For the second year in a row, New Mexico ranked 35th in energy efficiency and its inherent benefits. The state scored lower than the national average and well below other states in the region. The score should concern New Mexicans and state officials because better energy-efficiency policies would help the Land of Enchantment prepare for challenges related to fluctuating energy costs and climate change, such as wildfires, storms and droughts. It is also a critical tool for withstanding and recovering from economic shocks.
As more states struggle with extreme weather events, the 2017 State Energy Efficiency Scorecard (http://aceee.org/state-policy/scorecard) gives state-level policymakers a roadmap for building stronger and more-resilient communities. The 11th annual report from the American Council for an Energy-Efficient Economy (ACEEE) shows which states are doing the best on energy efficiency.
The scorecard assesses state policies and programs that improve energy efficiency in homes, businesses, industries and transportation systems. It examines six policy areas in which states typically pursue energy efficiency: utility and public benefits programs and policies; transportation policies; building energy codes and compliance; combined heat-and-power policies; state government-led energy-efficiency initiatives; and appliance and equipment standards.
Energy efficiency means reducing the amount of energy that you need to perform a particular task. When you practice energy efficiency, you increase or maintain your level of service but decrease the energy used to provide that service through efficient technologies. Examples include ENERGY STAR appliances, compact fluorescent and LED lightbulbs, better insulation for buildings, more efficient windows, high-efficiency air-conditioning equipment, and vehicles with higher miles per gallon (mpg). Another distinct strategy is energy conservation, which means that you change your behavior or lifestyle to reduce energy use. Examples include carpooling, using mass transit, turning thermostats down in the winter and up in summer, and other behavioral changes. Improving energy-efficiency is a “win-win” strategy—it saves money for consumers and businesses, reduces the need for costly and controversial new power plants, increases the reliability of energy supply, cuts pollution and greenhouse gas emissions, and lowers energy imports. There is vast potential for improving the energy-efficiency of homes, appliances, businesses and vehicles throughout New Mexico
What New Mexico is Doing Well
The ACEEE said New Mexico scored 3.6 out of 6 points for state government-led initiatives because of the state’s sustainable buildings tax credit, along with other state-led initiatives to increase efficiency.
The SBTC is an income-tax credit to encourage private-sector design and construction of energy-efficient, sustainable buildings for commercial and residential use. The tax credit is based on third-party validation of the building’s level of sustainability. The program has been highly successful and was extended with some modifications in 2015.
The state also authorizes bonds for energy-efficiency investments, and has enabled PACE financing, though active programs have yet to be established. The state government implements a comprehensive set of lead-by-example programs, including requiring efficient buildings and fleets, benchmarking public buildings, and encouraging the use of energy savings performance contracts.
Additionally, an analysis from the Southwest Energy Efficiency Project, a regional think tank, noted that the steps New Mexico already has taken have, in fact, generated significant benefits for the state and its people. SWEEP estimates that the net economic benefits from utility-efficiency programs operating in New Mexico over the last eight years total $355 million, according to the utilities’ own data. The electric savings in 2016 also resulted in water savings of about 450 million gallons per year, enough to supply about 3,100 New Mexico households. As a result of energy-efficiency programs implemented over the last eight years, the state’s electric utilities cut their CO2 emissions in 2016 by about 514,000 metric tons, the equivalent of taking about 96,000 passenger vehicles off the road. (www.swenergy.org/Data/Sites/1/media/nm-success-story-ee-2017-final.pdf)
But while SWEEP’s report shows that the state’s utilities have improved their electric energy-efficiency programs during the past several years, data from ACEEE also highlights other areas where New Mexico falls short.
Where New Mexico Falls Behind
New Mexico’s poor ranking results from low scores on transportation (1.5 out of 10), utility energy efficiency (4.5 out of 20), building energy efficiency (2.5 out of 8), combined heat and power (1.5 out of 4), and appliance standards (0 out of 2).
Transportation: Transportation scored low because New Mexico has failed to develop any sort of policy framework to encourage efficient transportation. Unlike surrounding states, New Mexico currently offers no incentives for either the purchase of an electric vehicle or the installation of a public EV charging station, despite numerous legislative efforts by Rep. Jim Trujillo and others to implement such incentives.
Utility Programs: New Mexico also scores poorly on utility efficiency programs (4.5 out of 20). The Efficient Use of Energy Act, originally passed in 2008 and updated in 2013, is the main driver of utility-efficiency programs. The EUEA established energy savings requirements for investor-owned electric utilities of 5 percent of 2005 total retail kWh sales by 2014, and 8 percent of 2005 total retail kWh sales by 2020. The EUEA also established a fixed budget level of 3 percent of annual revenues for energy-efficiency programs.
Utility programs: All NM investor-owned utilities are on track to meet the savings requirements set forth in this legislation for 2020. The state’s utilities offer a variety of energy-efficiency programs that provide money saving opportunities to residential and commercial utility customers. However, the 8 percent savings goal is low compared to other states, and savings goals do not rise after 2020 under the current legislation.
Building Efficiency: Building energy efficiency is another area where New Mexico has significant room for improvement (Score of 2.5 out of 8). The state energy conservation code is the 2009 International Energy Conservation Code (IECC). Since 2009, four new IECC templates have been released, but New Mexico has made no moves to update its statewide codes.
CHP: Combined heat and power (1.5 out of 4) has definite room for improvement. Combined heat and power (CHP) refers to generating electricity at or near the building where it is used, and then “recycling” the waste heat and using it for space heating, water heating, process steam for industrial steam loads, humidity control, air conditioning, water cooling, product drying, or for nearly any other thermal energy need. The end result is significantly more efficient than generating cooling, heating, and power separately. The state has an interconnection standard and offers incentives for the deployment of CHP, but no new CHP installations were completed in 2016.
Appliance Standards: New Mexico has no appliance standards; therefore the state received 0 out of 2 points. Minimum efficiency standards for residential appliances and lighting have been one of the most successful policies used by other states and the federal government to save energy. Appliance-efficiency standards prohibit the production and import or sale of appliances and other energy-consuming products less efficient than the minimum requirements. These standards not only save energy but also reduce pollutants, improve electric system reliability and save consumers significant amounts of money over the life of the equipment. Standards help to assure a level playing field by eliminating products with burdensome operating costs and hastening the development of innovations that bring improved performance.
The national report can provide state lawmakers and other elected officials a blueprint for how to improve New Mexico’s energy efficiency. The state’s consumers, water supply, air quality and role in curbing climate change all would benefit from more progressive laws and policies.
Albuquerque resident Tammy Fiebelkorn is the New Mexico representative for SWEEP (Southwest Energy Efficiency Project, www.swenergy.org) and president of eSolved, Inc., an environmental and business consulting firm. Fiebelkorn has degrees in Economics and Finance from Northeast Louisiana University and a master’s degree in Environmental Economics from Colorado State University.