Now that legalizing recreational pot and the Red Flag law appear dead this legislative session, the public's attention may turn to items that directly impact their pocketbooks. Like these. . .

Modest tax relief ideas have popped up in light of the massive state surpluses from the SE oil boom. Bills getting bipartisan attention include one that would "propose a limited exemption from Personal Income Tax for income from Social Security that is taxable for federal purposes. Each individual may claim an exemption up to $24,000."

ABQ metro area State Rep. Daymon Ely has signed on to HB77:

This is intended to give a break to people on fixed incomes. There are other ways to generate income than double-taxing New Mexico seniors.

Ely says 1 in 5 New Mexicans, more than 382,000, receive Social Security. That's a lot of eyeballs watching, but Speaker Egolf says this may be the year to lay the groundwork and then pass the cut at the 2021 session.

Then there's the predictable call from Republicans that some of the surplus be rebated to taxpayers. ABQ GOP State Senator Sander Rue is backing SB82 which proposes a one time $60 million rebate:

I believe a rebate check would have an immediate, positive effect on our economy as taxpayers spend rebate checks on what they believe is best for their families and themselves. $60 million flowing into our economy would also have a multiplier effect. . . ” 

Rue, who is expected to face a tough re-election battle for his Westside seat, says a family of four earning up to $50,000 and filing jointly could receive a check for $200. A family of four earning up to $100,000 could receive a check for $125.

The often arcane debate over the state budget will keep legislators busy for the remainder of the session but items like Social Security taxes and rebates in their pockets should keep Mr. and Mrs. New Mexico at least casually interested in the Roundhouse happenings.

ETA REDUX

Our "minority opinion" on the NM Supreme Court ruling and the Energy Transition Act (ETA) drew reader response.

We questioned whether applying the ETA to the Public Regulation Commission (PRC) case shuttering PNM's coal-fired San Juan Generating Station--as the Supremes ordered--was in the interest of ratepayers. Mona Blaber of the Rio Grande Chapter of the Sierra Club argues it is:

What ETA opponents won't tell you is that their alternative — to try to disallow some of PNM’s investments in San Juan that the PRC already approved — would not save customers any more than the ETA.

Yes, rates might go up — but those rate increases would happen whether the ETA were implemented or not. Rates might also remain lower, but things like building replacement power will add to them. However, that would happen regardless of whether the stranded costs were financed by the ETA or any other scenario.

. . .The ETA ensures that instead of customers paying PNM a 10% profit on its investments in San Juan, customers pay off that stranded debt at 3%. That represents a significant savings, even with $40 million in recovery funds for workers. . .The ETA financing allows PNM to recover its principal, but PNM shareholders lose that 10% rate of return.

. . .The Sierra Club opposed PNM's version of the ETA in 2018 because it didn't do enough for ratepayers, workers or the climate. They negotiated the 2019 legislation so ratepayers would see about the same savings as in the likely best-case PRC outcome--a 50% split between ratepayers and shareholders. . .

. . . .Your diatribe about environmentalists caring only about “saving the world”. . . at the cost of consumers is misguided, given the current market for electricity sources.

Reader Jim McClure argues that PNM customers will see rising bills to pay for the renewable energy mandated by ETA:

Joe, it’s worth noting that part of the PRC’s charter is to protect consumers. Legislators and the governor--who crafted the ETA--are under no such obligation. That’s going to be a challenge because the PRC also is obligated to keep utilities solvent. When PNM invests billions in renewable energy required by the ETA, it will recover those costs through higher rates. If anyone believes utility rates will go down, I have some land in Rio Communities I’d like to sell.

DEFENDING CANDELARIA

Reader Andrew Knight defends ABQ Dem State Senator Jacob Candelaria whose attacks on the PRC and his role in passing the ETA we questioned:

The sad fact is that Senator Candelaria’s description of those particular PRC commissioners is accurate, and anyone who has worked closely with the PRC over the past few years knows that. 

While I am no fan of PNM, their decision to shut down one of the largest sources of greenhouse gases in North America involved significant risk to their bottom line, and needs to be supported and applauded, not punished. As someone who has been intimately involved in analyzing and approving the costs for the decommissioning of San Juan, I can assure you the ETA does not "give away the store" to PNM, not by a long shot. 

The ratepayers will be fine. It is the workers and miners in Farmington that we should be most concerned about and the ETA provides a lot of real help for them.

One does wonder about those coal miners, many of them Navajo. While the ETA provides $40 million for retraining and other assistance it seems unlikely that they will find comparable jobs.

A local government study says closing San Juan and the San Juan Mine will mean $105 million in lost wages and about 1,500 lost jobs. The average salary is $86,000 a year and the average worker is 47 years old.

Energy production is the raison d'etre for San Juan County's economy. Its population loss in the last decade is due almost entirely to the crash in natural gas prices. There were no replacement jobs, and that will probably be the case when San Juan is shuttered in 2022.

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(c)NM POLITICS WITH JOE MONAHAN 2020