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New Mexico lawmakers want to study costs, benefits of public power

Public Service Co. of New Mexico uses this solar farm west of Rio Rancho, N.M., to help power Facebook’s data center in central New Mexico. More than a dozen New Mexico lawmakers are petitioning state regulators to study the potential costs and benefits of publicly-owned electrical power for the state. The petition was made public Tuesday. (Susan Montoya Bryan/Associated Press file)

ALBUQUERQUE – More than a dozen New Mexico lawmakers are petitioning state utility regulators to study the potential costs and benefits of publicly owned electrical power for the state.

The lawmakers in a petition released Tuesday said they believe public ownership of the electrical utilities that serve New Mexico likely would benefit customers, businesses and state, local and tribal governments as mandates aimed at curbing pollution and growing renewable energy development kick in over the next two decades.

The lawmakers, most of whom are liberal Democrats, want to make their case before the Public Regulation Commission during a meeting next month.

“We no longer need to trade off the environment and the economy against each other as we have abundant natural resources in New Mexico,” state Sen. Liz Stefanics said in a statement. “We must look at alternative ways to structure the provision of energy so that we can meet our goals as quickly and equitably as possible.”

The request comes after the Public Regulation Commission issued two major rejections involving the state’s largest electric provider in recent weeks. The five elected commissioners voted unanimously against Public Service Co. of New Mexico’s proposed exit from the coal-fired Four Corners Power Plant and a proposed multibillion-dollar acquisition of the investor-owned utility by global energy giant Iberdrola.

The commissioners had voiced concerns about whether the proposals were in the public interest, among other things.

Stefanics and her colleagues argue that a formal study would help determine whether implementation of public power would be in the public interest, stabilize electricity rates, generate revenues and result in the deployment of more renewable energy.

Supporters of the rejected PNM merger had argued that bringing in Iberdrola and U.S. subsidiary Avangrid would have made available more capital and boosted purchasing power that could help meet emissions benchmarks and renewable energy mandates.

But the petitioning lawmakers say that under the current model, plant ownership and energy investments by investor-owned utilities require a return on equity that often creates an incentive not to invest in energy sources with fixed capital costs and no fuel costs.

The petition points to two possible models that could be studied – a state owned and operated electric power authority with municipal and tribal local control over generation or a community choice system where investor-owned utilities maintain transmission and distribution with the option for municipal and tribal control over generation.

The lawmakers say it would be up to the New Mexico Legislature to make the ultimate decision about whether a public power retail electric service at just and reasonable rates is feasible.

“That process must begin with an understanding of what is possible,” the petition says.

According to the petition, more than 2,000 communities in 49 states and several U.S. territories have a public power utility and as a whole, public power utilities have lower rates than other types of electric utilities.

The petition suggests that the study, if allowed by the commission, should also look at potential downsides such as whether public power adoption could expand the urban-rural divide or decrease market competition.