On Nov. 16, New Mexico’s Environmental Improvement Board adopted Advanced Clean Cars II and Advanced Clean Trucks and Heavy-Duty Omnibus standards that will bring profound health, economic and climate benefits to New Mexico.

The state’s proposal requires automakers to make increasing percentages of electric vehicles and plug-in hybrid vehicles available to New Mexicans, topping out at 82% of new cars delivered to New Mexico in 2032. Automakers get early-action credits for EVs they sell before the standards go into effect starting with the 2027 model year. Clean Trucks would require an increasing percentage of medium- and heavy-duty trucks be electric. Heavy-Duty Low-NOx Omnibus, a third standard, reduces smog-forming pollution from new diesel-fueled trucks.

Because automakers prioritize Clean Cars states for EV availability, shoppers often have a hard time finding electric vehicles on New Mexico lots and often have to go out of state if they want an EV. These standards will provide much more choice. And yes, of course you can keep your gas car for as long as you like, and buy a new one if you really want, even at the peak of the proposed requirements.

EVs save money and lives

Recent studies find that Clean Cars standards would provide New Mexico up to $44 billion in economic benefits, including public health and climate improvements, savings to drivers, and utility  savings — by  fully adopting the standards through 2035.

These rules would reduce climate pollution by hundreds of millions of metric tons by 2050, about the same amount as the total pollution New Mexico produced in 2018, making these among the most effective climate policies New Mexico could adopt.

A recent analysis shows that New Mexicans could receive up to $44 billion in public health and climate benefits just from adopting Clean Cars II through 2035. Clean Cars and Trucks together would:

• Avoid 136 premature deaths by 2050 and prevent 76,000 respiratory incidents from breathing polluted air;
• Create nearly 1,000 additional jobs, many in well-paying positions in electrical-component manufacturing  and construction;
• Save individual EV owners between $14,000 and $16,800 during the life of the vehicle and deliver more than $30 billion in total savings for drivers through 2050.

Other cost benefits of electric cars and trucks:

• Federal $7,500 tax credits are available for selected new EVs and $4,000 credits for used cars. These will be transferable to dealers so they can be taken off your purchase price.
• New Mexico utilities now offer rebates of up to $2,500 for home EV chargers and installation — often enough to cover the entire cost.
• Plug-in hybrids are included in the Clean Cars II standards. These cars use battery charge for the first 30 to 50 miles and then switch to gas. Most hybrid drivers rarely have to buy gas because their daily driving doesn’t exceed 30 miles.
• Because EVs remain parked most of the time, they are a highly flexible resource. Charging vehicles when the grid is underutilized allows utilities to spread their fixed costs and puts downward pressure on rates, saving the average New Mexico household up to $24 on electricity annually.
• EV drivers contribute an estimated $806 million more to the economy than associated costs. Another study predicts similar benefits to New Mexico. These vehicles will likely be harder to purchase unless Clean Cars standards are adopted.
• Electric vehicles are expected to reach upfront cost parity by model year 2027, when this rule is implemented, and already many EVs cost less upfront than gas cars, even without incentives. EVs benefit consumers on Day 1 in most cases. Low-income customers spend a larger portion of their income on fuel, so this will have disproportionate benefit for low-income customers.

Improving Equity

Reducing vehicle pollution from trucks will protect public health, particularly in low-income, Black, Brown, and Indigenous communities that live closest to transportation routes in New Mexico. The Advanced Clean Trucks standard will hold trucking companies accountable for the pollution impacting New Mexicans’ health.

• A recent report analyzing the projecting total cost of ownership in 2027 for several medium- and heavy-duty market segments (including transit and school buses, shuttles, delivery vehicles and refuse haulers) shows that EVs are better investments than their fossil-fuel counterparts.
• By 2027, the purchase price alone will make many categories of electric medium- and heavy-duty vehicles (including transit and school buses; delivery vans and trucks, and refuse haulers) less expensive than their fossil-fuel counterparts.

Still have questions? Check out this great Q&A. 

Related: View this issue on the National Sierra Club page.

As I write this on May 19, 2022, today is Day 44 of the largest fire in New Mexico history. The Hermits Peak Fire began on April 6 with a prescribed burn and combined with the Calf Canyon Fire on about April 22. The combined megafire has now expanded to over 301,000 acres, has over 2100 fire personnel, is only 34% contained, and has evacuation warnings in 4 counties throughout Northeast New Mexico. 

