We have some exciting news to share about groundbreaking legislation filed today, Feb. 7, that will make New Mexico a renewable-energy leader, retire coal-fired San Juan Generating Station and provide millions in reinvestment for the Four Corners region and economic relief for San Juan workers.
The Energy Transition Act, SB 489, was introduced at the New Mexico Legislature by Sens. Mimi Stewart, Jacob Candelaria and Jerry Ortiz y Pino.
The centerpiece of the Energy Transition Act is the transition from coal and gas power to 100% carbon-free electricity by 2045 for New Mexico, one of the highest standards in the country. At the heart of this transition is securitization, an innovative tool that has been used in other states to provide an equitable transition from coal.
You might remember that Sierra Club opposed PNM’s securitization legislation last year. That bill mostly benefited PNM and no one else. But a coalition of environmental, community and labor groups have spent the last year crafting legislation that fulfills the promise of this tool to benefit ratepayers, the Four Corners community and workers, and our climate.
What does the Energy Transition Act do?
- Requires PNM, El Paso Electric and Southwest Public Service to provide:
- 50% renewable energy by 2030
- 80% renewable energy by 2040
- 100% carbon-free energy by 2045;
- Reduces PNM rates;
- Provides $40 million for economic development for San Juan County and severance packages for plant and mine workers;
- Provides workforce training and apprenticeships in labor-union jobs;
- Directs 450 megawatts of replacement power to be built in San Juan County, an investment of hundreds of millions that will replace the lost property-tax base for the community after the coal plant closes;
- Provides $30 million for clean-up and remediation;
- Requires rural co-ops to provide 50% renewable energy by 2030 and 80% renewables and 100% carbon-free by 2050.
What is securitization?
When a utility builds a plant or makes capital investments, it pays up front and then puts the cost into rates and adds a rate of return, like a loan to ratepayers. PNM says it is likely to close coal-fired San Juan Generating Station in 2022. But customers still owe PNM $320 million for expenditures on San Juan. Securitization legislation would refinance that debt; PNM gets its principle back but loses all the profit it would have earned from customers. Customers pay back the bonds, but at a much lower rate (3-4%) than they’re paying now to PNM (about 9.5%).
PNM has agreed to use $40 million of the bond proceeds for economic development in the Four Corners and severance and retraining packages for plant and mine workers. And it will use $30 million for cleanup and decommissioning of San Juan.
The original legislation was a good deal for PNM but didn’t benefit ratepayers and missed the opportunity to reinvest in the Four Corners community and in clean, renewable replacement power. After a year of negotiations and conversations from all stakeholders, this year’s Energy Transition Act is a bold and equitable solution to transform New Mexico’s energy future.
Call 1-888-712-6823 to learn more and ask your senator to support SB 489, the Energy Transition Act, for 100% clean energy for all!