We at the Rio Grande Foundation genuinely HATE saying “I told you so” when the schemes of New Mexico politicians fail. The Rail Runner, Spaceport, and ART bus system are just a few of the schemes that have clearly not worked out for our State.

But all of those pale in comparison to the disaster that is potentially unfolding in our electrical grid. Unfortunately, the makings of the impending disaster were sowed in 2019 with passage of the Energy Transition Act (MLG’s top priority in that session). But, we all know that the PRC recently decided to extend the life of the coal-fired San Juan Coal-fired station to keep the lights on THIS summer.

Recently, PNM reported that  HALF of the replacement solar power/battery storage for the summer of 2023 won’t be available in time.

In addition to slowing delivery of “renewable” projects, prices have risen dramatically. According to UtilityDive.com, “A shortage of new renewable projects available to interested buyers has caused prices for power purchase agreements to rise 9.7% since the beginning of 2022, and 28.5% since the beginning of 2021, according to an analysis by PPA marketplace LevelTen Energy.”

Tariffs on Chinese solar panels are also driving prices up and there is seemingly little willingness among domestic producers to ramp up production.

Daniel Suhr is a Managing Attorney with the Liberty Justice Center, a conservative non-profit legal firm. Paul and Daniel discuss vaccine mandates, the judiciary’s performance during COVID, and numerous other issues relating to COVID and the government’s use of emergencies. They also discuss the Roe v. Wade leak (and apparent decision) and their implications for the Court.

Daniel spoke at a Rio Grande Foundation luncheon on May 5, 2022. Podcasts of the interview with Paul Gessing and a radio appearance with Bob Clark are below.

The Biden Administration’s Department of the Interior (led by former New Mexico Congresswoman Deb Haaland) has struck another blow on behalf of higher gas prices with their decision to cancel leases in Alaska and the Gulf of Mexico.

While some news stories claim there was a “lack of interest” by industry in the Alaska lease issue, it is hard to understand what that could be driven by given record-setting gasoline prices across the nation.

The decision likely means the Biden administration will not hold a lease sale for offshore drilling this year. Environmental groups (naturally) praised the decision while Frank Macchiarola, senior vice president of the American Petroleum Institute noted that “the administration talks about the need for more supply and acts to restrict it.”

While not DIRECTLY impacting New Mexico, Biden/Haaland have already slashed New Mexico lease sales.

The forest fires now raging in Northern New Mexico are tragic. As with any tragedy the causes are myriad and there is ample blame to go around. However, we DO know that the largest fire was a result of a “controlled” burn by the US Forest Service.

And, we know that federal land management practices have left a lot to be desired for decades in New Mexico with needed management having been abandoned in favor of simply letting the forest grow.

RGF’s Paul Gessing wrote the following in an opinion piece back in 2014:

Our efforts to restore state control over certain federally-managed lands are by no means based entirely on economics. Climate change is often cited in the media as the cause of recent forest fires that have raged in New Mexico and throughout the West. The reality is that poor federal management (or the lack thereof) is a major contributor to rampant fires. Going back to the Native Americans, lands were intensely managed. That ended when environmental zealots took control of Washington’s land management bureaucracies, eventually putting a stop to timber production and engaging in aggressive fire suppression that has caused a buildup of flammable material on forest floors.

We have further written about the issue here and here. Here is an even more detailed analysis from the Property and Environment Research Center (PERC).

Climate change, drought, and numerous other issues all play a role in the fires we are seeing, but improved land management remains an important tool in preventing the tragic situation we are seeing unfold in our State.

New Mexico’s mandatory paid sick leave law was passed in 2021. We know many of the policy details such as:

• The Act applies to all businesses even those with a single employee;
• The Act requires businesses to give full time employees up to 64 hours of sick leave per year;
• Leave is accrued at a rate of one hour for every 30 hours worked;
• Leave must be paid at the employee’s regular hourly rate. Employees may carry over any accrued, unused leave; however, “an employer is not required to permit an employee to use more than [64] hours in a [12]-month period.”

But, with less than two months to go, the final rules have not been issued. you can go to the Department of Workforce Solutions website and find a link to “draft Healthy Workforce Act rules” but not final rules.

Those rules will define a number of important aspects of the law including how businesses must communicate with their workers. Small businesses in particular will struggle with this which the Legislature and Gov. seem unconcerned about.

