Thank enviros for PNM 12% rate hike — and more hikes to come

With the 2015 legislative session around the corner, things have been pretty busy at the Rio Grande Foundation, but we didn’t miss the announcement by PNM that the company would be asking for a shocking 12 percent rate hike for residential customers. Of course, this is just a down-payment on what the radical environmentalists and the Obama Administration would like to do to your utility bills.

PNM (now the only publicly-traded company in NM) won’t blame them outright because they already have to deal with these well-funded groups and their allies in Santa Fe. The reality is that the Obama Administration is out to bankrupt the coal industry with its costly new regulations. And New Mexico’s policymakers have previously saddled us with a costly renewable portfolio standard mandate which will get more expensive as it is fully-phased in by 2020.

Environmentalists (and New Mexico’s Senators) only express public support for wind and solar. Coal, oil, natural gas, and even nuclear (the fuels that actually work to provide reliable, affordable power) get nothing but scorn.

As motorists celebrate newly-inexpensive gasoline, we better take note that if we don’t stand up to the radical environmental groups, those savings will be more than wiped out by higher utility costs that will do nothing to reduce global warming.

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30 Replies to “Thank enviros for PNM 12% rate hike — and more hikes to come”

  1. Environmental policies have made utility rate hikes inevitable — which is why I installed solar panels on my roof six months ago. The irony is that the same politicians who carp about income inequality are giving generous subsidies to people who can afford the major investment of solar panels while sticking it to the average ratepayer.

    When my enviro friends compliment me on my solar panels, I tell them they were manufactured in a factory in China powered by coal.

  2. Not too long ago, radical environmentalists spiked old growth trees and burned up SUVs. Now they lobby to keep electricity users in Albuquerque from poisoning the people in San Juan county. Your divisive commentary forgot to mention that your friends at PNM also intend to lower the cost of their poisonous electricity for the big users while raising it for those who try to conserve and those who are poor.
    For strategic reasons unclear to many, PNM will drive their small (but many) high rate users off the grid in the coming years. Odd calculus. Maybe the big (but few) low rate payers have threatened to go off grid themselves.

    1. Pat’s use of ‘divisive’ reveals her true intent, shared by her radical friends. It means that Paul dared to question the dogma of anthropogenic global warming. Any opinion that doesn’t follow the party line is divisive and dangerous.

      1. David, neither Paul nor I mentioned global warming in this thread. I was ribbing Paul for pitting people concerned with pollution against the consumer. This is a false dichotomy. It is not in your interest or mine to accept ground level ozone, sulfur dioxide, mercury, or carbon monoxide as a necessity of doing business. We can do better than that. We live in a time when we do not need to pollute ourselves to death for the benefit of the PNM shareholders.
        By the way, I’m a grandpa and small business owner building capital equipment for manufacturing. Careful what you assume.

        1. Pat the EPA regs are over the top and designed to bankrupt the coal industry. The alleged science is wholly fabricated within the department:

          http://www.cfact.org/2014/10/28/epa-hides-science-behind-draconian-regs/

          EPA Hides Science Behind Draconian Regs

          To justify this latest incidence of rampaging regulatory overreach, the EPA has devised a “social cost of carbon” which supposedly monetizes damage linked to CO2 based upon climate and other risks. In doing so it first arbitrarily pegged this cost at $22 per ton of emissions, and then raised it to $36 per ton. As explained by my friend Paul Driessen, a senior policy analyst with the Committee for a Constructive Tomorrow, the agency “adjusts and averages raw data at will, cherry-picks, distorts, and exaggerates results — then hides its analyses from public inspection and correction.” Driessen further notes that, “Even recognized experts and members of Congress are precluded from examining secretive and often questionable data, research, peer reviews, computer algorithms and analytical processes.”

          Although taxpayers and consumers pay for this information, Administrator Gina McCarthy maintains that she will continue to “protect” it from those she deems “are not qualified to analyze it.” This apparently excludes pretty much everyone other than EPA and its insider cronies. Even the nonpartisan U.S. Government Accounting Office — GAO — has found that EPA reports were “not always clear” in providing information which “enable a third party to understand how the agency arrives at its conclusions.”

          http://www.cfact.org/2014/09/24/phony-environmental-justice-at-epa/

          Phony “Environmental Justice” at EPA

          Our air is already safe. The EPA’s own Urban Air Toxics report chronicles reductions of 66% in benzene levels, 84% in airborne lead, 84% in mercury from coal-fueled power plants, and over 90% in particulates (soot). So the EPA pays its Clean Air Scientific Advisory Committee and the American Lung Association millions of dollars a year to say otherwise. “Investing” in “Green” energy technologies requires taking greenback dollars from hard-working taxpayers – and delivering them to crony corporatists and campaign contributors who seek hefty profits from climate scares and renewable mandates. Wind and solar electricity are inherently unreliable and cost many times more than power generated with coal, natural gas, or nuclear.

