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Editorial: Historic NM energy bill nears the finish line

New Mexico is about to flip the “on” switch for a bright new, climate-friendly, energy future.

Senate Bill 489, co-sponsored by five Senate and House Democrats, sets the state on a path for carbon-free electricity generation by 2045, with key benchmarks along the way. It requires the state’s public utilities to derive 50 percent of their electricity from renewable resources by 2030 and 80 percent by 2040. That’s a dramatic increase from the state’s current mandates which require 20 percent from renewables by 2020.

The plan is a mandate – not just an aspiration – and is among the most aggressive, if not the most, in the United States.

The Senate approved the bill on a bipartisan vote of 32-9 on March 6. On Tuesday, the House sent the bill to the governor’s desk on a 43-22 vote.

Despite some controversial provisions – most notably a financial mechanism that allows Public Service Company of New Mexico to recover all of its investments after shutting down the coal-fired San Juan Generating Station near Farmington – the legislation has an impressive coalition of supporters as a number of environmental and business groups have joined forces with PNM to forge ahead with the proposal.

In the final analysis, the proposal allowing PNM to issue fixed-rate bonds to help it recover the costs associated with the transition is fair and makes sound business sense for both PNM and consumers.

Sanders Moore of Environment New Mexico summed up one of the key arguments for the legislation: “We have world-class renewable energy resources we should be taking advantage of.” Correct.

And Gov. Michelle Lujan Grisham – who will get a nice political bump nationally – added her considerable political muscle to pushing the legislation, with a half dozen top officials in her administration testifying in support of the measure during a three-hour hearing before the House Judiciary Committee this week.

This legislation isn’t without pain – particularly for coal miners in the Four Corners area. But the measure requires a significant amount of renewable capacity to be based in that area, restoring the local property tax base that will be lost after the coal plant closes, and authorizes two new funds for economic development and worker retraining to mitigate the impact of closing the San Juan plant and mine.

It also includes the good sense provision that allows PNM to continue using electricity generated by the Palo Verde Nuclear Generating Station in Arizona. Some environmentalists hate nuclear power, but they can’t argue that it isn’t carbon free.

And the legislation is banking on new, emerging technology – namely battery storage that would be adequate to avoid the need for significant backup generating capacity from natural gas, which is cheap and plentiful. But even if natural gas backup proves necessary, it could still meet the bill’s mandate if it has carbon sequestration technology.

How will this impact rates? PNM, co-sponsor Rep. Nathan Small, D-Las Cruces, and others say the cost of electricity will be lower than it would be without the change.

Arguably that’s a bit speculative, perhaps optimistic and short on number crunching. But at the end of the day it will still be the job of the Public Regulation Commission (which hopefully will one day be an appointed, professional body rather than an elected one) and the attorney general to balance the interests of ratepayers against those of the regulated utility.

So consumers will have protection.

Now that it has cleared its final legislative hurdle, you can expect the governor to sign this legislation with glee. And it will be well-deserved as it puts the state at the forefront of an important economic and environmental issue. Congratulations to the supporters.

This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.