Sunday, February 07, 2010
Emissions Cap Will Come at a Cost
The greenhouse gas reduction sought by the advocacy group New Energy Economy would apply to oil and gas producers, refineries, manufacturers, coal-fired power plants and others in New Mexico that emit 10,000 tons or more a year of carbon dioxide.
Public Service Company of New Mexico estimates it would have to reduce current carbon emissions from its fleet of power plants by 36 percent to meet the proposed cap.
And the company says that would mean a big jump in electric bills.
PNM's San Juan coal-fired plant near Farmington provides about 50 percent of its total electricity output.
"Today, there is no commercially viable technology to retrofit an existing coal plant and remove carbon dioxide from the waste stream and sequester it," said PNM spokesman Don Brown. "If this continued to be the case by 2020, we would be left with two options, both (of which) involve shutting down most or all of San Juan."
Brown said the lost capacity would have to be replaced with either natural gas-fired generation, or a mixture of mostly gas-fired generation and some renewable energy sources, like wind and solar.
"The gas-powered plants would be there to provide power when the renewables aren't generating power," Brown said. "Very roughly, we estimate the minimum capital investment would be a billion dollars ... The rate impact of that alone would be 15 to 20 percent, at the very least."
The national cap and trade bill that passed the House last summer, which PNM supports, affords utilities more flexibility, providing time for technology to mature and "a path to make reductions over time," he said.
In Farmington, city officials said New Energy Economy's proposed cap could lead its electric utility to limit production or shut down its power plants, forcing the city to buy power generated outside the state by traditional sources because not enough wind or solar power exists to replace the loss in local energy generation.
The emissions cap sought by New Energy Economy is based on work of the Intergovernmental Panel on Climate Change, which concluded that developed countries must reduce emissions 25 percent to 40 percent below 1990s levels by 2020 to stabilize CO2 levels.
"The EIB can usher in a needed change in the energy paradigm in New Mexico," said Mariel Nanasi, senior policy adviser for NEE.
The group would rather see national legislation, but says New Mexico should push ahead since there seems little chance of that anytime soon.
"That's why we believe if New Mexico is a first mover, it will actually have a first mover advantage," she said, citing the Silicon Valley as an example of what being on the ground floor of innovation can mean.
Opponents say it would do just the opposite, significantly driving up energy costs and putting business and industry at a severe competitive disadvantage.
They point out the petition does not address the cost to regulated businesses and industries, which they say would be forced to add pollution controls that are not commercially available, switch fuels, reduce their operations or even close.