New Mexico Regulators Deal A Blow To State’s Renewable Energy Law

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UNM-Taos Klauer Campus, New Mexico.

New Mexico energy regulators altered the state’s renewable energy law this week, infuriating renewable energy advocates who say the move will stunt the state’s growing solar industry. The changes made by the Public Regulation Commission (PRC) will permit utilities to use less solar energy.

Doug Howe, a former regulator with the PRC, said it appears the changes will essentially “cut the solar industry in New Mexico in half,” the Santa Fe New Mexican reported.

The rule, passed less than a year ago, establishes how much wind, solar, and other forms of renewable energy can be added by utilities in order to comply with the state’s renewable portfolio standard — a law requiring a certain percentage of the state’s electricity come from clean energy sources. Utilities then used certificates to prove to regulators that they were meeting the requirements; so one kilowatt-hour of wind, solar, or geothermal energy earned the utility one credit.

After the PRC’s vote, one kilowatt-hour of wind energy will still be worth one certificate. But one kilowatt-hour of solar energy will now be worth two certificates, and one kilowatt-hour of other types of renewable energy, such as biomass or geothermal, will be worth three certificates.

“The problem is if you are getting two credits for 1 kilowatt-hour of energy, you are cutting in half the amount of energy you have to buy or produce,” Camilla Feibelman, director of the Sierra Club’s Rio Grande Chapter, told the New Mexican after the vote. “They have essentially gutted the renewable portfolio standard.”

Proponents of the rule change cited cost as a major factor and Commissioner Patrick Lyons, who introduced the amendment, blamed renewable energy, namely solar, for raising many New Mexicans’ energy bills. However, the cost of solar energy nationwide is declining dramatically and in New Mexico, the Public Service Company recently “added a chunk of solar to its new energy plan because it was cheaper than other options.”

In February, El Paso Electric Co., a southwestern utility, agreed to purchase electricity from a New Mexico solar project owned by solar panel manufacturer First Solar, for a price lower than the going rate for coal, thanks in part to state and federal incentives for solar energy.

According to the New Mexican, the two commissioners who voted against the rule change asked for an additional week for commissioners to understand the implications of the changes but they were outvoted, with Lyons claiming that “waiting another week would allow renewable energy advocates to influence the PRC’s decision.”

New Mexico currently requires 10 percent of electricity produced for customers to come from renewable energy sources. That requirement will jump to 15 percent in 2015 and 20 percent in 2020. The requirements are critical for attracting renewable energy investment to the state and cutting back on harmful carbon pollution from coal-fired power plants.