New Energy Economy
Lessons learned in the 2022 legislative session, and what comes next
The 2022 legislative session resulted in one, and only one, positive climate victory. The Community Energy Efficiency Development Block...
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A MEMORIAL TO STUDY PUBLIC POWER
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The Memorial to Study A State Level Public Utility Model, SM 10 and HM 20, requests that the New Mexico Public Regulation Commission initiate and oversee a study to determine the public, ratepayer, environmental and economic benefits and costs, as well as the technical feasibility, of state-level public utility models for New Mexico.
The Memorial to Study State Level Public Utility Model, SM 10 and HM 20, requests that the New Mexico Public Regulation Commission initiate and oversee a study to determine the public, ratepayer, environmental and economic benefits and costs, as well as the technical feasibility, of state-level public utility models for New Mexico.
Within the next decade trillions of dollars will be invested in energy infrastructure across the country. Demand for Renewable Energy is increasing exponentially in western states - it is expected to reach 150GW by 2050 (NM currently produces 3GW) and New Mexico is uniquely positioned to supply that power if we take advantage of this moment. It is imperative that we understand how this opportunity can best benefit the people of New Mexico.
A preliminary survey of the potential benefits of Public Power ownership in NM by the HBailey Group found:
ENDORSED BY:
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Public power ownership will result in immediate cost savings for customers from substantially decreased executive compensation, exemption from income taxes, access to lower cost financing through municipal bonds and elimination of guaranteed Return on Equity payments for utility investments.
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Public power ownership will accelerate the transition to 100% renewable energy. While IOU’s have a fiduciary duty to maximize shareholder profits, publicly owned utilities are accountable to community priorities. All of the communities in the United States that have achieved 100% renewable energy are served by community owned utilities.
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If New Mexico adopted Public Power and a developer’s mentality toward building transmission infrastructure, it could generate a minimum of 550 permanent jobs and more than $1 Billion in annual revenue in perpetuity for the benefit of the people of New Mexico.
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According to NREL, New Mexico has the technical resource potential to generate over 1.6 Billion MWh of electricity annually. More than 40 times the electrical energy currently produced in NM.
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NM could meet all of NM 100% RE needs and export as much power to California and other Western States as New Mexico aspires to.
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RETA’s current plan is for 11,500 to 13,000 additional MW of transport capacity to come online within 10 years. However, if an additional 16,700 to 23,500 MW were added, to include transmission, RE export revenue could exceed $1 Billion and annual wheeling revenue from transmission would exceed $100 million (from RETA study 2020 report).
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The recently completed Western Spirit Wind project is illustrative of the job and investment potential of this transition - 50 permanent jobs and 1100 temporary construction jobs for 150 miles of transmission and 1050 MW of wind generation. Under RETA’s current plan, a minimum of 550 permanent jobs and 5000-10,000 temporary construction jobs could be created, primarily in rural New Mexico.
The HBailey Group also found that with Public Power ownership, revenue generated from transmission expansion, transmission ownership and exported solar and wind energy could stay in New Mexico. Other benefits could include:
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Accelerated build out of transmission and generation capacity.
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State control of transmission lines for additional revenues from renewable energy generation projects.
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Increased competition in the market and flexible business transaction opportunities.
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Increased access for solar developers to export power to markets beyond New Mexico.
Why is a comprehesive study necessary?
WHY IS A COMPREHENSIVE FEASIBILITY STUDY NECESSARY?
Knowledge is power.
A comprehensive feasibility study is necessary to evaluate issues of governance, labor impacts, attainment of renewable energy standards, and the possible generation of revenue through state ownership of transmission and local generation of energy for tribes, municipalities and cities in NM.
The Memorial proposes that the study be housed at the Public Regulation Commission (PRC) due to the PRC's unique expertise on issues like transmission, distribution, rate-making and more. The legislative sponsors will choose the consultants and will seek private funding to pay for the study.
WHAT IS PUBLIC POWER?
What is Public Power?
PNM and EPE are investor-owned monopoly utilities (IOU's) and most New Mexico residents have no choice but to buy our power from them, but we can choose instead to create public electric utilities that will give New Mexicans control of their own infrastructure, power supply and energy profits.
IOU’s have a fiduciary obligation to make as much profit for their shareholders as possible, incentivizing maximum energy prices and disincentivizing efficiency. Those profits are extracted from New Mexico families to Wall Street. A comprehensive study of alternatives to the Investor Owned Utility model is necessary to assess the most beneficial path forward.
WHAT ARE THE ESTABLISHED BENEFITS OF PUBLIC POWER?
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Local Control-public utilities are governed by local boards and local values.
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Innovation-unconstrained by the profit motive, public utilities can invest in innovations like efficiency projects, micro-grids, community solar and more.
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Lower Rates-public power utility rates average 11% less than corporate IOU's.
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Reliability-public power utilities prioritize reliability over shareholder returns, invest more in infrastructure and repairs, and average less outages than IOU's.
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Economic Development-local ownership of generation and distribution generates local jobs, stimulates the formation of local businesses and provides funds for community projects and priorities.
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Rapid Energy Transition-public power ownership incentivizes lower cost energy options and responsiveness to local values. Public power utilities in the US were powered by 40% non-carbon emitting sources in 2019, compared to 2% at PNM.
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State and Local Revenue-profits from our sun and wind energy, whether used in New Mexico or exported to markets across the country, should benefit New Mexicans, not IOU shareholders.
Publicly owned utilities filled 14 of 20 top spots in the 2021 J.D. Power Electric Utility Residential Customer Satisfaction Study.
If New Mexico adopted Public Power and a developer’s mentality toward building transmission infrastructure, it could generate a minimum of 550 permanent jobs and more than $1 Billion in annual revenue in perpetuity for the benefit of the people of New Mexico.
Campaign Updates
2022 LEGISLATIVE UPDATES
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