My name is Anita Gonzales and I live in Las Vegas, N.M.  Las Vegas is a quaint little town of 13,000 that lies along the Gallinas River and is in the Sangre de Cristo Mountains. It is the heart of San Miguel County. My family, like so many others has lived here for generations and my story is one of thousands that have been impacted by this fire. San Miguel County borders Mora County and together forms a centuries-old community that has been in existence since before New Mexico was a state and is decedent of indigenous people that have lived in the area since before the United States existed. My family’s own history here dates back at least 7 generations that I can track. I consider myself one of the lucky ones. Though my family had to evacuate, I’m back home, in the house my grandfather built. I am writing this with the purpose of lending my voice to others who may not have been so lucky.

When the fire fist started in Las Dispensas it was worrisome.  It expanded quick to the neighboring areas and evacuations were done quickly. After about 2 weeks the fire had expanded to about 7,500 acres and was 91% contained.  No major property damage had been reported and there seemed hope for recovery.  On the morning of April 22, everything changed.  I happened to be in a meeting that also had local officials in attendance. They announced that they had to go as there was a new threat and this one was “going to be bad”.   By the next day, April 23, the fire had grown to over 42,000 acres and everything magnified.  Massive evacuation orders were released, and the fire was growing exponentially, burning tens of thousands of acres each day.   Severe weather conditions of extreme heat, high drought, low moisture, and extreme red flag wind days added to the severity of the fire as containment crews were unable to stop the massive beast that was destroying our community one village at a time. You may not be able to find many of these places on a map, but the areas of Las Dispensas, Las Tusas, San Ignacio, Pendaries, Cañoncito, Rociada are all home to many of my friends and their families.  

Immediately, my little town of Las Vegas (and surrounding areas) jumped into action to support its neighbors. An evacuation center was started at the old Memorial Middle School building and became a safe haven to those that had nowhere to go.  It offered shelter, the Red Cross, a warm meal, government services, and a comforting embrace to any that needed it. The need grew so great so fast that donations by the truckload were pouring in and the donation center needed to expand to a nearby church, the Calvary Chapel, to support the growing traffic flow managed by the Salvation Army. As soon as donations came in, they were going out.  Volunteers were jumping in the effort wherever and however they could offering shelter, space for storage and livestock, trucks and trailers to haul belongings and animals, cooking and serving meals, donating goods, donating money, offering professional services.  Volunteer firefighter crews and those with equipment remained in the thick of it to protect their homes and help the effort in clearing dozer lines and fire breaks where they could. 

I will never forget the first family I met at the evacuation site.  They were in a daze and still dirtied with ash and soot.  They were a young couple and tried to stay in their home until they were forced out.  They had nowhere else to go and the state police had dropped them off at the shelter once they had to leave as they needed clothes and a place to stay. Tears were flowing as they relayed, they had just invested everything they had into their home a few months earlier and even their car was not working. What were they going to do and where were they going to go? This next week more communities had been engulfed by the flames and more evacuation orders came…Gallinas, El Porvenir, Manuelitas, Penasco Blanco, Ledoux, Maestas Canyon, Carmen, Tierra Monte, Maestas Canyon, Sapello, Buena Vista, Puertocito, Rito Cebolla. Our small town looked post-apocalyptic with brown dark skies and covered in a smoky haze. Then, when the fire had nowhere else to go, it came our way. Although only separated by a few miles, never had I imagined that the fire could get to us. 

Side fact: Las Vegas is also home to the Armand Hammer United World College of the American West.  Over 200 students from across the world study and live at the Montezuma Castle along with their teachers and staff including three amazing students that we have adopted as part of their getaway family program.  The historic castle has been in existence since 1841, rebuilt in 1885, and is now recognized as one of America’s Treasures and is on the list of America’s Most Endangered Historic Places. Growing up, I was so proud to have a castle in my big backyard as UWC is about 3 road miles away from my house.  

