Monday, February 18, 2019Big Energy Bill Of Session '19 Draws Debate; Enviros Celebrate New Renewable Standard But Critics Complain Of A PNM Giveaway Environmentalists at the Roundhouse are ecstatic over this major piece of legislation that has won the support of the Governor and just about every major enviro group--except one--and that is the thorn in the side of the Energy Transition ACT (ETA). ETA would put New Mexico on an ambitious course to generate 50 percent of its energy needs from renewable resources by 2030 and 80 percent by 2040, all in the name of fighting climate change. If approved, those would be some of the strongest standards in the nation. But there is a catch. . . In order to help get rid of all that nasty carbon pollution PNM has to finish shutting down its Four Corners coal-fired San Juan Generating Station. That's an expensive proposition but under the ETA consumers would step up for the the electric company by paying off bonds that would be floated to cover costs of the closure. That brings us back to the thorn in the side. Enviro group New Energy Economy says ETA is a blatant bail out for PNM and will end up costing consumers dearly on their monthly bills for years to come. Here's how the ETA will work when it comes to PNM as described by its enviro backers: The ETA provides low cost financing to pay off coal plant costs and close the facilities, often referred to as “securitization,” a tool used by environmentalists in many states. . . The lower interest bonds will reduce the overall cost of closing coal plants by as much as 40%. . . and pay for things like economic transition funding for displaced workers and communities. For New Mexico, securitization is a fair way for utility customers and shareholders to move away from coal and share in the responsibility of doing so. The main sponsor of the ETA is ABQ Dem Senator Jacob Candelaria who took heat last year for another bill that was deemed a bail out of PNM for closing San Juan and that was ultimately shot down. But this time he has the Guv and major enviro groups like Conservation Voters NM and the Sierra Club on his side. LET'S DEBATE IT
This bill is supported by the leading environmental groups in New Mexico including Conservation Voters, the Sierra Club, Western Resource Advocates, and NRDC. It’s arrogant of NEE to suggest that these dedicated professionals can’t evaluate both the securitization and Renewable Portfolio Standard (RPS) separately on their own merits, and support each proposal on its own merits. But that’s exactly what the broad group of stakeholders supporting this bill has done, including the building trades council and AFSCME. We should not financially punish utilities that step up to close coal plants. The ETA shares responsibility of coal plant closure between ratepayers and shareholders. PNM shareholders currently earn about $16 million per year on its investment in San Juan. Through securitization the bonds are issued and the plant is paid off, the shareholders receive zero profit. And the savings from the low interest bonds benefit rate payers so they have lower monthly bills than they would if PNM used traditional financing. Furthermore, the bill would invest approximately $70 million of the securitized funds into the Four Corners community for displaced workers and clean-up of the environment. From a rate payer perspective, it’s telling that you have respected consumer advocacy groups like Somos un Pueblo Unido, NM Cafe, and Prosperity Works signed on to support this bill. I should add that, according to modeling by one national environmental group (NRDC), raising the RPS could create as many as 8,830 clean energy jobs and prompt major in investment in the state's clean energy economy by 2030. That's thousands of jobs for families at every skill level. Now Mariel Nanasi, executive director of NEE:
This is not just the opinion of New Energy Economy; it is the opinion of national securitization experts. . . They explained that PRC authority is paramount. . . to ensure due diligence consistent with ratepayer protections because the decision will be set in stone for 25 years. Enviros want an increase in the Renewable Portfolio Standard (RPS) and will stop at nothing, including throwing ratepayers under the omnibus. . . They don’t care about costs so they worked out a back room deal with the PNM . . while stripping the PRC of its authority. . . PNM will get hundreds of millions of dollars and invest it in more natural gas. PNM is in the process of building more gas at San Juan (so much for PNM's “renewed commitment to renewables”). PNM will own the gas without any competition, shut out independent power producers and squash the renewable energy market. What a deal! Enviros get an increase in the RPS, while ETA gives PNM $400 million in a “non-bypassable charge” on every ratepayer's bill for 25 years for the San Juan bailout, charge ratepayers higher costs for gas, drastically undercut the authority of their regulators and make consumers pay for toxic waste that PNM has caused at San Juan. Doesn’t sound fair, does it? It’s not. The deal stinks. That's quite a spirited debate over a complex but high impact measure. Thanks to Candelaria and Nanasi for succinctly summing up the battle. We'll keep you posted in this final month of Session '19. This is the home of New Mexico politics. E-mail your news and comments. (jmonahan@ix.netcom.com) Interested in reaching New Mexico's most informed audience? Advertise here.   (c)NM POLITICS WITH JOE MONAHAN 2019 |
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