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Groups file petition to help NM utilities reduce carbon risk

October 2013

Kathy Helms, Gallup Independent , August 29, 2013

WINDOW ROCK – Western Resource Advocates, New Energy Economy and 32 other organizations filed an amended petition with the New Mexico Public Regulation Commission Wednesday that, if adopted, would establish a Carbon Risk Reduction Rule for electric utilities.

The federal government is moving to reduce the emissions from power plants that cause global warming, and some New Mexico utilities could soon have a path to compliance that minimizes the cost to their customers, the groups stated in a news release.

The proposal has broad support from public health, business, environmental, consumer, Native American and other groups, they said, and will help position New Mexico utilities to meet pending federal carbon dioxide regulations designed to reduce greenhouse gas emissions that contribute to climate change.

The rule, if adopted by the PRC, would apply to utilities such as Public Service Company of New Mexico that are planning to retire coal-fired generation in the next several years.

PNM has proposed retiring two units at San Juan Generating Station by 2017 to meet the requirements of the U.S. Environmental Protection Agency’s Regional Haze Rule.

The rule proposed Wednesday would have the utilities reduce their carbon dioxide emissions by 3 percent per year through 2035. Utilities would be provided state certified credits to recognize their efforts to reduce carbon dioxide emissions. Importantly, the rule has a fail-safe provision so that if a less costly alternative becomes available, the utility and its customers have an offramp before additional costs are incurred, according to the groups.

The idea behind the proposal is to minimize the costs of future regulation by giving credits to utilities who are already taking steps to reduce carbon dioxide emissions, and to demonstrate a low-cost mechanism to achieve the carbon dioxide reductions scientists say are needed to combat climate change.

“There are many reasons to support this rule,” Steve Michel, chief counsel for Western Resource Advocates’ Energy Program, said. “Climate change, regional haze, mercury pollution, and water contamination from coal ash are among the impacts from some forms of electricity production. This rule allows utilities to manage their risks over time, in a way that protects their customers, the environment and their bottom line. It is a practical approach that allows all sides to come out ahead.”

Given the climate changes New Mexico is already experiencing, from the worst drought in the West to years of record setting-wildfires, the rule is particularly timely, the groups said. The last three years have been the driest and warmest in New Mexico since recordkeeping began in 1895.

“An avalanche of scientific data says that we need to transition from fossil fuel dependency to clean energy as soon as possible to avoid catastrophic climate change,” Mariel Nanasi, executive director of New Energy Economy, said. “The rule is a climate protection mechanism that reduces carbon pollution and offers utilities the flexibility to innovate.”

The proposed market-based rule provides an opportunity for New Mexico and its electric utilities to gain control of their destiny with respect to future greenhouse gas and other potential regulations, the groups said.

A similar mechanism was adopted recently for the Central Arizona Project water pumping loads, which exceed 350 megawatts and represent the largest electricity consumer in Arizona, according to the groups. The inclusion of this mechanism was part of an overall regional haze settlement presented to the Environmental Protection Agency on July 26.


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