Last month NASA released a report that warns that the United States is headed toward a megadrought the likes of which has not been seen in 1,000 years. If nothing is done to reduce the carbon load released into the atmosphere by human activity, NASA’s climate models show megadroughts forming over much of the U.S. by the end of this century that could last 20, 30, even 40 years. That’s two, three, or four times the length of the drought that resulted in the Dust Bowl in the 1930s. If immediate action is taken to reduce carbon buildup, droughts will still happen but won’t be as severe. Meanwhile, in New Mexico, 65 percent of the state is experiencing moderate to severe drought and the average precipitation is at 83 percent for the year, according to the state’s New Mexico Drought Monitoring Working Group. Has anyone noticed how uncannily warm it was in February? What you’re noticing is the steady trend toward higher average temperatures. And in late February, the East Coast was hit with record-low freezing temperatures. Extremes on both ends. This is what climatologists are predicting and what we are already experiencing.
Given the climate alarms firing daily, it is no wonder that energy policy has become one of the most discussed issues in local media outlets and public forums in New Mexico. Especially, given our unprecedented opportunity to drastically cut our dependence on coal by replacing the San Juan Generating Station’s units 2 and 3 with renewable energy (RE). The city of Santa Fe was one of 15 parties to the replacement power case before the New Mexico Public Regulation Commission. The city was one of 11 parties to oppose the Stipulated Agreement between PNM and PRC staff, which proposes to replace the lost energy supply with nuclear imported from Arizona and the purchase of additional shares in the remaining San Juan coal units.
As the record closes on the case and the hearing examiner contemplates his decision, the Santa Fe community is considering how to reduce its energy footprint, regardless of the outcome of the case. A resolution directing city staff to explore the legal and financial possibilities and limitations for a municipal electric utility, as well as a potential partnership with the county, passed the city council on Jan. 28 with a deadline for staff to report back to the council with their findings within 45 days. The resolution, introduced by Councilor Joseph Maestas and cosponsored by councilors Chris Rivera and Peter Ives, is meant to equip councilors and the community with the information needed to determine what the next steps for public power and RE deployment should be, given that the city does not have the authority to condemn and use its powers of eminent domain to take over the electric grid. The city is therefore looking for creative ways to flex its muscles—using its home rule authority—to break open opportunities to bring the economic and environmental benefits of RE to its residents and achieve its climate change mitigation goals.
The Sustainable Santa Fe Commission voted to support Councilor Ives’ ordinance establishing the city’s authority to create a Municipal Electric Utility. If passed, the ordinance would open the door for the city to entertain competitive bids from energy suppliers (many of whom could offer significantly greater percentages of renewables) for new developments within city limits and a 5-mile radius around the city. It would also open the door for the city to explore financing and wholesale energy supply to expand its own RE projects.
Meanwhile, the city continues to try to push PNM to provide more RE through the city’s recent intervention in the replacement power case in opposition to the utility’s coal and nuclear proposal and through the city’s inclusion of PNM in the Climate Action Task Force. The company’s investments and energy plans make it hard to imagine how Santa Fe will achieve its goal of carbon neutrality by 2040 without somehow breaking free from PNM’s monopoly offerings.
The city’s Climate Action Task Force recently voted to include a caveat in its recommendations for RE action steps to the city council. The caveat points out that many of the RE proposals will be stymied by PNM’s current rate-case proposal, which includes significant disincentives for solar.
Under the current rate-case proposal, solar users will be charged a $6/kW/month access fee that will increase the cost for a typical residential installation (4.4kW) by $317 per year. PNM projects that this will reduce the rooftop solar business by 83 percent by 2017. This would be an estimated $28 million per year impact on New Mexico’s economy. PNM’s proposal also seeks to eliminate the energy-banking option for distributed generation solar producers, which would further reduce solar benefits to owners by approximately $100 per year. While these barriers to solar largely impact residential customers with the privilege of access to home ownership and the capital needed for the up-front costs associated with solar, the overall rate-case proposal will disproportionately impact working families. The proposal includes a 16.3 percent overall rate increase. The total increased cost to ratepayers is $63 million, with the greatest increases targeting residential ratepayers. If approved, residential ratepayers will have seen their rates increase by 64 percent since 2008! PNM is also proposing to increase its monthly fixed customer charge by 256 percent, raising it from $5 to $12.80, which is 59 percent higher than the average customer charge of the investor-owned-utilities (IOUs) in the region. PNM is also proposing to increase the Return on Equity, the policy that enables it to recoup 100 percent of capital expenditures plus a guaranteed rate of return (i.e., profit) from 10 to 10.5 percent. Critics of the rate proposal—and there are many; more than a dozen parties have intervened—are attacking the proposal on both economic and environmental grounds.
To learn more about these efforts and how you can get involved, visit sustainablesantafe.wordpress.com
Bianca Sopoci-Belknap is program director for New Energy Economy, director of Earth Care and chair of the Sustainable Santa Fe Commission.