This op-ed was authored by Steve Michel, WRA’s Clean Energy Program deputy director, and Camilla Feibelman, the Sierra Club Rio Grande Chapter director. It originally appeared in the Santa Fe New Mexican on November 9, 2019.
The Energy Transition Act is an important new law that transitions New Mexico’s electric utilities from their coal-fired past to a clean energy future. Despite widespread support, however, the law has been opposed by New Energy Economy and the coal industry’s Power the Future. Their claims about what the new law does are untrue. It is time to set the record straight.
The ETA provides millions of economic development dollars to lessen the local impacts of coal plant closures. In 2023, the ETA will save an average Public Service Company of New Mexico customer $80. It enacts one of the strongest renewable and clean energy standards in the country. And it enables low interest bonds to finance the cost of retiring coal plants. Consistent with the most current climate science, the ETA requires New Mexico electric utilities to completely decarbonize their systems by 2045.
The falsehoods advanced by ETA opponents focus on PNM’s exit from the San Juan coal plant in 2022. At that time, PNM will have unrecovered San Juan plant costs of $280 million. The ETA calls for these “stranded costs” to be paid off using low interest, AAA-rated bonds (“securitization”).
Opponents, New Energy Economy in particular, claim that this provision of the ETA gives PNM 100 percent cost recovery, takes away the Public Regulation Commission’s power to disallow stranded costs and denies the commission an opportunity to evaluate the prudence of PNM’s San Juan investments. The opponents are wrong, and the claims are false.