As the fire traveled on the south end past Gallinas Canyon it now threatened the area of Hot Springs, Montezuma and was forecasted to travel eastward fast so areas of Los Vigiles, Country Acres, Storrie Lake and my house were all under evacuation orders. I left my house the first time on April 29.  As I packed, you could see the fire on the horizon peeking over the castle.  Even though, the fire had been on my mind for many days now, once it was my turn, what becomes important enough to evacuate with? Family came over and together we ransacked my house packing a suitcase for myself, for my son, important papers, technology, irreplaceable family photos, we each went through our rooms and packed keepsake items…my son taking his football stuff and me taking my jewelry and remnants from my grandparents including the last saint I had from my great-grandma’s altar.  When all was said and done, I had my Rav 4 packed and our 2nd vehicle was already moved.  We were safe.  I did a walk through the house taking pictures and video of everything we were leaving behind. When I was alone, the tears started to peek out.  But, the need was there to keep it together.  My son was scared, and he needed comfort. Before driving away, we checked in with our neighbors to see their plans and lend help where needed. Then we took one last picture with the fire blazing in the background as an emotional goodbye, not sure what was to come. 

That night, we became vagabonds and I was alone with my thoughts.  We were blessed to have many options of places to go and part of me wondered if I should have stayed amid the smoke to just “be home” and was I overreacting with the threat? That same night, the fire also moved southwest across Johnson Mesa and the communities of Mineral Hill, San Geronimo, San Pablo, and Ojitos Frios were also under emergency evacuation. In one night, the fire jumped by more than 30,000 acres in that direction resulting in midnight knocks at the door and emergency evacuations. The next day, the smoke had died down a little and hundreds more personnel were deployed to the area.  So, although under a “Go” order, I returned home solo, everything still packed, but waiting. 

While waiting on the south end, the north end was also growing.  Crews had been battling the fire in Ledoux as a stronghold to keep it from growing into the community of Mora.  There were more evacuations…Morphy Lake, Santiago Creek, Mora, Lucero, Rainsville, Pacheco Village, Monte Aplanado, Abuelo.  While my families home base was in Las Vegas, I spent many vacations and time in the areas of Ledoux, Monte Aplanado, and Sawyers Village-the home of my aunt (and family). My aunt is the caretaker of cabins for Sawyers Village at the tip of Monte Aplanado. Electricity and communication had been out in the area since April 22 with road closures and my aunt had chosen to stay behind. On Sunday, April 24 I woke up to emergency alerts for her area.  The fire had moved and opening up the fire tracker app was heartbreaking as the entire area of Monte Aplanado was engulfed in a heat signature and still no word. Emotions were high as she was able to make her way to my house.  She was forced out in the nick of time with a few personal belongings and her animals in her small jeep. Later, we found out all the homes in her area were gone.  The fire burned extremely hot for a few days leaving no chance of salvage. That night was consumed with phone calls and check ins making sure everyone was safe and sharing information and IT support so that neighbors knew where to look for help. 

With a shower and a night of rest, we were hoping to permanently be home, but we were evacuated again the morning of May 2. The fire line was holding at Montezuma, but there was a new threat coming from the west end of our property behind Luna Community College.  More evacuations were made…. Luna Hill, the NM Behavioral Health Institute, El Llano, Cinder Road, Creston, West Las Vegas, D. Bibb Industrial Area. With fire near in multiple directions and terrible air quality, we packed up to leave again. This time filling up our 2nd vehicle with more items, just in case. I called in family reinforcements to rehome my aunt to Albuquerque, then later Colorado. My little family made my way to another aunt’s house further into town for the night as we were exhausted.  Then we moved to Albuquerque for the week. That night was the first night in a few days without a smoke attack, a middle of the night warning, and a somewhat restful sleep.  

The time outside of Las Vegas was needed more than I realized.  Emotionally and physically, I was tired.  So much worry and heartbreak for those in the heart of the fire. Half of Las Vegas was on some evacuation order. I took the time to regroup and catch up on life, work, and other commitments as the rest of the world outside my home was moving on.  With the spread of the fire there was now evacuation centers and donation drops in Glorietta, Penasco, Taos, Santa Fe, Albuquerque, and Santa Rosa housing people and animals. FEMA had mobilized along with the NM National Guard and a support center had been created at the Glorietta Conference Center. We also had time to visit with our UWC students as they too had been evacuated and were being house at Glorietta with nothing more than a go-bag in a foreign country, not knowing if they were able to retrieve their few possessions they had. 

