Proposal has no power

Local Choice Energy Act would imperil grid, risk clean energy progress

“If it ain’t broke, don’t fix it” and “a solution in search of a problem” are apropos idioms for a legislative proposal for dozens, if not hundreds, of government units in New Mexico becoming electric utility brokers.

Senate Bill 165, the Local Choice Energy Act, promises a regulatory nightmare that puts reliability and our state’s progress toward clean energy goals at risk.

Proponents claim giving local governments the ability to price electricity would end the monopoly maintained by electric utility providers — some investorowned and some member-owned cooperatives.

Supporters also argue local energy management could speed up renewable energy production (as if local elected leaders have more of an incentive than utilities and the Public Regulation Commission, much less the expertise). And they assert local oversight would lower costs for consumers and create jobs in the process.

But, consider the city of Deming, which decided to get into the natural gas business.

Deming provides natural gas to about 6,000 customers, which it buys through an out-of-state supplier, Houston-based Symmetry Energy Solutions. After Symmetry Energy Solutions jacked its per-unit price from about $1.30 to $3.30, residents were shocked. Michael Urbina told the Deming Headlight his January gas bill was $906, up from $160 a year ago, and La Fonda Restaurant owner Oly Ortiz said her bill topped $4,000.

The city has committed $1.5 million of its gas utility fund to an emergency rebate program to help offset the spike in customer bills. That’s an expensive lesson, likely for taxpayers and ratepayers. Meanwhile, the state Auditor’s Office is investigating the city’s skyrocketing utility costs and the city had to close its municipal offices in January after numerous “telephonic threats” against staff because of the high gas bills.

SB 165 could replicate Deming’s bungle on mass scale. The bill would let local governments essentially become day traders that buy electricity on the open market, leaving transmission and distribution in the hands of professional utilities. That would mean customers would get two electricity bills — one for the power their local government was able to purchase on the open market, and one for transmission and distribution costs from PNM Resources, Southwestern Public Service, El Paso Electric or their electric cooperative, the professionals who actually maintain electrical grids.

PNM says the local energy initiative could actually raise rates for customers, while creating significant grid reliability issues. Government utilities don’t have the experience to buy electricity on the wholesale market or acquire alternative power in a crisis. So, why would customers have any confidence that Deming, for example, could get electricity cheaper than a standard utility?

And if you, the customer, want to leave it all to the professionals? You can. But it takes extra effort. This is an opt-out program, meaning consumers now served by

PNM or other utilities have to notify any newly formed government utility directly within 60 days that they want to stay with PNM or another established utility.

Regarding reliability, allowing myriad local government utilities to go their own way means there’s no centralized authority to monitor or regulate. And would dozens of local energy entities get the oversight the Public Regulation Commission provides utilities now? Not likely. SB 165 promises to be a jobs program for hiring regulators, as well as a regulatory nightmare.

As for advancing the move to cleaner energy, privately owned utilities are well on their way to meeting standards of the 2019 Energy Transition Act, which sets a statewide renewable energy standard of 50% by 2030 for investor-owned utilities and rural electric cooperatives, 80% by 2040. Such investor-owned utilities as PNM and Southwestern Public Service Co. have been investing heavily in carbon-free electric generation. PNM has reached 55% carbon-free electricity and is on track to beat the state’s 100% carbon-free goal by 2045.

SB 165, which passed the Senate Conservation Committee in late January and sits before the Senate Judiciary Committee, is a rehash of utopian bills that didn’t get very far in 2019 and 2021, and for good reason. It’s another progressive trend targeting for-profit entities modeled on a national movement usually called Community Choice Aggregation. Versions have been disastrous in Massachusetts, Illinois and California.

The Bernalillo County Commission, which years ago decided it wanted to take over running the jail (and we know how that’s turned out), is all on board, as is the Santa Fe County Commission. A Doña Ana County commissioner sent in a guest column last week in support, as well. Apparently, our most populous counties have solved all their crime, jobs and housing issues. Their city counterparts offer a reality check: Albuquerque City Council President Pat Davis wrote in a Feb. 19 guest column, “no one who thinks their local electeds aren’t doing enough to solve housing, crime or just deliver basic services thinks it’s a good idea to add running utilities to their plates.”

And Santa Fe City Councilor and Mayor Pro Tem Signe Lindell noted in a guest column the same day, “there are so many things our government does exceptionally well, but there are also times we need to realistically assess and accept that local government is not the proper service source.” Amen.

We’re not fans of monopolies. We are fans of having the lights turn on when we hit the switch, people with expertise get us the best price, a uniform path to cleaner energy and a manageable regulatory process.

Creating government-run entities to generate power would add a new, costly middleman to the electric equation, imperil our electric grid and stymie progress on clean energy. New Mexico’s system isn’t broken and doesn’t need this so-called “fix.”