Senate committee advances Local Choice Energy Act
A new Local Choice Energy Act to allow municipal, county and tribal governments to take control over electric generation in their communities won initial approval Thursday morning in the Senate Conservation Committee.
Legislators voted 6-2 along party lines to send the bill to the Senate Judiciary Committee after hearing passionate pleas for and against the legislation from grassroots organizations, business coalitions and others.
Senate Democrats Carrie Hamblen of Las Cruces and Liz Stefanics of Cerrillos — who chairs the Conservation Committee — introduced the bill, Senate Bill 165, to permit local governments to launch publicly owned utilities that would take control of local electric generation away from privately run utilities like Public Service Company of New Mexico.
Electricity transmission and distribution, however, would remain in the hands of private companies.
The bill is supported by organizations that want to empower local governments to speed the adoption of renewable energy like solar and wind in their communities faster than privately-run utilities are now. It’s modeled on similar initiatives in 10 other states where supporters say some 1,300 cities and counties have significantly accelerated efforts to transition to 100% renewable generation, while also lowering electricity costs for local consumers.
Hamblen said it’s about empowering communities with new energy options beyond relying on private utilities, which have captive control over consumers as regulated monopolies.
“We don’t have a voice to be able to change the trajectory of the investor-owned corporate electrical utilities that serve 73% of New Mexicans,” Hamblen told committee members. “… If you’re a New Mexican who lives in the service area of a monopoly utility and you want power, you have no choice but to be subject to them.”
Former Public Regulation Commissioner Stephen Fischmann, who joined Hamblen in presenting the bill, said there’s no intrinsic need to rely on monopolies, because alternative renewable energy developers are available.
“There’s competition out there that local communities can take advantage of,” Fischmann told the committee.
State Land Office Commissioner
Stephanie Garcia Richard and grassroots leaders also spoke in favor, as did Santa Fe County Commissioner Hank Hughes. Both the Santa Fe and Bernalillo county commissions have approved unanimous resolutions supporting the bill.
“We want the option to pursue local choice,” Hughes said. “We’re committed to making our community 100% renewable as quickly as possible.”
Business, utility opposition
Business and utility leaders, however, questioned the need for local choice energy. They warned it could have many negative consequences, starting with deterioration in grid reliability.
New Mexico Business Coalition President and CEO Carla Sonntag said creating government-run entities to generate power that
PNM and other private utilities will deliver to consumers just adds a new, costly middleman to the grid.
“It creates pass-through entities, driving up costs and decreasing reliability,” Sonntag said. “You’re just putting someone in between energy production and delivery.”
That, in turn, could deter companies from locating here, said New Mexico Chamber of Commerce Public Policy Director Chelsea Canada.
“It can reduce our ability to diversify the economy, creating uncertainty among customers,” Canada said. “Businesses need a reliable source of power to run their businesses. That’s at the top of their considerations.”
Greater Albuquerque Chamber of Commerce CEO Terri Cole called the legislation “unnecessary and disruptive,” especially given the progress being made under the state’s Energy Transition Act, or ETA, which requires New Mexico’s private utilities to transition their grids to 80% renewables by 2040 and 100% carbon-free generation by 2045.
“This is a dramatic restructuring of our electric generation — and to solve what problem?” Cole said. “We’re well on our way to meeting the ETA goals. We should be proud of the progress we’ve made and stay the course.”
Despite the committee’s “do pass” vote, the bill could still get bogged down in Senate Judiciary, said Sen. Joseph Cervantes, D-Las Cruces, who voted in favor of the legislation. That’s because, as currently written, the bill is full of “ambiguities and inconsistencies,” requiring time-consuming efforts to rework the legal language to clearly define new rules and regulations, said Cervantes, a lawyer who chairs the Judiciary Committee.
“This bill will take a lot more work before it will ever be heard in Judiciary,” Cervantes said. “… It will need to be rewritten.”
Alysha Shaw, campaign director for Public Power New Mexico — the grassroots coalition promoting local choice energy — said her organization is open to improving the bill.
“We’ll sit down and go line by line with Sen. Cervantes if he’s willing,” Shaw told the Journal.
PNM, however, said the bill could disrupt progress on meeting ETA goals.
“We stand in sharp opposition to adding middlemen between customers and their electric power,” PNM spokesman Ray Sandoval told the Journal. “These middlemen make the grid more costly and less reliable for customers.”