New Mexico Bill Would Require Public Utilities to ‘Shop’ for Energy Prices

New Mexico State Senator Joseph Cervantes (D-District 52) introduced a bill (SB-360) on February 8 that would require publicly owned electric utilities to choose the least-costly alternative when proposing purchases of new energy sources.

“This begins with the recognition that the price for renewable energy is falling dramatically,” Cervantes told The Sante Fe New Mexican on February 10. “So the goal behind this legislation would be to try to encourage a competitive market, which is emerging with renewable energy.”

Currently, Cervantes said, investor-owned utilities “are relying on their own generation of electricity.” His bill would encourage them “to open up and shop for alternatives that may have lower prices from renewable energy and, ideally, pass those savings on to consumers.”

Mariel Nanasi, executive director of New Energy Economy, a Santa Fe-based clean-energy advocacy group, has for years been advocating for such a change. In recent utility cases before the Public Regulation Commission involving the state’s largest investor-owned electric utility, Public Service Company of New Mexico, Nanasi and other intervenors questioned whether PNM ever had seriously considered replacing coal and nuclear power with significant amounts of solar or wind energy, The Sante Fe New Mexican said.

These cases included last year’s rate increase request and PNM’s plan to shut down two coal-fired units at the San Juan Generating Station near Farmington and replace the energy with other sources.

“I’m more convinced than ever that an open, competitive and transparent process will yield a cleaner, fairer, cheaper energy mix,” Nanasi told the local news outlet last week. “And that means the creation of jobs, improved health and protection of the environment. This is the standard in more than half the states, with positive results to show for it.

“With a fair and transparent energy procurement process in place,” she said, “New Mexicans will be assured the best energy at the lowest cost.”

Indeed, key to the new bill would be the following provision:

Except as otherwise expressly provided in this section, any application by a utility for commission approval of the utility’s proposed procurement of a new resource, including an application for commission issuance of a certificate of public convenience and necessity or for commission approval of a power purchase agreement for such a resource or for inclusion of such a resource in the utility’s rate base, shall be accompanied by testimony providing and describing the results of a request for competitive proposals for the resource that affords all resources an opportunity to bid and complies with all applicable commission regulations.

Cervantes’ bill calls for a “qualified independent evaluator” to be agreed upon by a utility, staff from the Public Regulation Commission’s Utility Division and the state Attorney General’s Office. The evaluator would “verify the results and investigate resource options that the utility did not consider.”

Nanasi said if Cervantes’ bill becomes law, there would be fewer legal battles “because the [Public Regulation] commission, our utilities, stakeholders and the public will be equipped with the information and choices we need to pursue an energy path that benefits our communities.”

Asked for comment on the bill, PNM spokesperson Pahl Shipley told the newspaper that the utility’s executives are “in the process of reviewing the proposed legislation and do not have a comment at this time.”

The bill has been assigned to the Senate Conservation and Judiciary committees. No hearings have been scheduled.

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