          Comeon Gallagher, get off your idealog enviro wagon and do some proper research!

  3. The NM Legislature, the EPA, the Obama Administration, the PRC, PNM and the radical enviro lobby in Santa Fe have all come together to foist much higher electric rates on the citizens of NM. Apparently it makes no difference to the above entities that senior citizens on fixed incomes, middle class, and the poor will struggle to pay their electric bills and buy groceries at the same time. Higher electric rates will only serve to place more people in the “low income bracket” and taxpayers and other ratepayers will pick up the tab. The Rio Grande Foundation is correct is saying that there is more to come.

  4. After a little digging I found an important piece of the puzzle:
    In Albuquerque Industrial users of electricity pay 5.87 cents per kWh, commercial 10.20 and the small users pay 12.31 cents per kwh.
    This means that indeed the large number of small users are subsidizing the industrial users by a rate difference of more than 2:1. PNM must stop saying it is the other way around, (repeated in today’s Alb J).

    Ref: http://www.electricitylocal.com/states/new-mexico/albuquerque/

    1. Pat,

      I generally agree with what you are saying here. I don’t know enough about the utility market to be sure who is subsidizing whom. After all, if you are a large user and you use at a steady rate, that can be very easy to manage for utilities. If your usage is inconsistent or only peaks at certain time, that is perhaps another issue. The easiest way to solve all of this is to have a truly competitive, unsubsidized utility marketplace.

      In the absence of that, some transparency and explanation of the arguments on the rate hike would be helpful. I don’t think many people of any stripe are going to support the PNM rate hike without a major educational component. However, there is no doubt that the ever-increasing regulations and government demands for so-called “renewables” is a big part of PNM’s push for this rate hike.

      1. Once upon a time, we had to have a monopoly to provide us with electricity. As monopolies go, they had to make their case to the PRC to maintain their 10% monopoly margin. They had to set rates, not pollute the air and water (too much) and do a lot of things to keep their monopoly. They had to invest in big GE turbines and keep them spinning to to get the 10% allotted profit.

        Technology is ruining that model. The turbines will not be required any more and they will become stranded assets. Scrap. The shareholders will not like this nor will the banks and bondholders that hold their paper. Investor owned utilities all over the world are facing the same problem. Solar power is going to take over the small user market. Wind will supply larger industrial loads. Batteries will become as normal as refrigerators. Technology is obsoleting the GE turbine. The grid will be less stressed because there will be fewer people tied to it.

        One way to cause this revolution to happen faster is to make the coal spun turbines clean up their smokestacks, so they are as clean as PV. Obviously they can’t do that. We do not need subsidies for solar; we need to face the health costs of coal. In either case the real cost of electricity should go up.

        PNM has a moment in time when they can see the future and invest, not in lobbyists, but in moving the small user off the grid. They will be leaving anyway, especially when they realize PNM’s new rate case intends to increase the burden on them, the small user, while further cutting the price for the big users.

        BTW if we take away PNM’s subsidy to the industrial users (6 something cents per kWh) and have everyone pay the same, Intel, UNM, and City of Albuquerque will create their own power utilities. The technology is there.

        The investor owned utility monopoly is dying. This poorly constructed new rate case is a morphine drip to ease the demise.

        1. Let’s get rid of all subsidies then. Federal and state subsidies/mandates for wind and solar (and clean coal) need to be abolished. Seems like when you talk about ALL subsidies, the enviros disappear.

          1. You mean no airports or interstate highways? No nuke waste repositories? No Sandia working on testing solar panels? I don’t think your version of free-markets can tolerate that.

          2. Private sector handles airports and highways in most European countries. Yes, I’d get rid of that. Perhaps the states could handle it? There is no central nuclear waste repository. I’m okay with having the feds handle this only because it is a national security issue.

            But you know we’re not really talking about these side issues. We’re interested in mandates, tax credits, the RPS, and the Solyndra’s of the world. I’m okay with a revenue-neutral carbon tax if it can be administered. That at least maximizes efficiency. Mandates and cross-hatching subsidies is the worst thing. Ethanol is a total boondoggle as are the wind tax credits.

