Landmark Energy Transition Act passes NM Legislature!

For immediate release: Tuesday, March 12, 2019.
Contact: Camilla Feibelman, Sierra Club Rio Grande Chapter, 505-715-8388, camilla.feibelman@sierraclub.org

Tuesday afternoon, the New Mexico State House passed SB489, the Energy Transition Act, sending this landmark legislation to Gov. Michelle Lujan-Grisham’s office. Nearly 1,000 New Mexico Sierra Club supporters contacted their legislators in support of this life-saving and economy-fueling legislation.

“Passage of the Energy Transition Act gives great hope to New Mexico and everyone who wants a livable future on our planet.,” said Camilla Feibelman, Sierra Club Rio Grande Chapter director. The world’s top scientists tell us we have only 12 years to take transformative action to prevent the worst consequences of climate disruption. The Energy Transition Act is an innovative and powerful answer to that clarion call. This is a significant win for New Mexico ratepayers, our environment, workers and communities in the Four Corners region who will have new opportunities to participate in our growing clean energy economy.”

“Moving to a clean-energy economy shouldn’t mean leaving behind the people who have worked to keep our lights on for decades,” said David Coss, Sierra Club Rio Grande Chapter chair. “This legislation addresses the economic, environmental and justice impacts of retiring San Juan Generating Station. It creates funding to ensure that the Four Corners community isn’t left in the cold in a post-coal economy. It replaces the lost tax base in San Juan County, and it creates a safety net for mine and plant workers, who shouldn’t have to pay for PNM’s pollution.”

“The ETA supports a robust and independent renewable-energy sector that will diversify and expand New Mexico’s economy” Feibelman said. “This is exciting and transformative legislation that elevates New Mexico to a renewable-energy leader,” Feibelman said.

Renewable-portfolio standards are credited with bringing down solar and wind costs by more than 70 percent just since 2009, and it turns out that they have brought down bills, too. Studies show that states with renewable standards have lower average electric bills.


“Gov. Lujan Grisham, Sens. Candelaria, Stewart and Ortiz y Pino and Reps. Small, Roybal-Caballero and Egolf all deserve kudos for looking into the future and acting with vision. Sen. Candelaria especially stewarded this bill from one that benefited mostly PNM to one that is a true win-win-win-win for ratepayers, PNM, the Four Corners community and humanity.”

“Most importantly, this bill is simply a necessity to preserve our quality of life for our children and grandchildren. This truly is life-saving legislation,” Feibelman said.


The Energy Transition Act lowers electric rates, provides significant reinvestment in the Four Corners community, ensures San Juan coal plant is retired, and creates a safety net for coal workers. It also requires 100% carbon-free electricity from New Mexico’s investor-owned utilities by 2045.

Labor and community groups like AFSCME, Building Trades and Somos Un Pueblo Unido join the Sierra Club and other environmental groups in enthusiastic support.

Here’s what the Energy Transition Act does:

Requires 50% renewable energy in New Mexico by 2030; 80% by 2040; and 100% carbon-free energy by 2045. Those mandates are for our state’s investor-owned utilities (PNM, El Paso Electric and Southwestern Public Service). Co-ops get five years longer to comply. That is huge progress toward protecting our children from the biggest crisis facing humanity: climate change.

Stops the pollution from coal-fired San Juan Generating Station for good by requiring that the facility meet pollution requirements that coal plants are unable to meet. Without this legislation, there is a possibility that this plant could remain open. No other bill or scenario requires the plant to stop burning coal.

Provides significant reinvestment in the Four Corners community. This is why this legislation exists. Low-rate financing of the costs customers are already paying for San Juan creates funding to reinvest in workers and the community. The Energy Transition Act directs $20 million to San Juan County economic development and requires 450 MW of replacement power in the same school district as the plant to replace the lost property taxes.

Provides a safety net for San Juan plant and mine workers. The ETA provides another $20 million in severance payments and retraining for the plant and mine workers. Again, securitization provides funding to ensure an equitable transition for workers. Without this bill, there will be no means to take care of employees who have worked hard to keep our lights on all these years. This is unavailable at the PRC.

Creates an apprenticeship program to develop the workforce of the future. The bill enacts an apprenticeship program for new energy-construction projects that requires prioritization of participants from diverse and disadvantaged communities and creates a committee with representatives from impacted communities to determine standards and rules for implementing those goals.

Lowers rates. Yes, the Energy Transition Act would LOWER PNM customers’ current bills. This is another benefit of securitization. This bill refinances costs PNM customers are already paying. They would continue to pay them until 2053 if San Juan didn’t close. Non-PNM customers’ rates won’t be affected — except that more renewables will likely mean lower fuel costs and lower bills.

When PNM or other utilities build power plants and invest in them (for new equipment or pollution controls, etc.), it’s a bit like making a loan to ratepayers, and the PRC authorizes PNM to put those costs into rates, plus a rate of return of about 10%. The Energy Transition Act would allow PNM to sell low-interest bonds to recoup the principle on its San Juan investments at 2-3% instead of the roughly 10% customers are currently paying. PNM gets its principle back but loses the entire 10% return. That’s a loss of about $16 million in profit yearly on this deal.

It makes it much less likely that PNM will replace San Juan coal with gas. The bill’s renewables requirements make PNM much more likely to replace San Juan coal power with renewable energy, but there’s also language in the bill requiring replacement power to be the most environmentally friendly and cost-competitive option, meaning the PRC is more likely to reject gas as a replacement source if the Energy Transition Act passes.


Landmark Energy Transition Act passes NM Legislature!