Update: NM Department of Workforce Solutions will conduct a continuation of the public hearing to obtain input and public comment on proposed regulations for implementing and enforcing the Healthy Workplaces Act on May 24, 2022. More information available here.

New Mexico’s unelected Environmental Improvement Board has adopted a new “clean car rule” at the urging of Gov. Lujan Grisham. California’s (and New Mexico’s)  standards will require roughly 7% of new cars sold to be zero emission in 2025. In the 3rd quarter of 2021 zero emission vehicles amounted to just 2.29% of new vehicle sales in New Mexico. So, those sales will need to just more than triple from Q3 of 2021 to 2025. The rule could get much more restrictive soon as California Gov. Gavin Newsom has issued an  executive order ordering the end the sale of gas-powered cars in California by 2035. California’s own unelected board is expected to hold a vote on final adoption of that in August.

If California enacts this rule, 35% of new cars, SUVs and small pickups sold in California (and thus New Mexico) must be zero-emission starting with 2026 models, then increasing yearly, reaching 51% of all new car sales in 2028, 68% in 2030 and 100% in 2035. Of those, 20% can be plug-in hybrids.

Another delay for Virgin Galactic as their stock market continues to drop.

New Mexico’s loan ban was based on false information. A new report from Illinois which adopted a similar law show the number of lenders and loans available to low-income customers has dropped dramatically. 

Questions remain for New Mexico’s future electricity reliability. PNM had proposed to build a 280-megawatt “peaking” natural gas plant – which can rapidly ramp up and down as needed – alongside new renewable generation but that has not been built due to PRC opposition. The Avangrid/PNM merger remains alive with an appeal to the New Mexico Supreme Court, but the real strategy seems to be to wait for MLG to put pro-merger people on PRC before she leaves office.

ABQ City councilor proposes “living lots” for local homeless, Paul and Wally have some thoughts.

New Mexico’s new sick leave mandate takes effect on July 1, but we STILL don’t have a final rule. 

According to a new Tax Foundation report New Mexico’s sales tax is very broad, 2^nd most broad among US states (to Hawaii).

Early voting at county clerk offices begins (today) May 10. Paul has recently interviewed the four main GOP candidates for Gov. and both candidates for CD 1 here and here (all of which are contested).

With the start of early voting today, here is our initial list of candidates who have committed to “restrict emergencies” to a fixed period of time, clearly define “emergency” in statute, and requiring majorities in both houses of the state legislature to approve extensions of any ’emergency’ declaration.”

Text of the pledge is below the list. Candidates who have NOT signed the pledge but wish to can email us at: info@riograndefoundation.org

Rebecca L Dow, Governor
Travis Steven Sanchez, Lieutenant Governor
Ant Thornton, Lieutenant Governor

Mark Duncan, State Representative District 2
Jerri D Rowe, State Representative District 6
Adrian Anthony Trujillo, Sr, State Representative District 11
Kimberly Ann Kaehr-MacMillan, State Representative District 15
Ellis C Mcmath, State Representative District 17
Scott Troy Cannon, State Representative District 18
Kathleen M Jackson, State Representative District 19
Robert A Salazar, State Representative District 20
Stefani Lord, State Representative District 22
Alan T Martinez, State Representative District 23
Khalid Emshadi, State Representative District 24
Robert S Godshall, State Representative District 27
Gregory G Cunningham, State Representative District 29
William R Rehm, State Representative District 31
Jenifer Marie Jones, State Representative District 32
Richelle A Peugh-Swafford, State Representative District 35
Melba T Aguilar, State Representative District 38
Jay Groseclose, State Representative District 46
Rachel A Black, State Representative District 51
John Block, State Representative District 51
Ricky L Little, State Representative District 53
Greg Nibert, State Representative District 59
Larry R Scott, State Representative District 62
Andrew G Kennedy, State Representative District 66
Jimmy G Mason, State Representative District 66

The candidates listed above have signed the following pledge: “I pledge to protect democracy. Thus, I commit to balancing power in future emergency declarations. This includes: restricting “emergencies” to a fixed period of time, clearly defining “emergency” in statute, and requiring majorities in both houses of the state legislature to approve extensions of any “emergency” declaration.”

If you are a candidate for the Legislature or Gov. who would like to sign this pledge please email us: info@riograndefoundation.org

Last week New Mexico’s unelected Environmental Improvement Board chose to join the list of states that have adopted California’s so-called “Clean Car Rules” Interestingly, because California sets the rules, these rules could be changed whenver California regulators decide to, and they may be poised to do just that.

