Senate Bill 489 (click to download) bails out New Mexico’s largest public utility, PNM. This bill doesn’t even contemplate protecting electric customers from rapidly increasing electric rates. This bill is bad public policy that if enacted without adequate safeguard in place will come back to haunt the state’s economy and utility customers for years to come. Contact your legislators (look up here), and tell them New Mexico simply cannot afford to enrich utility shareholders by forcing rapidly rising electric rates on customers. Here’s why this bill is bad for New Mexico:

• SB 489 is bad for New Mexico and not only will increase rates statewide it will impact business, reduce jobs, and diminish state tax revenues needed for education, infrastructure and public safety.

• SB 489 gives PNM a blank check at the expense of ratepayers.

• If SB 489 is passed PNM will have the ability, completely unsupervised by PRC or any other regulatory body, to determine how much it includes in securitization of the undepreciated assets and other costs of San Juan Generating Station of an amount between $375 million and 150% of the value of those assets.

• SB 489 further requires that its customers will each pay the securitized amount back over the lifetime of the securitization bonds. Unlike last year’s bill, this year’s bill does not require PNM to show customer savings.

• SB 489 additionally requires coops (instead of Tri-State, their generation supplier) and all public utilities in the state to comply with drastic renewable energy mandates:
* An increase from 20% to 40% by 2025
* 50% by 2030
* 80% renewable by 2050 with the rest being composed of zero carbon resources (ie. Nuclear)

• The bill incentives utilities to further exceed these mandates by removing ratepayer protections and relaxing PRC oversight standards from what is in current law: reliable service at the least cost – to a standard that does not appear to actually protect increased cost to customers and is instead heavily weighted in building renewable generation at an alarming rate.

• Because renewables can only meet customer demand for 1/3 of the day, this means that customers will not only be paying for traditional generation, they will also pay for the rapid increase of renewables.

• California is only at 35% renewable and their rates have increased by 60 – 80%.

• This means in the next 5 years we can see a similar rise in rates, with rates continuing to skyrocket as mandates are increased.

• Further, by PNM’s own admission in the IRP case, renewables over 50% create excess energy that risks shorting out the grid and must be curtailed.

• Curtailment, just like in California, requires utilities to literally waste resources or pay other states to take their extra renewable power, especially solar generation.

• Anyway you slice it, this bill is bad for New Mexicans. It harms customers at the expense of increased profits for utility shareholders and renewable energy investors.

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