After more than a year of death-defying escapes, an environmental rule was repealed on Monday, Feb. 6, with a unanimous vote by a Gov. Susana Martinez-appointed board.

The rule up for debate was on capping and trading carbon dioxide emissions—putting a cap on how much can be produced and allowing companies that come in under the limit to trade what remains of their allowance.

The regulation was approved by the Environmental Improvement Board in 2010 during the final months of Democrat Gov. Bill Richardson’s administration. But it was never implemented. Martinez fired all seven of those 2010 members and replaced them. The overhauled board axed cap-and-trade.

The rule was one of many pieces of environmental legislation Republican Gov. Martinez tried to halt when she took office [“Guv Sued Over Eco Rules,” Jan. 20-26, 2011]. The rule survived that round only to be challenged by utility companies in the state [“Utilities Protest Carbon Caps,” April 28-May 4, 2011].

This cap-and-trade system is the core component of the Western Climate Initiative. The more jurisdictions that sign up for the system, the bigger the trading marketplace is and the better it works.

Environmental Improvement Board member Elizabeth Ryan says the decision was based on the belief that the cost would outweigh the benefit. Because many states that were part of the Western Climate Initiative pulled out, she says, there’s not an adequate marketplace for trading.

Arizona, Utah, Montana, Oregon and Washington have also withdrawn, leaving California and four Canadian provinces (British Columbia, Manitoba, Ontario and Quebec). “The whole point for New Mexico is that we were likely going to need to purchase allowances from somewhere,” she says. “Who were we going to purchase them from?”

Ryan argues that since no neighboring states have emission caps, local utilities could simply hit New Mexico’s limit and then draw more energy from the plants they have across borders.

Bruce Frederick is a staff attorney with the New Mexico Environmental Law Center, which fought for the rule. He says that isn’t a sound argument. When it comes to trading, “California was the only participant that mattered. California is the ninth-largest economy in the world,” he says. “The bottom line is that as long as California’s participating, the Western Climate Initiative works.”

PNM spokesperson Don Brown says the plan would have cost customers up to $841 million over the first 20 years. No technology exists yet to reduce carbon emissions in power plants, he says—at least not on a large scale. The only way to meet the cap-and-trade requirements would have been to run coal-fired plants less often and natural gas plants more, which are more expensive.

PNM squares off against the EPA’s new haze rules

Do New Mexicans deserve low-cost electricity or clear skies? That question lies at the heart of the latest dust-up between federal regulators and the Public Service Company of New Mexico.

The main point of contention is the San Juan Generating Station, an old coal-fired PNM power plant that chugs away near Farmington, providing the bulk of the state’s electricity. But the SJGS is also New Mexico’s second-largest source of greenhouse gas emissions, according to recently released US Environmental Protection Agency data, as well as a major producer of “haze”—visible air pollution that restricts views in national parks across the West.

For years, SJGS has been in regulators’ crosshairs. Under former Gov. Bill Richardson, the New Mexico Environment Department pressured PNM to install up-to-date pollution controls at the plant; in a 2010 interview, outgoing NMED Secretary Ron Curry warned that, even if the state couldn’t force SJGS into compliance, EPA eventually would [news, Aug. 25, 2010: “Curry Favor?”].

PNM resisted, claiming the equipment was too expensive. But after Gov. Susana Martinez took office, NMED relaxed the state’s air quality standards, effectively letting PNM off the hook. The new standards “aligned 100 percent with PNM’s numbers and wishes,” Mariel Nanasi, the executive director of environmental group New Energy Economy, tells SFR. “It’s clear to us that NMED did no independent analysis of the costs whatsoever and just used PNM’s numbers.”

Despite the state’s relaxed standards, Curry’s prediction was spot-on: In August, the EPA tightened its own rules—and rejected New Mexico’s as insufficient. (The federal pollution standard would remove about 80 percent of the offending pollution, while current New Mexico standards would result in a 20 percent reduction.) Three months later, the EPA came down hard on SJGS, giving PNM a deadline for installing the best available pollution control technology.