California’s (and New Mexico’s)  standards will require roughly 7% of new cars sold to be zero emission in 2025. In the 3rd quarter of 2021 zero emission vehicles amounted to just 2.29% of new vehicle sales in New Mexico. So, those sales will need to just more than triple from Q3 of 2021 to 2025.

That means that dealers will either cross-subsidize ZEV’s by raising prices on other vehicles or they will look to the State to subsidize sales of the “chosen” vehicles.

Aside from this proposal not coming through the democratically-elected Legislature, California calls the shots when it comes to changes to the “standard” which will also impact New Mexico. CA Gov. Gavin Newsom has issued an  executive order ordering the end the sale of gas-powered cars in California by 2035. California’s own unelected board is expected to hold a vote on final adoption of that in August.

If California enacts this rule, 35% of new cars, SUVs and small pickups sold in California (and thus New Mexico) must be zero-emission starting with 2026 models, then increasing yearly, reaching 51% of all new car sales in 2028, 68% in 2030 and 100% in 2035. Of those, 20% can be plug-in hybrids.

Not including New Mexico, here is a list of states that have chosen to follow California’s rule.

Jay Block, Sandoval County Commissioner

Rep. Rebecca Dow

Mark Ronchetti

Greg Zanetti

Paul visits with Garrett Ballengee, Executive Director of the Cardinal Institute for West Virginia Policy. They discuss West Virginia’s culture and politics, the current economic and social forces impacting the state and an outlook for the future.

After having stated that manned space tourism launches from Spaceport America would begin in Fall of 2022, Virgin Galactic has (yet again) announced the delay of its launch plans from the facility.

According to news reports, the plan is to now launch in the first quarter of 2023. The current excuse is “supply-chain bottlenecks and difficulty hiring engineers and skilled labor.”

While that is undoubtedly a challenge, the taxpayer-financed Spaceport facility will have been open for 11 years by this coming October without a single paid space tourism flight launching from the facility.

Notably, Virgin Galactic which is now a publicly-traded company on the stock market, is plummeting. According to the Journal, “On Friday morning, Virgin Galactic’s stock price dove 13%, from $7.46 per share on Thursday afternoon to $6.51. That’s down from a peak of $62.80 a share in February 2021.”

The laws passed in the 2022 legislative session will (mostly) take effect on July 1. Unfortunately, a new report indicates that legislation passed this session that will have profound impacts on New Mexicans starting in July was built on faulty or even outright false information.

A public records request from Illinois where a similar law is in effect highlights the situation. There are 45% fewer licenses held by Illinois’ installment lenders in the State after its 36% rate cap bill was signed into law on March 23, 2021. This does not include the more than 350 payday lender licenses that also expired.

This dramatic decline stands in stark contrast to assertions made by groups and activists suggesting that installment lenders were on the rise in Illinois. Initial analysis of credit bureau data by academics shows that the number of loans in Illinois to subprime borrowers decreased by 29,000 (or 36%) in the 3 months following the implementation of the rate cap law. Furthermore, the number of loans to deep subprime borrowers declined by 4,700 (or 57%).

This is exactly what asserted repeatedly during testimony and in the media during the 2022 legislative session by the Rio Grande Foundation. In Illinois when the rate cap took effect, credit options became more limited for those that need them the most. The same can be expected in New Mexico starting July 1 when HB 132 takes effect.

Gov. Lujan Grisham and the Public Regulation Commission seem to believe that by pushing the closure of San Juan Generating Station until after the end of this summer that they have “taken care of” New Mexico’s electricity reliability issues.

The reality could not be further from the truth. As the Albuquerque Journal and Rio Grande Foundation have BOTH pointed out, getting through this summer does not mean the blackout situation is “solved.” We likely need a natural gas plant based in the Four Corners or elsewhere, but that was rejected by the PRC. As noted, “PNM officials and others criticized the PRC for rejecting PNM’s proposal to build a 280-megawatt “peaking” natural gas plant – which can rapidly ramp up and down as needed – alongside new renewable generation when it ruled on San Juan replacement power in 2020.”

We have heard of no action undertaken by the Lujan Grisham Administration to create viable means of keeping the lights on in the summer of 2023 (when additional base load capacity in the form of Palo Verde will be lost).

