ABQJOURNAL OPINION/GUEST_COLUMNS: Proposed Carbon Rules Will Boost N.M. Bills, Not Jobs

Sunday, December 05, 2010

Proposed Carbon Rules Will Boost N.M. Bills, Not Jobs

By Carla J. Sonntag
Executive Director, New Mexico Utility Shareholders Alliance
          No one would argue against the importance of job creation in New Mexico. (Albuquerque Journal, "New Carbon Rules Will Create Jobs, Investment" Nov. 24). But it doesn't take much research to effectively argue that the proposed carbon reduction rule proposed by New Energy Environment (NEE) will likely result in a net loss of jobs in the state, not the creation of new jobs. Consideration of the NEE proposal by the New Mexico Environmental Improvement Board will be Monday and Tuesday and falls immediately after the EIB's approval of a closely related cap-and-trade rule that was approved on Nov. 2, 2010.
        Consider the single basic fact that was demonstrated throughout the state EIB's hearing on the NEE proposed rule – energy prices will increase. Even New Energy Economy acknowledges as much. NEE's proposed rule asks New Mexico to act alone within the southwest region in capping greenhouse gas emissions in spite of rules to the contrary in the recently passed cap-and-trade rule.
        Those increased costs would be passed on to residential, commercial and industrial consumers in the form of increased utility bills as well as increases to consumer goods. Given a choice, companies almost certainly would choose to locate their businesses in a state not burdened by these additional regulations and costs.
        Many of the desires expressed by the New Energy Economy are shared by members of the New Mexico Utility Shareholders Alliance. Who are NMUSA members? According to an internal survey, 47 percent of NMUSA member households earn less than $50,000 per year and 72 percent of NMUSA members are over the age of 65 years. We are citizens and consumers of this state and we, too, want clean, affordable energy that supports a growing economy and promotes the health and welfare of all New Mexicans. But it is simplistic to think that any of these objectives will be achieved by adopting NEE's well-intentioned but misguided proposal. NEE's own expert witnesses acknowledge that adoption of their proposed cap would not even accomplish its basic aim of impacting climate change in the state.
        It's also disingenuous for New Energy Economy to point to 40-to-50-year-old decisions to build coal-fired generating units and say they were bad business decisions. These resources, approved and permitted by state and federal environmental agencies, have helped keep New Mexico electricity bills among the most affordable in the nation. PNM and the other eight owners of the state's primary coal facility, San Juan Generating Station, have invested hundreds of millions of dollars to reduce and control emissions from the plant. That plant, by the way, currently employs 400 New Mexico residents. The adjacent coal mine employment is in addition to that number.
        New Mexico does have tremendous potential for renewable energy. Realizing that potential could create some new jobs. It's an illogical leap, however, to promote a New Mexico-only cap on greenhouse gas emissions as a jobs program. The statement claiming adoption of the proposed NEE rule will lead to "job creation, investment and innovation" is an assertion that NEE's own expert witnesses were not able to substantiate in hearings before the Environmental Improvement Board.
        The only thing we know for sure is that such regulation will increase the cost of electricity for all customers, including would-be green employers. It harms New Mexico energy consumers to artificially create a market for more renewable energy by driving prices from fossil fuel resources higher — resources that actually play an important role in backing up renewable resources when the wind isn't blowing and the sun isn't shining. And, we should remember that our state already has one of the most aggressive renewable energy goals in the nation — 20 percent of energy produced by 2020, compared to 6 percent today.
        All of this is happening at a time when utilities throughout the nation are facing cost pressures to continue to meet growing demand for electricity. While these cost pressures aren't unique to New Mexico, only New Mexico utilities will have to also address the additional cost impact the proposed carbon policy will create. Adding this New Mexico-only regulatory mandate on top of these fundamental requirements is the wrong thing to do for New Mexico families, businesses and shareholders.
        Carla Sonntag is the Executive Director of the New Mexico Utility Shareholders Alliance (NMUSA), the nonprofit organization representing shareholders' interests of gas and electric utility companies operating in New Mexico. More information is available at: www.nmusa.org.

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