I returned to Las Vegas on Mother’s Day and spent the day happy to be in my home.  Everything still packed, but home as we were now downgraded to “Set” Status. Life has slowly returned to a new “normal” for us here in Las Vegas. Schools are back in session, the Universities are back, our UWC students were able to get their belongings and ready to go home for the summer, and people have returned to work as able. The guilt sets in as our return to “normal” has meant a crisis for others as the fire continues to spread to the North and the West and what about those that had nothing to return to? How is that “normal”? Evacuations have now expanded to Taos County with Colfax county on the ready as this fire is near the boundary of the recent Cooks Peaks Fire.  More evacuation statuses were issued…Romeroville, Bull Canyon, Colonias, Pecos, Cleveland, Holman, El Turquillo, Guadalupita, Chacon, Sierra Bonita, Angostura, Sipapu, La Junta, Tres Ritos.

As people as able to return to their homes, there is a range of what they are coming home to. For some (like me), evacuation ended up being a precaution and we were only gone for a short time.  I have a messy house that reeks like a bonfire and piles of items to put back.  For others, they have been evacuated for weeks, likely with electricity and water shut down to their homes.  Freezers and refrigerators full of rotten food and meat storage will need to be dealt with.  Wells, pumps, and infrastructure systems will need to be fixed. Jobs and life turned upside down as they needed to seek long tern refuge somewhere. And then for others, the unimaginable.  A return home to nothing but ash and molten rubble.  Emotions are raw and different for everyone-optimism, empathy, heartbreak, guilt, denial, grief, sadness, depression. In some areas the fire was selective, only reaching some structures and leaving others alone. In other areas, the fire was determined, but so was the will of the firefighters defending and protecting homes. Then in the rest the fire was non-discriminatory, sending a wave of heat to ravage everything in its path. For weeks, we have stalked Facebook, and many set their alarms to 9AM and 6PM for daily updates and briefings with weather reports in between. Each day waking up checking the fire trackers to see if the fire had grown and hoping for a day with no phone alerts meaning another area was under emergency orders.  

The future of the fire is unknown.  A good weather day means planes can fly and this beast can be attacked from both the air and the ground.  A bad weather day means take cover, because it can go fast in any direction and pray that the containment measures hold. As the fires rage on, we’re losing generations of culture, generations of existence — their herds, their crops, their ranching way of life is gone. People are returning to barren land to salvage. It will be hard, if not impossible, for many to rebuild. To date, over 600 structures have been lost with many more unaccounted and over 15,000 homes have been evacuated and counting. Each community evacuated means another hit to the Norte.

It’s impossible to overstate the impact that these fires are having. On communities, on culture, and on our environment. We’re still dealing with terrible air quality and smoke. Water quality warnings have been issued to most of the affected areas. There’s a huge loss of livestock, green space, and so much more. In many rural areas, we’re looking at a huge loss of population – a housing crisis, inadequate supplies to rebuild, and a reduced workforce. I can’t help but wonder whether folks will ever return back to our area after being displaced. They say memories don’t burn, but the things and places that trigger these memories do. 

These wildfires are truly unprecedented. With each year that passes, fire season stretches earlier into the spring and later into the winter. As we experience the worst drought in at least 1,200 years, experts are cautioning that more fires could be on the horizon. We must cultivate resilience as the climate crisis’ impacts continue to grow. Our planet is hurting, and we must listen! 

For now, I’m focused on relief. I’m working with local efforts that have set up evacuation centers and supply centers. All I can do is stay focused on supporting my community, and the communities across our state who are experiencing these huge losses. I am ever so grateful for the thousands of volunteers, donors, fire personnel, and first responders that have joined with us in the fight for our precious homeland. There are so many unsung community heroes including many that have lost everything themselves. For us in Northern New Mexico, our hearts are with our querencia (a place where one draws inspiration or strength from,” or “the place where one feels most comfortable and true).  We are forged from resilient people, and we are stronger together. As you read this, remember our communities, and pray for our people and our way of life. 

Click here to donate for recovery efforts for Northern New Mexico residents. 

CONTACT: Camilla Feibelman, camilla.feibelman@sierraclub.org, 505.715.8388

New Mexico Environmental Improvement Board adopts nation-leading air pollution rules for oil and gas operators

Conservation, public health, and community leaders from across New Mexico applauded the Environmental Improvement Board’s April 14 preliminary approval of final ozone precursor regulations for oil and gas production and processing. This includes nation-leading safeguards that address equipment leaks and malfunctions that account for 70% of the industry’s methane emissions.

