New Mexico legislature passes 100 percent renewable power law

The New Mexico state legislature has passed a bill that requires public utilities other than rural electric cooperatives and municipalities to supply all retail sales of electricity in New Mexico with zero carbon resources by 2045.

The bill is SB 489, also known as the Energy Transition Act. Much of the Energy Transition Act focuses on procedures allowing utilities to obtain approval to abandon generating facilities which obtaining financing orders from the New Mexico Public Regulation Commission allowing the utilities to recover all of their energy transition costs through securitization -- issuing energy transition bonds whose costs the utilities pay by collecting an "energy transition charge" from their customers. The act creates funds to provide training and economic development in communities within 100 miles of abandoned facilities.

The law also revises New Mexico's renewable portfolio standard. It requires distribution cooperatives to sell at least 40 percent renewable energy by 2025 and at least 50 percent renewable energy by 2030, and sets a "zero carbon resource standard" target for distribution cooperatives by 2050, composed of at least 80 percent renewable energy, if feasible from technical, reliability, and affordability perspectives. For public utilities other than rural electric cooperatives and municipalities, the law requires similarly increasing percentages of renewable power, including 80 percent renewable energy resources by 2040 and 100 percent zero carbon resources by 2045. It allows public utilities to ask the Commission to provide financial or other incentives in excess of these amounts.

The bill passed the state senate with a vote of 32-9, and the state house with a vote of 43-22. It now goes to Governor Michelle Lujan Grisham for her signature. According to a statement Governor Lujan Grisham issued on March 12, "The Energy Transition Act is a promise to future generations of New Mexicans."

Other states are considering changes to their renewable portfolio standards, carbon emission limits, and other legal requirements affecting the electric power sector. If SB 489 is enacted into law, New Mexico will join California and Hawaii in having a future commitment or goal of 100 percent carbon-free electricity.