certain amount of profit for shareholders like investor-owned utilities do.
About 20% of PNM’s energy comes from renewable sources, according to the utility’s Integrated Resource Plan, though the state’s Energy Transition Act requires that number to gradually increase over the next few decades.
PNM also set a goal to be 100% emissions free by 2040, five years before it’s legally required, according to the company’s website.
How it would work
Even if the bill passes, it would be up to local and tribal governments to roll it out in their communities.
Tosdal said the cities, counties or sovereign nations would need to pass a resolution or similar action to automatically enroll their residents in an energy choice program. Then, the officials would choose which facilities or companies would become the local option.
Because it’s up to local officials to decide whether to enact the legislation in their communities if it passes, not all residents across the state would necessarily be part of this program. Many rural regions are heavily influenced by New Mexico’s booming oil and gas industry.
Already in Farmington, N.M., for example, residents complained that their municipal utility — overseen by elected officials — doesn’t offer enough solar options.
Elliot said similar situations could still arise if this bill passes, since elected officials would be the ones making the choice about whether to enroll everyone automatically.
“It may not be something that makes everyone happy,” she said.
Investor-owned utilities would still be part of transmission, too. Even if residents could choose to get their energy from local companies using more renewables, it would still be delivered through investor-owned utilities’ lines for a fee. Shaw described it as a partnership.
Privately owned utilities aren’t generally happy about the legislation, Elliot said. This may be because utilities might not be making as much use of existing investments like power plants that they’ve already built. However, she said there are details in the bill that would compensate the utilities for those losses.
Elliot said it’s been difficult to enact these plans in other states, dating back over a decade in places like California. She said she anticipates the same reluctance from existing private utilities in New Mexico.
There are also political barriers to passing the bill, like how much investor-owned utilities donate to elected officials, Shaw pointed out. PNM contributed over $178,000 to state officials vying for office, including lawmakers, in the 2022 primary and general election cycles, according to the N.M. Secretary of State’s finance system.
Advocates tried to get this bill passed in 2019 and 2021 with no success. And after the recent elections, the makeup of the N.M. House stayed mostly the same, though two recounts are pending.
But Shaw said she’s optimistic that it could pass now because more people are interested in alternative energy options like solar. There’s also about $360 billion coming down from the Inflation Reduction Act to support clean energy manufacturing throughout the U.S., she added, making this a timely opportunity.
Similar legislation already exists in 10 other states, called Community Choice Aggregation. Because it’s better known this time around, Elliot said lawmakers may be more open to approving the bill in 2023. She also said advocates have been able to figure out what works with it and what doesn’t.
“I think it’s a good time for New Mexico to do it,” she said. “Now they can point to several states where it’s been tremendously successful.”
Overall, a lot of people in New Mexico, Elliot said, will appreciate this direct way to fight against climate change — something that often feels abstract and frightening.
“In New Mexico, if we really do this, with the solar potential we have here, I’m convinced we can not only power the state with solar, but maybe with some future changes, we can power the region,” she said. “There’s so much potential with the power of the sun here.”
This story was updated on Thursday, Dec. 8, 2022 at 8:25 a.m. to reflect the correct amount of money available from the Inflation Reduction Act.
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