SANTA FE, N.M. — This story has been updated to include comment from electric utility PNM.
Gov. Michelle Lujan Grisham threw her support behind a comprehensive energy bill Thursday that could pave the way to a 100 percent carbon-free electric grid in New Mexico by 2045.
Senate Bill 489, co-sponsored by Democratic lawmakers Mimi Stewart and Jacob Candelaria in the Senate and Nathan Small in the House, sets aggressive requirements for public utilities to acquire renewable resources over the next 20 years while eliminating all carbon-emitting generation.
It also authorizes the use of bonds for Public Service Co. of New Mexico to pay for costs associated with closing the coal-fired San Juan Generating Station near Farmington by 2022, and for pulling out of the nearby Four Corners Power Plant by 2031. The bonds would be paid for by customers through a surcharge on their bills.
Overall, SB 489, officially called the “Energy Transition Act,” creates a pathway for New Mexico to replace coal and other fossil fuel-based generation with a clean energy economy over the next 25 years, the governor said. It also authorizes creation of two new funds for economic development and worker re-training to mitigate the impact of closing the San Juan coal plant and mine.
“This robust package puts us in the drivers seat,” Lujan Grisham said in a prepared statement Thursday. “…The renewable and zero-carbon standards outlined in this bill are among the strongest in the country.”
In particular, the bill would require public utilities to derive 50 percent of their electricity from renewable resources by 2030, and 80 percent by 2040. They would completely eliminate carbon-emitting generation by 2045, relying on new technologies such as battery storage systems to make up the difference.
Those goals drew broad support from environmental groups.
“In general, the bill puts us on the same track as California to a 100 percent carbon-free energy economy by 2045, ” said Camilla Fiebelman, director of the Sierra Club Rio Grande Chapter. “But in California’s case, that’s an aspirational goal. In our case, it’s a mandate.”
PNM issued a statement late Thursday saying the bill challenges the company “to take bold action.”
“Our new Governor, the sponsors of this bill, and PNM recognizes that these are changing times,” its statement said. “We all agree that our environmental and economic future for all New Mexicans is at stake. The Energy Transition Act takes PNM out of our comfort zone, and challenges PNM to take bold action during this historic and unprecedented time in this global energy transition.”
The authorization for PNM to sell bonds to pay for abandoning its coal assets will likely generate opposition from some environmentalists, such as New Energy Economy in Santa Fe. That initiative, known as bond securitization, would allow PNM to recover most or all its investments in San Juan and Four Corners, up to $30 million for plant decommissioning and mine reclamation, and $20 million for severance and re-training for laid-off workers.
But NEE says PNM should be required to justify full cost recovery at the state Public Regulation Commission, which could decide to reduce the amount the utility recovers.
“If it includes a 100 percent bailout for PNM, New Mexicans have spoken and they’re emphatically opposed,” said NEE Executive Director Mariel Nanasi in an email to the Journal. “Why should all the lost earnings, cleanup costs and worker severance issues be paid by ratepayers without PNM contributing a penny to their bad business decisions?”