PNM maintains that it cannot afford the equipment, which it estimates would cost more than $750 million. Given the utility’s current finances—its low credit rating all but precludes borrowing—PNM would need to ask the embattled New Mexico Public Regulation Commission for politically unpopular rate hikes in order to pay for new equipment. According to a Dec. 2 press release, complying with NMED’s regulations will cost PNM a comparatively minimal $77 million.

So in December, with the state’s backing, PNM challenged the EPA’s new haze rules in federal appeals court.
Critics, however, say PNM’s claims are unjustified. They argue that PNM has not only inflated the cost of the equipment—EPA and outside experts estimate it’s closer to $345 million—but has also brought this situation upon itself.

Jeremy Nichols, who directs WildEarth Guardians’ climate change and energy programs, says PNM and the Martinez administration are raising “bizarre issues” in court to try to avoid installing the best available pollution control technology.

“New Mexico’s regulations only require second-rate pollution control technology,” Nichols says. “EPA has the authority to require higher standards to protect downwind neighbors. EPA has a duty to step in when states don’t meet federal pollution standards.”

But NMED spokesman Jim Winchester questions the standards themselves.

“The dispute with EPA is not about what reductions are necessary to protect public health,” Winchester writes in an email to SFR. “[I]t is about whether the increased costs of additional emission reductions are justified given the negligible benefits to visibility that would result.”

To some groups, though, the SJGS problem is even more fundamental. Even as utilities across the country shutter and retrofit their coal-fired power plants, PNM is sticking with coal. In July, after a lengthy public scoping process, PNM released its long-term energy plan (called an Integrated Resource Plan) to the PRC; environmental groups protested, claiming the plan relies excessively on fossil fuels while failing to meaningfully invest in renewable energy sources.

“This is a totally business-as-usual plan,” David Van Winkle, who heads the energy and climate change team of the Sierra Club’s Rio Grande Chapter, says. “This is the first IRP ever to be appealed in New Mexico because it is so bad.”

According to Chuck Noble, an attorney with the Coalition for Clean Affordable Energy, the plan isn’t just bad for New Mexicans; it also puts PNM’s own future at stake.

“PNM is increasing the risks to their company by investing still more money in their aging coal plants,” Noble writes SFR in an email. “Their long-range plan seems to be to double down on coal—which, for environmental reasons, is increasingly risky. Their books show that they plan to continue to invest in and operate their 30-year-old coal plants for another 40 years, which we believe makes no sense.”

PNM isn’t exclusively focused on coal; in order to satisfy the state’s renewable energy requirements, PNM is building five new solar power plants and buys some solar power from customers’ rooftop solar panels. But the SJGS produces 36 times more electricity than these sources, and spokesman Don Brown says PNM has no plans to build new natural gas or solar plants in the foreseeable future.

“The San Juan plant is one of our lowest-cost resources and provides the majority of electricity for our customers,” Brown says. “The plant is well positioned to continue operating for the long run.”

 To Continue Reading: Hazy Future

The possibility of the city and county of Santa Fe owning an independent municipal power utility is under study and gathering support.

Electricity for Santa Fe and much of the county is now provided by investor-owned Public Service Co. of New Mexico. The majority of the power comes from coal-fired power plants in northwestern New Mexico.

More than 1,500 people have signed a petition asking the Santa Fe City Council to study the idea of a renewable-energy municipal power utility owned by the public.

Faren Dancer, a local builder and founder of an environmental organization called Unicopia, launched the petition Jan. 12. He’s hoping for well over 2,000 signatures before he takes the petition to the governing bodies.

“I figured the city and county won’t go for this unless there’s a huge groundswell of public support,” Dancer said.

Dancer has been hosting a series of mini sustainability summits at the house he built in Santa Fe, a net-zero energy building. On Saturday, Dancer held another meeting to hear from Santa Fe city and county energy experts, as well as elected officials, on his “muni-utility” idea.

“The track we’re taking is not about pushing against the powers that be as to be a purely solution-oriented group,” he said.