UPDATE: In another case of the Rio Grande Foundation being ahead of the curve, this story ran on Thursday, May 12, 2022 detailing the challenges PNM is facing in obtaining solar panels to prepare for Summer of 2023. According to PNM, “Those delays mean that nearly half of the 950 megawatts of solar generation and battery storage that was scheduled to be fully online by early next year now won’t be available until after summer 2023.”

The Gov. is going to ignore the problem and hope voters don’t hold this against her in November, but there is no doubt that New Mexico’s electricity issues are a problem.

On this week’s conversation Paul and Wally discuss the Legislative Finance Committee’s new report on Albuquerque Public Schools. The report has important information for state and school districts across New Mexico.

Student loan forgiveness as Joe Biden has discussed doing would be highly regressive (AND bad policy).

Albuquerque is considering sanctioned homeless camps. Wally and Paul explain why this and other supposed “solutions” are problematic.

Natural gas prices are increasing. Unfortunately natural gas production in the US is declining. 

New poll places MLG among least popular Governors in the US, but still slightly above “water.”

Paul recently interviewed Congresswoman Yvette Herrell and also sat down with the top GOP candidates for Gov. this week on Tipping Point NM.

The Legislative Finance Committee’s new report on Albuquerque Public Schools has numerous points of value. One of the requests made in the recent report is that the District:

“Report to the LFC within a year on how it plans to adjust its facilities footprint to declining enrollment;”

May we recommend the District copy the federal “Base Realignment and Closure” model. According to Wikipedia, the BRAC process has been used to close more than 350 installations five BRAC rounds: 1988, 1991, 1993, 1995, and 2005. These five BRAC rounds constitute a combined savings of $12 billion annually. We would argue that BRAC is the single most important money-saving tool the federal government has come up with to date (that’s a low bar for a government that is $28 trillion in debt to be sure…)

The basic concept is that Congress appoints a commission with no political stake in the game and gives them a set of guidelines such as how much money to save and then the commission provides a list of facilities to close based on the mission of the military and overall need. That list goes to an up or down vote of Congress.

APS needs to address its “footprint” according to the report which notes that “Since FY12, APS square footage grew by 21 percent while
enrollment fell by 17 percent.” Also, the report cites a backlog of needed repairs at schools, a problem that could be alleviated by eliminating older, poorly maintained facilities. Those could be turned into in-demand charter schools or sold off for development (and to be put back on the tax rolls).

Rio Grande Foundation president Paul Gessing regularly appears on the Bob Clark Show on KKOB radio (every other Friday). His most recent appearance was Friday, April 29.

The episode elicited “outrage” from City Councilor Pat Davis (below):

I love when @KKOBradio’s Bob Clark gives @RioGrandeFndn free Friday air to spread misinfo to fire up listeners against City Council plans we aren’t planning. Today: turning parks into homeless camps. Paul can read. He shud read the section that says not in parks. #Facts #nmpol

— Pat Davis (@PatDavisNM) April 29, 2022

On this special podcast edition Paul sits down with New Mexico Congresswoman Yvette Herrell. She and Paul discuss redistricting and the changes made to her 2nd Congressional district. Rep. Herrell also discusses current economic, energy, and border security issues facing New Mexico that she is working on in Congress.

You don’t want to miss this special conversation!

According to news reports President Biden is seriously contemplating “forgiving” significant amounts of student loan debt. Currently that sees to be $10,000 per student, but we have no idea if and when this will be done. Already, the payment pause (put in place by President Trump early on in COVID) and retained by Biden despite the pandemic being largely considered over, has canceled approximately $5,500 per borrower. 

This is highly regressive public policy that will disproportionately assist those who are or will be the very highest earners.

Not surprisingly, the very biggest beneficiaries of student loan forgiveness are doctors and lawyers who often go into heavy debt, but have very high incomes. Perhaps more surprising to those who don’t follow politics closely, so called “progressives” are leading the charge for greater debt forgiveness. But, the modern left supports bigger government reflexively without serious consideration of who benefits from their preferred policies (see New Mexico film subsidies).

The recent Legislative Finance Committee report on Albuquerque Public Schools has too much useful information for one post. We commented on some of the broader budgetary findings here.  Here is a chart from the report which illustrates the decline in test results thanks to Gov. Lujan Grisham’s policy of keeping students out of classrooms from March 2020 through March 2021. The test is given at the beginning, middle, and end of the school year in order to track student improvement.