          1. The Google engineers’ purpose in writing their IEEE Spectrum article

            http://spectrum.ieee.org/energy/renewables/what-it-would-really-take-to-reverse-climate-change

            was to say that renewables won’t solve the CO2 problem alone. It is a very interesting article; you should read it. I’m not talking about the CO2 problem because it is being used as an excuse to do nothing about the mundane but deadly pollution coming from coal-fired power plants. This is a local problem with a local solution. It is a problem that we can do something about.

            Also, the costing used in the Spectrum article is from 2011 and before. The cost of PV has plummeted since 2011 such that now it is a better deal than coal when it’s transmission lines are 20 ft (rooftop) not 200 miles (four corners).

        2. Gallagher

          You have little idea what your talking about. Solar and wind are subsided about 50x more then coal and even more then natural gas. Your assumptions are based on enviro crap:

          Consider what Google and 2 Standford Professors concluded:

          http://wattsupwiththat.com/2014/11/22/shocker-top-google-engineers-say-renewable-energy-simply-wont-work/

          Nov 22, 2014

          Shocker: Top Google Engineers Say Renewable Energy ‘Simply Won’t Work’
          According to the IEEE article;

          “Even if one were to electrify all of transport, industry, heating and so on, so much renewable generation and balancing/storage equipment would be needed to power it that astronomical new requirements for steel, concrete, copper, glass, carbon fibre, neodymium, shipping and haulage etc etc would appear. All these things are made using mammoth amounts of energy: far from achieving massive energy savings, which most plans for a renewables future rely on implicitly, we would wind up needing far more energy, which would mean even more vast renewables farms and even more materials and energy to make and maintain them and so on. The scale of the building would be like nothing ever attempted by the human race.”

          And this is what mandated and over-subsidized renewables will get you:

          http://americanenergyalliance.org/2014/11/21/europes-green-energy-dream-has-become-a-nightmare/

          Europe’s “Green Energy” Dream has Become a Nightmare

          “In 2013, average residential electricity rates in European Union (EU) countries were more than double rates in the United States. Regulatory structures—including taxes and other user fees, investment in renewable energy technologies, and the mix and cost of fuels—all influence electricity prices…Taxes and levies explain high prices in some European countries. EU countries taxed residential electricity rates at an average of 31% in 2013, up from an average of 23% in 2006.”

          Your drinking the koolaid coca-cola cowboy. Do some real research before you start ranting.

          1. Somewhere up in this thread Mr. Guessing and I already addressed the IEEE article. It is about global warming. Here we are discussing pollutants from coal fired power plants.

  5. For one guys, (esp. Pat) there is no manmade global warming/climate change. Secondly, the last government interference in business should have happened when monopolies were made illegal. Most other regulation, including having to use solar or wind is contrary to a free market/capitalist system. Transparency, an honest public debate and competition is what we need along with lower taxes. The expense of energy in NM is also just one of the problems, along with an anti business tax code, that keeps NM citizens poor and frightens business away. Our welfare dominated State needs a lot of help. Environmental activists are a big part of the problem.

    1. Paul C., A transparent, honest debate will require attention to scientific and legal detail with little regard for sweeping unsubstantiated opinions. Is everyone up for that?

      1. Well Pat, if we can start by acknowledging there has been no warming of the Earth for at least 16 years; that the “hockey stick” graph is a hoax; and that over reaching EPA and other government regs add 25% to the cost of business in the US, Sure. Are you up to that? That is not opinion. It is fact.

  6. A revenue-neutral carbon tax? Good! How about a tax on mercury, ground level ozone, oxides of nitrogen, sulfur dioxide; things that are driving up health costs?
    We cannot reasonably debate climate change because neither side is trying to solve the real pollution/health problem. Both sides just want to push it off on someone else or some institution to solve. No one wants to admit that consumers and wasteful consumption are driving the pollution/health disaster. Everyone seems to want to “debate” and not do the things that could be done.
    Coal needs to be an expensive way to generate electricity. With an eye on health costs, a carbon tax will do the job. In sunshiny NM we may not even need that to take down the San Juan Generating Station (all of it).

    1. EPA Needs To Get Real On Pollution Retrofit
      by Staff | May 24, 2012 |

      The Environmental Protection Agency has ordered PNM to install selective catalytic reduction controls on its San Juan Generating Station. EPA officials have insisted that should cost around $345 million. But just like the government official who doesn’t mind spending your money on a GSA blowout, that estimate shows EPA bureaucrats don’t appear to have a clue what installing SCR would actually cost in this plant or its true impact on New Mexico ratepayers.