Santa Fe County Commissioner Kathy Holian attended Saturday’s conference. She said later that the joint city and county Regional Planning Authority allocated $25,000 for the county to study options for an independent municipal power utility.

She said the funds were awarded to the nonprofit New Energy Economy, which has leveraged other money and issued a request for proposals. Holian said she hopes a feasibility study will be completed by July.

“We’re looking at various scenarios,” Holian said. “I think it is important to go forward.”

She said the study will need to look at what the existing PNM-controlled grid in Santa Fe is worth and what customer rates might look like if the city and county launched a joint power utility. “Our goal would be to at least stabilize rates [with a municipal grid],” Holian said.

She said the study also needs to look at what a locally owned public utility would mean for the Santa Fe economy. Holian thinks it could mean more local jobs and keeping the revenues generated by power sales closer to home.

A publicly owned utility isn’t driven by a profit motive like an investor-owned or privately-held utility, she said. It also would fulfill sustainability plans approved by the City Council and County Commission, she said.

The city of Santa Fe already owns its water utility, which it purchased from PNM, and jointly operates a river diversion project with the county.

Other cities have already tried municipal-owned utilities.

Since 1968, Los Alamos County’s Department of Public Utilities has managed electricity, gas, water and waste for Los Alamos and White Rock residents. Public Service Co. of New Mexico owns the power lines and Los Alamos leases space. But the county is in better control of its own rates and can develop alternate energy sources. In the 1980s, Los Alamos bought interest in the San Juan Electric Generation Plant for building hydroelectric power plants at the El Vado and Abiquiú reservoirs.

In the last few years, the publicly owned utility has worked with Los Alamos National Laboratory to develop hydroelectric and utility-scale solar-power projects.

To Continue Reading: Utility Idea Puts Power in Hands of Community

Coal, the rock that built America, also is the No. 1 source of the greenhouse-gas emissions blamed by most climate scientists for worldwide climate change.

Dirty Business, a film by the Center for Investigative Journalism, explores the history of coal and the role the rock has played in producing electricity and leveling part of the Appalachian Mountains. The film’s primary goal is to lay bare the reality of “clean coal,” and whether there is such a thing. Directed by Peter Bull and co-produced by Justin Weinstein, the film is narrated by Rolling Stones contributing editor Jeff Goodell, author of Big Coal.

“Clean coal is like healthy cigarettes,” Goodell says in the film.

Dirty Business is one of four environmental films that will be shown as part of the Get Reel festival sponsored by the Santa Fe-based nonprofit New Energy Economy. Each film will be followed by a discussion about alternative energy and ways to move the United States on to renewable energy.

The other films include The Last Mountain, a documentary about the struggle by citizens in West Virginia’s Coal River Valley to save a mountaintop from destruction by coal companies.

If A Tree Falls follows the rise and fall of an Earth Liberation Front cell by focusing on one of its most controversial members as he faces life in prison for his environmental activities.

Finally, Emmy-winning Split Estate explores the outcome when oil companies own the minerals underneath homes and private surface property.

The film festival is occurring at the same time the state Legislature is meeting for a 30-day regular session. The festival will show one film a week, each Thursday through Feb. 9.

New Energy Economy is promoting renewable-energy and energy-efficiency projects in Santa Fe. The organization also advocated for a cap on greenhouse-gas emissions before the state Environmental Improvement Board.

To Continue Reading: Get Reel Film Festival Explores the Dirtier Side of Energy 

Plans are moving forward for Santa Fe city government to partner with a local nonprofit to build a solar energy system at a fire station on Cerrillos Road.

Santa Fe has built, or plans to build, around eight solar energy projects on city property. But if the City Council agrees, Fire Station No. 3 will be the only one where the city is evenly splitting the cost with a private entity.

Santa Fe government has previously stuck mainly to “power purchase” agreements where another party builds a system at a city facility and the city gets better electricity rates.

