This year’s thirty-day budgetary session will deal with the long-debated issue of how utilities shutter aging facilities.
Multiple constituencies ranging from the workforce in Northwestern NM to Albuquerque rate-payers stand to be effected. For decades environmentalists have pushed for a shift away from coal. Now, thanks in part to the fracking revolution, market forces are moving that direction as well.
However, negotiations over how to manage that transition have stalled at the Public Regulation Commission and PNM is petitioning the Legislature to provide a vehicle for responsible and timely closure of certain energy plants. As New Mexico’s primary policymaking body, the Legislature should be involved in this process. That involvement will also allow for PNM to issue bonds at the best possible rate. Without the Legislature’s consideration AAA bond ratings may not be available. The rate-payer deserves the opportunity for PNM to attain a AAA rating because it directly hits their wallets.
Bipartisan pieces of Legislation sponsored by Sen. Jacob Candelaria (D-Bernalillo) and Sen. Steven Neville (R-San Juan) as well as Rep. Bobby Gonzales (D-Taos) along with Rep. Rod Montoya (R- Farmington) have been introduced in the form of the Energy Redevelopment Bond Act (SB 47. and HB 80 respectively)
Opponents to SB 47 and HB 80 champion a false narrative that these bills burden taxpayers with a bailout and that the legislation removes regulatory authority of the PRC. Both of these arguments contradict the language of the bill.
Comparisons to tax-payer “bailouts” are misguided because they conflate tax-payer bailouts of (mainly) banks with a private financing tool aimed at mitigating costs to PNM customers. Note: any bonding process/application still must be approved by the PRC.
From a fiscal, taxpayer, and rate-payer perspective the Rio Grande Foundation is comfortable with the bonding approach outlined in this legislation. Unfortunately, a potential amendment to the legislation would increase New Mexico’s “Renewable Portfolio Mandate” (RPS) to 50% from 20% where it will be in 2020. The Rio Grande Foundation opposes raising New Mexico’s RPS due to the potential cost to rate-payers.
Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.