In response to public demand, the Renewable Energy Act (REA) was passed in 2005 establishing a statewide goal of 20% renewable energy on our grid by 2020. Twenty-eight other states have similar goals. The REA also requires diversification of source of the renewable energy. The Public Regulatory Commission (PRC) is responsible to implement REA and adopted a requirement to have 30% wind, 20% solar and no less than 3% distributed generation (systems on homes and businesses).
Now the PRC is folding to pressure from the utilities to eliminate the diversity targets altogether. Utilities would be free to procure the lowest cost renewable energy that may have no economic or energy security benefit to New Mexicans. The utility companies make a number of arguments against renewable energy, but they are not founded in fact and it is clear that they are defending the status quo of fossil fuel based energy against the wishes of New Mexicans.
One of the common arguments is that renewable energy is too costly and ratepayers are burdened with the high cost. We must ask- “compared to what?” In the last ten years in the U.S, utility fossil fuel costs have increased an average of six per cent per year. My current PNM electric rate has increased seven per cent per year since 2006. PNM’s coal plant operating costs have increased an average of over 8% per year between 2004 and 2012. This increase excludes any renewable energy or other rate tariffs.
In contrast, the PRC has set a limit on investment in renewable energy increases to just 3% per year. With wind and solar resources, there is no fuel cost so there is no future price uncertainty. According to a June 2011 analysis referenced by El Paso Electric, solar electricity is already cheaper than power from a natural gas peaking plant. And this analysis was done before the recent thirty per cent drop in solar electric prices.
Also, consider that the cost of using solar electricity to charge an electric vehicle, before any federal or state tax credits, is about four cents per mile. This compares favorably to about eleven cents per mile with gasoline (assuming 30 mpg at $3.28 per gallon). This means that New Mexicans can reduce their fuel costs for transportation by over 60% with solar.
In 2006, customer-owned solar power aka distributed generation cost $130 per megawatt-hour. Today, just eight years later, the cost per megawatt-hour is only $40. That is an annual decrease of over fourteen per cent per year. Similar cost reductions have been achieved by PNM for its large scale solar electric projects over the last several years.
The argument that renewable energy is too costly is a myth.
The REA states that this Act can bring “significant economic benefits to New Mexico”. In a recent study by Political Economy Research Institute on investing in clean energy, they found that renewable energy creates about three times more jobs than fossil fuels per megawatt of power.
Should renewable energy act be weakened by the PRC? We would argue no, that it should instead be strengthened. But this PRC is strongly pro-fossil fuels, so this is not likely. So let’s voice our opinion and stop the PRC from deleting the diversity requirement and hacking away at the well-crafted and highly successful Renewable Energy Act.
THE PUBLIC REGULATION COMMISSION WILL HOLD A PUBLIC COMMENT HEARING ON SEPTEMBER 10, 2013, BEGINNING AT 8:30 A.M., 4TH FLOOR HEARING ROOM, LOCATED AT 1120 PASEO DE PERALTA IN SANTA FE, NM.