A group of New Mexico lawmakers is asking state utility regulators to launch a study that would evaluate shifting the state’s electric sector to public power.
The lawmakers said in their petition filed at the New Mexico Public Regulatory Commission (PRC) that they “believe that it is probable that public ownership of the electrical utilities that serve New Mexico would benefit New Mexico’s ratepayers, New Mexico’s businesses, and New Mexico’s state, local and tribal governments.”
The lawmakers said that the PRC should oversee a comprehensive study that would address questions that would include, among others:
- Would the pursuit of a publicly controlled utility authority at the state level advance the public interest, in both a “traditional” public utility perspective and an expansive 2021 and beyond regulatory framework that breaks up utility monopolies and supports tribal community and state energy rights, and its interactions with other disruptions that will be occurring simultaneously in the transportation, health, and building sectors during the 2020s and comprehends climate emergency needs?
- What are the benefits, costs, and risks associated with such a transition?
- What are the high-level cost reductions or increases of replacing private investor-owned utilities with public power?
- What is the revenue potential of exporting excess renewable energy and job creation opportunities?
- What is the technical, financial, and legal feasibility of pursuing public power for New Mexico?
- What would be the best design for such a transition? The study should compare and contrast the costs and benefits of the status quo versus a publicly owned power authority and Community Choice Aggregation.
The lawmakers said that within the next decade trillions of dollars will be invested in energy infrastructure across the United States. “From federal policies to market forces to the inevitable replacement of retiring fossil fuel plants, the transition to renewable energy sources will necessitate a massive restructuring of not only the power grid and generation sources, but energy markets, ownership and control,” the petition said.
“With some of the highest solar and wind capacity of any state in the nation and the ability to deliver terawatts of energy to our neighbors and beyond, New Mexico will be presented with numerous opportunities and important decisions as this transition unfolds.”
But the lawmakers argued that the transition is not being facilitated effectively by the state’s current IOU structure. “Despite New Mexico’s abundant natural resources, second in the country for solar potential and 11th in the country for wind potential, and the sun Zia on our flag, each of the state’s investor-owned-utilities have relatively small percentages of renewables in their energy portfolios.”
They said that under the current energy model, investor-owned-utilities’ plant ownership and energy investments “require a return on equity that creates a perverse incentive NOT to invest in energy sources with fixed capital costs and no fuel costs.”
The lawmakers said that under the IOU model, returns on investments and profits -- at least in the case of Public Service Company of New Mexico, with a return that is 9.575% annually, are exported to Wall Street.