New Mexico's legislature passed the Energy Transition Act, this week. The Bill, supported by the state's Governor, is expected to put NM on course to become 100% Carbon free by 2045
A ground-breaking renewable energy bill heads to New Mexico Gov. Michelle Lujan Grisham for her signature this week. The bill has been passed by the New Mexico House of Representatives last week.
The bill after passage will mean that New Mexico can quickly transition from its dependence on fossil fuels for electricity to joining other states like California, New York and recently Illinois, to lead a new clean energy economy. New Mexico is unique among these states because it is a relatively coal-heavy state, generating 1.5 gigawatts of coal-fired electricity as of November 2018.
The law will pave the way for New Mexico utilities to get at least 50 percent of their electricity from renewable energy by 2030, 80 percent by 2040, and be 100 percent carbon-free by 2045.
Rob Sargent, the senior director of Environment America’s clean energy program, issued the following statement:
“This is great news for New Mexico and it’s great news for national progress on renewable energy. We need to take bold action against climate change and we’re counting on the states to lead. By passing the Energy Transition Act, New Mexico will join the ‘A team’ of climate leaders. We look forward to working with Governor Lujan Grisham to ensure that New Mexico joins California, Hawaii and the District of Columbia with 100 percent clean electricity laws on the books.”
“Heartland states including Minnesota and Illinois and coastal states such as Washington, Massachusetts and Florida all are currently considering 100 percent bills, and can now follow New Mexico’s lead.”
The bill responds to the economic changes brought about by the decline of coal power in US. New Mexico’s largest coal plants are no longer economical and the utilities, both in state and around the region, are closing them down. By directing new investment in the community where these plants will close and ensuring replacement power will also be located there, the new law will help mitigate the tax base loss and spur new clean energy jobs. It will also set new standards for energy generation projects.
The bill also uses a financial tool to save US customers money in the move away from coal. The bill would allow use of a tool called securitization, which is not currently available to the Public Regulation Commission. Securitization would provide a low-cost financing method to pay off coal plant costs and close the facilities. Securitization is like refinancing a mortgage at a lower rate. The utility would give up all earnings on the remaining capital and instead utilize lower interest, AAA-rated bonds to reduce the overall cost of closing coal plants by as much as 40 percent. Customers will get even further savings because using new renewable energy is now cheaper than running the aging coal plant.