      PNM and the state Environment Department also have recommended an alternative technology — selective noncatalytic reduction, or SNCR — which will offer an almost as clear a skyline for a cost of $77 million or less. Howe and Marks’ version would add to the SNCR conversion of coal burning units a yet-to-be-determined cost to convert one or more of the plant’s 4 units to natural gas-fired combined cycle technology. So instead of investing hundreds of millions of dollars in old technology, the plant would invest in New Mexico natural gas, putting more money into state coffers and fewer emissions into the state’s air.

      Total annual releases of mercury to the atmosphere from such natural sources are about 5,200 metric tons per year. Data published in the refereed scientific journal Atmospheric Chemistry and Physics Discussions indicate that the amount of mercury released into the atmosphere by human activities – mainly from smelting of metals and combustion of coal – is about 2,320 tons.

      The total contribution from all human activity in the United States to the global mercury flux is approximately 120 tons, or about 1.6% of the total. The amount coming from U.S. coal-fired electricity plants is around 48 tons, 0.6% of the global load. But mercury can reside a long time in the atmosphere – up to 2 years, so, unless it quickly rains out as “wet deposition”, it’s likely to disperse far, far away. In fact, only about 25% of the mercury emitted by our power plants, or 0.2% of global emissions, falls on our soil. The fact that mercury can reside as long as 2 years in the atmosphere is why at least well over 50% of the mercury deposited here is of foreign origin.

      U.S. forest fires emit at least 44 tons per year; cremation of human remains discharges 26 tons, Chinese power plants eject 400 tons; and volcanoes, subsea vents, geysers, and other sources spew out 9,000-10,000 additional tons per year.” “Since our power plants account for less than 0.5% of all the mercury in the air we breathe, eliminating every milligram of it will do nothing about the other 99.5% in our atmosphere.”

      Hows the education coming Gallagher?

      1. Thanks Scottar for the unattributed paragraphs lifted from the Mountain View Telegraph Opinion section. There are better educational sources.

        When pollution is averaged over large swaths of territory, the actual concentrations near the plants are ignored. Looking only at mercury also skirts the local coal toxicity issue. Ground level ozone is causing significant asthma problems in San Juan county but some of that is coming from the other fossil mining. Sulfur dioxide emissions attributable to PNM and APS coal are subjects you can look up as well.

        Keep up the enlightenment process!

    2. I don’t know about all of those other chemicals/pollutants. I do know that America has made vast strides in cleaning up electricity generation (including that from coal) and that our air is cleaner than it has ever been. Yes, the Clean Air Act has had a lot to do with this, but technology and some degree of self-interest has also led to reduced pollution.

      So, how best to focus limited resources on the most severe pollution problems impacting human health? How best to continue producing safe, reliable, inexpensive electricity with the fewest negative health impacts? Those are reasonable questions. I don’t think solar or wind are ready to carry the base load. Coal can and should be cleaned up. Natural gas can help. Too many in the environmental community just want to kill anything that is not wind/solar and that is ridiculous.

      1. Thanks for the civil reply. We may need to look at base load from a socio-economic point of view. Do we really need the centralized system for the small user of electricity? Natural gas for the industrial user is a good bridge to somewhere.

          1. I read through the link from the government. Not too impressive. No one has designed one, let alone built one. Looks like they are trying to get a Solyndra sized appropriation going. Doubt they’ll get any bites. The website forgot to talk about the zillion dollar problem of containing the waste. I’d say it looks good on paper, but actually it doesn’t.

          2. You ought to know by know that Gallagher is biased on nuclear. To get a proper scope on them you should go here:

            http://www.world-nuclear.org/info/nuclear-fuel-cycle/power-reactors/small-nuclear-power-reactors/

            This reactor looks very promising:

            http://terrestrialenergy.com/imsr-technology/

            Integral Molten Salt Reactor

            It solves the waste problem as do other designs like PRISM.

            The depressing thing is the US seems to be falling back on PWRs which are essentially employed in subs and ships. I think they like the Fast Nuclear Reactors for bomb making. Other then that the US is falling behind on more advanced concepts. Our government wastes too much money on renewables which are basically parasitic, that is, they can’t sustain themselves..

  7. Pat: I see no reason to continue a debate or discussion with someone who sees problems where there are none. Coal is not the problem. Poverty, lackluster economies, government regulation and Socialism harm and kill more people than any of the faux health problems you seem to be irrational about. (over population is a real problem no one is addressing) Have a nice life.

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