While reading scores (on the left) were somewhat impacted by the lost year math scores (on the right) saw major declines

The following is also worth noting. While many parents and certainly the unions tend to push for smaller class sizes as a goal. The LFC report DOES focus attention on ways to improve student outcomes via coaching and increased use of data for instruction in the classroom. See below:

In the first of what will be a handful of “special” episodes of Tipping Point NM, Paul sits down with congressional candidate Louie Sanchez. Louie is a Republican businessman and entrepreneur running in New Mexico’s revised 1st District with a primary battle to be decided by voters on June 7. Based on recently redrawn maps, this district could be highly competitive for Republicans looking to unseat Democrat Rep. Melanie Stansbury.

While coaxing action from one of the largest bureaucracies in the State of New Mexico will undoubtedly prove to be a challenge for the Legislative Finance Committee (LFC) just as it has for us, it is good to see the Legislature’s own analysts coming to some of the same conclusions as we have regarding Albuquerque Public Schools. Their full report is here.

A KRQE Channel 13 report has the highlights with the headline, “State report suggests Albuquerque Public Schools cut costs, combine classes.” But there is A LOT in this report which also notes that “APS has increased spending, despite a decrease in enrolled students. From the fiscal year 2012 to the fiscal year 2021, enrollment declined by 12% while actual spending increased by 23%.” This reflects what we have been saying about the District’s ballooning budget.

Curiously, while THIS report notes that APS “has more teachers than it needs. According to the LFC’s calculations, APS hired 492 too many kindergartens through 12th-grade teachers.” As recently as August of 2021 APS was saying there was a teacher shortage.

There is a lot to unpack in this report, so we will break things up into multiple components.

RGF is now hiring. Find out more.

The media failed to include some important details on a recent CNM story. RGF Paul and Wally correct the record on CNM “cutting” programs.

Speaking of the media getting things wrong, a Politico story gets numerous facts wrong in its attempt to praise New Mexico Democrats on energy.

Friday was Earth Day. Paul and Wally celebrate the very real progress we’ve made on the environment:

Here’s how NM’s K-12 spending compares to our neighbors. Unfortunately results and spending are two very different things.

Her last health order was confusing. As it turns out MLG did extended the health emergency yet again, but until May 16.

A recent court victory on UNM Foundation transparency is a victory for good, open government.

A new study says NM is the most dependent US state on the federal government.

RGF recently had an opinion piece that ran regarding New Mexico’s economy and the unique opportunity the State has to put its economy on track. Even with an income tax Colorado’s economy performs very well thanks in large part to its Taxpayers Bill of Rights. Paul and Wally discuss how Colorado’s recently-announced rebates rival New Mexico’s, but are far superior overall because of TABOR’s systemic approach.

The Albuquerque Journal is half right in its recent editorial that IF they lead to the removal of unsanctioned camps, sanctioned encampments are worth a pilot project. Of course, the problem is that there is absolutely no reason to believe that sanctioned encampments will lead to an improvement in the overall “homeless” situation in the City.

Shockingly a City Council committee has advanced an amendment to the zoning code permitting up to 45 encampments throughout the City.

Based on a combination of logic and past experience, large numbers of encampments will lead to more so-called “homeless” flocking to Albuquerque and an even worse situation than before. Here and Here are a few authors who have written in detail about the issue and its impact on businesses and various parts of the City.

Incentives matter in human behavior (that’s the underlying principle of economics). Solving homelessness is likely beyond the capabilities of government, but unoccupied “tiny homes” continue to sit unused.

As the following video explains, helping those who want help, families, and others who are temporarily unable to find housing is important, but that is not the majority of the problem. Enforcement of property rights, not further erosion of our public spaces is necessary.

Don’t look now, but an increasing number of news stories are predicting rapidly-rising natural gas prices. Natural gas generates approximately 20% of New Mexico’s electricity and remains one of the best options for inexpensive, reliable, rather green (and New Mexico-produced) electricity.

That doesn’t include home heating and cooking.

According to the article linked above and here from Yahoo News natural gas prices are rising due in part to “green” policies.

In the past, when natural gas became too expensive, power-plant owners would just dial down some of their gas-fired generators and turn up those burning coal, effectively putting a ceiling on demand and preventing prices from skyrocketing. But utilities’ move away from coal is shrinking inventories and drastically reducing their ability to pivot from gas, leaving the market more vulnerable to wild moves. “There is a path to some crazy prices,” said Paul Phillips, senior strategist at Uplift Energy Strategy in Denver.

See the chart below. As is the case when energy prices rise, the State’s budget will benefit, but energy consumers in New Mexico and beyond will suffer.