This marks the second, complementary set of requirements in the Lujan Grisham administration’s groundbreaking approach to reduce air and methane pollution from the oil and gas industry. Combined with the ban on routine venting and flaring finalized by the state Oil Conservation Commission in March 2021, these rules hold oil and gas operators accountable for their pollution, limit waste, protect public health and combat climate change.

Methane is one of the key drivers of climate change. It is a powerful greenhouse gas 84 times more potent than carbon dioxide in the short term. The New Mexico Environment Department will implement the oil and gas air pollution rules the EIB adopted today. The rules require oil and gas operators to inspect all wells for leaks on a frequent basis without exemptions and protect those living closest to development by requiring more frequent inspections to find and fix leaks in proximity to homes and schools.

The final EIB rules include key improvements supported by public health advocates, local communities and even OXY USA Inc., the state’s second-largest oil producer, that will deliver the strongest possible protections – especially for front-line communities living closest to well sites.

In response, community groups released the following statements: 

“As a frontline community member, I am encouraged that NMED and EIB took a needed step today toward providing protection for my, and many others, communities from air pollution from oil and gas wells. I have personally seen in the San Juan Basin the oil and gas sites venting methane and health-hazardous pollution through the lens of my optical gas imaging camera. Frequent inspections from operators and regulators will help tackle toxins threatening the environment and the health of those living among extraction. Thank you to the efforts of those involved, including Gov. Lujan Grisham.“

— Kendra Pinto, Earthworks

“Thanks to the leadership of Gov. Lujan Grisham, the state has taken an important step toward protecting New Mexicans from the acute and long-term impacts of oil and gas pollution and building a better, healthier future for our communities. Now we need the federal government to follow the state’s lead, banning routine venting and flaring, and requiring frequent leak detection and repair on all facilities and wells”

— Camilla Feibelman, Rio Grande Chapter Sierra Club

“Air pollution from oil and gas operations in New Mexico endangers the health of front-line communities and adds to the climate burden. We applaud Gov. Lujan Grisham’s leadership pushing for nation-leading rules to protect public health, tackle greenhouse gas emissions, and ensure that the oil and gas industry takes responsibility for its chronic air pollution. New Mexico can be proud that today the Environmental Improvement Board adopted strong rules that include our coalition’s proposal that protects front-line communities that bear the brunt of oil and gas operations’ harmful side effects.”

— Erik Schlenker-Goodrich, Western Environmental Law Center

“Protecting New Mexicans’ air from largely unchecked methane pollution will open new doors to a more stable climate and healthier future for our state. Thanks to the Lujan Grisham administration for stepping up to effectively hold the oil and gas industry accountable to reduce its air and methane pollution.”
— Kurt Gutjahr, Climate Advocates Voces Unidas

“The New Mexico Environment Department and the EIB deserve credit for strengthening air pollution rules that will protect the health of frontline communities, which are also impacted by the fossil-fuel induced climate crisis. Those communities themselves have been extremely important for ensuring that the ozone rules, combined with the methane rules approved by the Energy, Minerals and Natural Resources Department and the Oil Conservation Commission a year ago, have positioned New Mexico as a leader on the way to a clean energy future.”

— Demis Foster, Conservation Voters New Mexico

“Cutting methane pollution is one of the best levers we have to reduce air pollution and fight climate change. With nearly 9,000 children under the age of 5 and over 78% of young kids living within a mile of an active oil or gas well in San Juan County alone, adopting strong rules that protect frontline communities is a breath of fresh air to parents around New Mexico. We are proud to see Governor Lujan Grisham and the Environment Improvement Board taking this opportunity to lead on ozone rules that help protect our children, our communities, and combat climate change.”

— Celerah Hewes, Moms Clean Air Force

“The standards finalized today represent historic progress for the health and safety of communities across New Mexico. Gov. Lujan Grisham’s administration is showing the ambition needed to stop unchecked oil and gas pollution, increase energy security, protect public health and tackle the climate crisis. NMED’s rules, which address outsized emissions from smaller, leak-prone wells and protect those living closest to development with more frequent inspections to find and fix leaks, offer a powerful example for the EPA to build on as it advances nationwide methane protections.”
— Jon Goldstein, Environmental Defense Fund

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.

Background:

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.