January 2012

A Response to the PRC’s Decision on PNM’s Renewable Energy Plan


Allan Oliver

The New Mexico Public Regulation Commission has issued a decision on PNM’s renewable energy plan that will have a significant impact on renewable energy (RE) in NM. The NM Green Chamber of Commerce (NMGCC) was disappointed with the PRC’s overall decision, which we believe is a step backward for solar energy and job creation. During this recession, the RE industry is one of the few sectors that has grown in NM, creating new, higher paying jobs, expanding payrolls and bringing new revenue to the state.


Among other things, the PRC’s decision will:


1. Extend for six months but reduce production-based incentives for both small and large solar photovoltaic systems.

2. Require PNM to re-file within 60 days, a plan that would bring it into compliance with the state’s RE standard of 10% RE by 2014 – three years after the 2011 deadline. Depending on what specifics are in PNM’s plan and what the PRC ultimately approves, this “get in compliance” requirement could be positive for continued RE development in the state.


We applaud the Commission’s decision to require PNM to re-file a new plan to move it from its original plan of less than 6 percent RE – into compliance with NM’s 10 percent Renewable Energy Standard (RES). NM’s two other investor owned utilities, El Paso Electric and Southwestern Public Service, will meet the 10 percent RES next year with a set-aside for solar. As the largest utility in the state, we hope PNM will step up to the challenge.


The NMGCC has advocated and will continue to push for the following:


1. A robust and predictable Solar Incentive Program. This is the number one way to directly grow our solar industry in NM. Supporting this program means supporting hundreds of good paying jobs. It should be extended for at least two years to provide the certainty that our solar businesses need to continue hiring and investing. It will also save administrative costs of PRC cases associated with governing PNM’s plans.

2. Recognition and full consideration of the traditional generation (e.g. coal and natural gas power plants) costs avoided by RE. Energy economists have repeatedly demonstrated that RE provides tangible benefits to our electricity grid and makes it possible for PNM to avoid or delay investments in new generation capacity that would otherwise be necessary. RE projects should be credited for these benefits, starting at the time they are interconnected. When conducting a cost-benefit analyses between renewable and traditional sources of generation, the PRC must require the utilities to put renewables on a “level playing field” with traditional sources of power in order to provide a fair “apples-to-apples” cost comparison.

3. PNM should be required to purchase Renewable Energy Credits (RECs) bundled with their associated energy. Because RE has long-term benefits for our electricity grid, it is most cost-effective for PNM to purchase RECs bundled with that associated energy. Bundled RECs are also the best way to create more jobs for New Mexicans because they require that new RE installations be built in state.

4. PNM should be required to use the most current information available and be fully transparent in those calculations. It is only fair and proper to use 2012 revenue forecasts in making decisions about their 2012 program, for example. PNM must be required to demonstrate that they are doing everything possible to expand RE and meet the state’s RES requirements.



Allan Oliver is CEO of the NM Green Chamber of Commerce. www.nmgreenchamber.com



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