RENEWABLE ENERGY RESOURCES IN NEW MEXICO
by Lance Adkins
In May of this year the New Mexico Public Regulation Commission (NMPRC) issued a "Notice Of Inquiry" (Case No. 3619) into the subject of renewable energy as a source of electricity generation. When the Legislature determined that deregulation in New Mexico should be delayed by five years, all provisions of the Electric Utility Industry Restructuring Act of 1999 were put on hold, including mandatory provisions in support of renewable energy. The Act included mandatory purchases of renewable energy and established a "Systems Benefit Charge" to support the development of renewable energy projects in New Mexico. Under the Act, cooperatives and municipally owned electric utilities were exempt from mandatory renewable energy purchases under certain circumstances; however, all New Mexico consumers would be subject to the Systems Benefit Charge.
The NMPRC finds that "Notwithstanding the delay in restructuring, the Commission considers the encouragement of the use of renewable energy desirable." Further, they cite recent extreme volatility in natural gas prices and our Nation's heavy reliance on non-renewable fuel supply (natural gas and coal) for electricity generation, as a primary factor in pursuing renewable energy development.
Commissioners also note our State's abundant solar, wind, geothermal, and biomass potential as a way of reducing the effect of price volatility in traditional fuel sources by increasing the diversity of fuels used in the generation of electricity. Commission staff, utilities, and other interested parties were asked to file written comments and proposed rules by September 14, 2001.
Comments I have seen to date include proposals from Commission Staff, Southwestern Public Service Company (SPS), Public Service Company of New Mexico (PNM), El Paso Electric (EPE), Cielo Wind Power Co., Coalition For Clean Affordable Energy, and the New Mexico Sustainable Energy Collaborative. I believe it is safe to say all comments to date agree that further development of renewable energy resources is a worthy goal. Major differences center around how to fund these projects, with most utilities favoring allowing consumers to voluntarily purchase renewable energy, and others favoring that utilities be required to purchase a set amount of renewable energy for all consumers. Some favoring mandatory participation (Renewable Portfolio Standard for utilities) have suggested utilities be required to purchase a minimum of 5% of their wholesale energy from renewable energy projects located within the State of New Mexico. Unfortunately, most renewable energy resources available today cost considerably more than traditional (coal and natural gas) generation resources. So the question is; should consumers be forced to purchase renewable energy, or should renewable energy be a voluntary option available from their local utility? Many point out that so long as renewable energy costs are higher than traditional resources, consumers are unlikely to participate on a voluntary basis.
Cooperatives have participated in these discussions through our statewide association, the New Mexico Rural Electric Cooperative Association (NMRECA). Our comments have centered on the fact that Cooperatives are consumer owned and controlled through an elected Board of Trustees. If Cooperative members desire renewable energy options they have a voice in those decisions today, and do not require legislative or regulatory mandates to accomplish this goal.
In addition, Cooperatives in New Mexico already receive a portion of renewable energy from federal hydroelectric projects located in Colorado. For a number of years, Farmers' Electric has received an allocation of renewable hydroelectric power, generally in excess of 10% of total wholesale energy purchased. This power source has historically been purchased at a lower cost than wholesale power we purchase from Southwestern Public Service Company (SPS), resulting in savings to our member/consumers. If the Commission's final rule mandates renewable energy be purchased from sources located within the borders of New Mexico, our current purchases from renewable energy resources in Colorado will not satisfy the rule.
At this time, the NMPRC has scheduled a workshop for all interested persons on Monday, October 22, 2001, at 10:00 am, at Marian Hall, 224 East Palace Avenue, Santa Fe. For more information you can contact the NMPRC directly at 1-800-663-9782 or (505) 827-6940.
Lance Adkins is the General Manager of Farmers' Electric Cooperative in Clovis, New Mexico, providing electrical service to approximately 10,500 meters in New Mexico.
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