PNM
PNM’s South Valley Solar Energy Center, one of 15 solar sites the company has built since 2011.
New Mexico was in the first wave of states to require gradually increasing amounts of renewable energy such as wind, solar and geothermal to power its electrical grid. Signed into law in 2004, the state’s Renewable Energy Act required private utilities to ensure that 20 percent of the electricity they provide to consumers comes from those sources by 2020.
Since then, what was once a novel idea has gone mainstream. Twenty-nine states, the District of Columbia, and three territories have similar laws. More than half have higher goals than 20 percent. And after eight years of pent up desire to continue aggressively scaling up clean energy policies and infrastructure, renewable markets advocates will have a governor in 2019 in sync with their goal of increasing renewable portfolio standards (RPS) targets beyond 20 percent.
RPS standards are responsible for a “cost dive” in solar and wind energy production over the past 10 years, says Conservation Voters New Mexico policy director Ben Shelton, and can continue to drive a growth in the market.
Roughly half of all growth in renewable electricity generation is due to state RPS requirements, according to an annual report produced by Lawrence Berkeley National Laboratory. And while the role of RPS laws in spurring national growth in the field has fallen over time, in the West they are still central to renewable energy growth, the report states.
That market growth is essential, Shelton said, for two reasons. The most pressing, he says, is the need to decarbonize electricity to reduce greenhouse gases.
“Climate change is coming; it’s crushing New Mexico already,” he said, pointing to stressed water systems throughout the state.
And secondly, he said, it can be an important economic driver in the state. With so much wind and solar energy potential in New Mexico, he said, “there are jobs in it.”
CVNM pumped hundreds of thousands of dollars into the 2018 election cycle to influence who would sit on the state’s Public Regulation Commission, which regulates utilities, and who would win races for governor and state land commissioner, two positions that together greenlight new laws, manage state lands, and oversee agencies that regulate energy industries. Their favored candidates in the races for governor and state land office — Michelle Lujan Grisham and Stephanie Garcia Richard, respectively — won in the general election.
The goal for an increase in New Mexico’s RPS touted by advocates mirrors Lujan Grisham’s campaign platform for electricity powered by renewables: 50 percent by 2030 and 80 percent by 2040.
That the governor means business became crystal clear when she appointed Sarah Cottrell Propst as her secretary of the Energy, Minerals and Natural Resources Department. Propst was an adviser to Gov. Bill Richardson on energy and environment issues and deputy secretary of the state Environment Department in 2010. Before her appointment by Lujan Grisham, she was executive director of Interwest Energy Alliance, a trade association for the renewable energy industry focused on expanding markets in the West. In her role at Interwest, Propst advocated for an increase in New Mexico’s RPS.
Announcing the appointment in December, Lujan Grisham said there was “no one better” than Propst “to make sure that New Mexico, in fact, becomes the clean energy state.”
Like Shelton, Propst said the primary goal of an increase in renewables is twofold, to protect the environment by removing polluting energy sources and to diversify the economy in New Mexico.
The evolution of the renewables industry over the past decade signals that renewable energy is a growth industry, she said in an interview, but because of the pace of change it’s daunting to predict where the industry will be in 10 years.
“Costs have gone down between 60 and 70 percent for wind and solar technologies … faster than anybody anticipated back in 2007 when we were negotiating the last round of RPS increases,” she said. “So we know that this technology and cost will not stay the same for renewables or energy storage. History shows us it’s good to be ambitious, it’s good to be bold.”
Renewable energy advocates, including the governor, will benefit from November’s blue wave that swept a significant Democratic majority into the state House. Just four years ago a brief but historic Republican majority in the House voted to do away with the renewable portfolio standard. There are still conservative voices in the House and the Senate, both Democrat and Republican, who can be expected to approach proposed new renewable targets with skepticism.
Then there’s the largest industrial utility in the state, Public Service Company of New Mexico, which provides electricity to 500,000 households. PNM is retiring its coal-fired San Juan Generating Station and focused on increasing what it terms emissions-free energy. Renewables are an important part of the company’s plans.
“It’s a standard feature of a modern power supply system,” said Pat O’Connell, PNM’s director of planning and resources, who said he expected a bill this session that creates higher targets.
“Growing the RPS makes sense. I expect that to happen. How far do we want to go and how soon do we want to get there are the questions,” he said, noting that the company plans to have reached 25 percent in renewables by 2023.
O’Connell said 80 percent is a “big target,” and lawmakers should think about what their goal is. When the RPS was first created, he said, the goal was to incentivize the growth of renewables, which has successfully happened.
“Wind is cheaper, solar is cheaper, that’s why absent an RPS, renewable energy will continue to grow,” he said. “So the incentive piece is a success, and the environmental benefit piece of RPS has certainly occurred as renewable energy continues to grow.”
PNM Director of Communications Ray Sandoval emphasized that the company isn’t anti-RPS.
Policy makers are targeting 80 percent because people think RPS drives up renewables, Sandoval said. “But it causes problems for us in terms of reliability and how you support all of the renewables with the current technology on our system.”
O’Connell and Sandoval said the focus of PNM is on decreasing carbon emissions, rather than increasing renewables. The company has invested in solar and wind farms around the state and has long-term goals that include a 71 percent reduction over 2005 levels in emissions by 2025, and 87 percent by 2040. That would work out to a decrease in carbon dioxide emissions from 7.7 million metric tons in 2005 to .97 million metric tons in 2040.
But the company’s emissions-free mix includes roughly 25 percent from the Palo Verde nuclear generating station in Arizona. That percentage won’t grow — all of the emissions-free gains the company projects come from renewables. And nuclear energy doesn’t fit into the clean energy category for advocates or Propst, because of the nuclear waste it generates.
“We need to sit down with everybody in a room … the utilities, co-ops, the conservation groups, consumer advocacy groups, the attorney general’s office … and hammer something out that works,” she said. “Some of these utilities are going to have to stretch. They are by their nature conservative and advocates are going to push them and we’ll have to see what makes sense.”
Propst takes a pragmatic yet ambitious tone when discussing the future, much like Lujan Grisham often does. The governor wants New Mexico to join the group of states that have set goals for 50 percent or more, Propst said, but wants to be intentional in how to get there. And she wants to work with industry.
“We know it’s an even greater shift for our whole system (the 80 percent goal) so we want to be very careful as we move in that direction that we don’t do anything that jeopardizes reliability or increases costs too quickly,” Propst said. “Fifty and eighty are two different goals at two different points in time.”