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Lawmakers push energy transition

Ap New Mexico Energy Future Rpsm401

Public Service Company of New Mexico will close the coal-fired San Juan Generating Station and transition to renewable energy sources. (Susan Montoya Bryan/Associated Press)

Copyright © 2019 Albuquerque Journal

SANTA FE – Their frustration obvious, legislative leaders in New Mexico explored ideas Thursday for accelerating the execution of a landmark law that charts a new energy future for the state.

Supporters of the Energy Transition Act focused some of their barbs on the Public Regulation Commission, accusing the independently elected body of moving too slowly to carry out the new law and overstepping its authority.

House Speaker Brian Egolf, D-Santa Fe, said the PRC is trying to play “junior varsity legislature” by second-guessing decisions made by lawmakers and Gov. Michelle Lujan Grisham.

He suggested that lawmakers and others may try in coming days to get the state Supreme Court to step in.

Sen. Joseph Cervantes, a Las Cruces Democrat who presided over Thursday’s meeting of the Water and Natural Resources Committee, said lawmakers should amend the energy law in next year’s legislative session, making it absolutely clear how they want it carried out and avoiding lengthy litigation.

Skeptics of the energy law, in turn, defended the PRC and said the agency is properly carrying out its regulatory role.

No one committed to any particular action during Thursday’s hearing at the Capitol, where lawmakers heard an update on the Energy Transition Act.

The legislation commits New Mexico to a carbon-free energy system within 25 years – the first state law of its kind in the country, supporters say.

Sayuri Yamada, an executive for the Public Service Company of New Mexico, said her utility’s transition away from a coal-fired power plant to renewable energy sources will grow costlier at the end of the year, adding to the urgency of carrying out the new energy law.

Federal tax credits for renewable energy projects, she said, will be scaled back next year.

“The renewable energy tax credits are a key piece to getting New Mexico to zero carbon,” Yamada said. “Losing those tax credits would obviously mean higher costs to customers.”

Much of the frustration centers on the PRC’s handling of PNM proposals to shut down the coal-fired San Juan Generating Station and establish replacement sources of energy. The PRC is considering whether the new Energy Transition Act should apply to the PNM proposal.

One hearing begins in about a month, and another is set for late January.

Supporters of the act say the law is clearly designed to apply to PNM’s shift to increased use of renewable energy sources.

Egolf, the speaker of the House, said the PRC’s role is to regulate utilities under laws enacted by the Legislature and governor, not debate the merits of the laws themselves.

“We have an agency flagrantly avoiding implementation of the law,” he said. “It’s very troubling.”

Skeptics of the energy law, however, said the commission is properly carrying out its duties – among which are protecting the customers of power companies.

“It appears the PRC is being hammered for trying to do their job,” Republican Rep. Larry Scott of Hobbs said.

Mariel Nanasi, executive director of New Energy Economy, a Santa Fe-based advocacy group, said the PRC has a critical role in protecting ratepayers and is fulfilling its duties.

“This is the best PRC we’ve had in two decades,” Nanasi told lawmakers. “They did what they absolutely are supposed to do.”

The state Supreme Court has already rejected at least one petition asking it to step in. PNM and a series of environmental groups unsuccessfully petitioned the court earlier this year to direct the Public Regulation Commission to follow the Energy Transition Act.

But Egolf said he believes there’s a still chance to persuade the court to get involved.

The energy law emerged as one of the most hotly contested proposals of the 2018 and 2019 legislative sessions. It failed last year, but a new version survived a filibuster this year.

Senate Bill 489 won approval 32-9 in the Senate this year and passed the House 43-22. Lujan Grisham signed it into law in March.

The Energy Transition Act phases in requirements for emission-free energy production. It also authorizes PNM to use low-cost bonds to finance the shutdown of the San Juan coal plant and provide $40 million for severance pay and other assistance to laid-off workers.

PNM customers would pay off the bonds.

New Energy Economy, meanwhile, argues that PNM shareholders – not just ratepayers – should shoulder some of the costs for the San Juan shutdown.

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