Day 12: Eliminate or Dramatically Overhaul New Mexico’s Costly Renewable Portfolio Standard

In March, 2004, then Gov. Bill Richardson of New Mexico signed into law Senate Bill 43. This bill required sources of renewable energy to make up 5 percent of the investor-owned electric utilities sales by 2006, and 10 percent by 2011. In 2007 the law was expanded by Senate Bill 418, which accelerated the timeline and increased the mandate such that renewable sources account for 10 percent of all power generated by 2011; 15 percent for 2015; and 20 percent for 2020 and thereafter.¹

Renewable sources include energy from solar, wind, geothermal, biomass and small hydroelectric facilities. One might assume that any combination of “renewables” would be adequate in achieving the standard, but this is not the case. The standard was made even stricter by the Public Regulation Commission (PRC) which has adopted diversity requirements for Investor Owned Utilities (IOUs). These mandates require proscribe that the Renewable Portfolio Standard (RPS) must be fulfilled with:

• No less than 20% Wind;
• No less than 20% Solar;
• No less than 10% Other technologies;
• No less than 1.5% Distributed Generation (2011-2014); and
• 3% Distributed Generation by 2015.²

According to the report “The Economic Impact of New Mexico’s Renewable Portfolio Standard,” New Mexico’s RPS will cost utility rate payers $2.3 billion over the decade from 2011 to 2020.³

In this situation, both the PRC and the Legislature can have an impact. The PRC should consider eliminating the provisions mandating that certain percentages of various sources of power be used. The Legislature should reduce or eliminate the RPS levels entirely at least until new more cost-effective technologies are in place that make wind and solar economically viable absent a regime of subsidies and mandates. Nationally, wind and solar combined generate less than 5 percent of electric power generation.⁴

¹David Tuerck, Paul Bachman, and Michael Head, “The Economic Impact of New Mexico’s Renewable Portfolio Standard” American Tradition Institute and Rio Grande Foundation, February, 2011, http://www.riograndefoundation.org/downloads/rgf_nm_rps_study.pdf

²New Mexico Public Regulation Commission, “Resource Diversity and the RPS,” http://www.nmprc.state.nm.us/utilities/renewable-energy.html

³David Tuerck, Paul Bachman, and Michael Head, “The Economic Impact of New Mexico’s Renewable Portfolio Standard” American Tradition Institute and Rio Grande Foundation, February, 2011, http://www.riograndefoundation.org/downloads/rgf_nm_rps_study.pdf

⁴Zachary Shahan, “11 percent of Energy Production from Renewables in 2010,” April 12, 2011, http://cleantechnica.com/2011/04/12/11-of-u-s-energy-production-from-renewable-resources-in-2011/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+IM-cleantechnica+%28CleanTechnica%29

Day 1:  The Dire Need for Regulatory Reform in New Mexico

Day 2:  The Economic Benefits of Deregulation

Day 3:  An Introduction to Regulations and Solutions

Day 4:  Eliminate Unnecessary Construction Licensing

Day 5:  Build for Cost-Effectiveness and Efficiency, Not Arbitrary LEED Certification

Day 6:  Simplify/Eliminate Occupational Licensing For Low-Income Professions

Day 7:  Pay Market Wage, Not Union-Imposed Prevailing Wage For Public Projects

Day 8:  Eliminate Common Carrier Regulations

Day 9:  Increase Election Freedom and Election Competitiveness

Day 10:  Adopt a Right to Work Law

Day 11:  Adopt Teacher Certification System Based on Student Outputs, Not Inputs