“This would be the first one where I’m saying the city should put up the money and buy it and that’s because with a donation of 50 percent it’s almost as good as if we could take advantage of state and federal tax credits and all those good things,” said Nick Schiavo, the city’s Housing and Community Development director said.

Santa Fe-based New Energy Economy, a nonprofit that works to create clean energy economic opportunities, initially approached the city about working together.

“New Energy Economy said, ‘If we gave you some money, would you match it do a photovoltaic system in the city?’ I said, ‘Without a doubt,’” Schiavo said.

After talking with New Energy Economy, Schiavo did a little research and decided the Fire Station No. 3, off Cerrillos Road and close to Ashbaugh Park, fit the bill.

The station already has several solar panels in place and a parking lot big enough for a larger system. It’s also located in a highly visible area – the better to raise awareness about solar energy initiatives.

Perhaps most importantly, a system can be built at the fire station for the right price: around $80,000.

The cost of the project will be split evenly between the city and New Energy Economy. The city’s portion will come from PNM lighting retrofit rebates.

Specifics haven’t been mapped out, but the general idea is to mount solar panels on a pre-fabricated carport in the station’s parking lot, which fronts on Cerrillos Road.

Schiavo said the system will provide about 25 percent of the station’s electricity.

“We’re getting something for half the price, so I don’t have to wait 15 years to get my money back from energy savings. It’s closer to like eight years,” Schiavo said.

A resolution directing city staff to “review the feasibility” of entering into the partnership was approved last week by the city’s Public Safety Committee. It goes before the City Council for final approval Jan. 11.

If passed, staff will go back to the governing body two weeks later with information including the legality of entering into a financial partnership with New Energy Economy and whether the fire station is a good candidate for a new photovoltaic system.

To Continue Reading: Solar Project Moves Ahead

At stake is a plan by the group New Energy Economy that was adopted last year by state regulators. It calls for large polluters such as coal-fired power plants and refineries to reduce carbon emissions by 3 percent per year from 2010 levels starting in 2013.

SANTA FE, N.M. — A hearing over whether New Mexico should uphold regulations for curbing greenhouse gas emissions has wrapped up after a week and a half of testimony and public comment.

At stake is a plan by the group New Energy Economy that was adopted last year by state regulators. It calls for large polluters such as coal-fired power plants and refineries to reduce carbon emissions by 3 percent per year from 2010 levels starting in 2013.

Steve Michel of Western Resource Advocates urged the board during closing arguments Wednesday to set politics aside and make a ruling based on their best judgment.

Utilities and other industry groups petitioned the Environmental Improvement Board to overturn the plan along with the state’s regional cap-and-trade program.

The board isn’t expected to make a decision until March.

Steve Michel of Western Resource Advocates urged the board during closing arguments Wednesday to set politics aside and make a ruling based on their best judgment.

 To Continue Reading: Closing Arguments Made in Greenhouse Gas Emissions Case

Wearing mostly black and bundled up against the cold, students from the United World College near Las Vegas, N.M., and Santa Fe’s Earth Care International marched Wednesday evening from Warehouse 21 to the PERA building on Paseo de Peralta where state regulators are considering an industry request to repeal a cap on greenhouse gas emissions.

The students plan to protest any reversal of the rule, one of two greenhouse gas rules approved by the state Environmental Improvement Board late last year. The rules would limit the carbon dioxide emissions from large electric utility companies and oil and gas refineries.

More than 250 students and some adults signed up via Facebook to attend the event, called Fighting for Our Future: Youth Climate Action.

To Continue Reading: Youth Support State’s Emission’s Rule 

A Santa Fe environmental group’s greenhouse gas rule adopted by the Environmental Improvement Board under the Richardson administration in late 2010 is back in the new board’s court.

Starting today, a day short of a year since the previous board approved it, the new board begins an evidentiary hearing on a petition to repeal the New Energy Economy rule.

The hearing will start at 9 a.m. in Apodaca Hall in the PERA Building in Santa Fe, across from the State Capitol. There will be public comment sessions at 6:30 each night of the hearing.

The cast of opponents – Public Service Company of New Mexico, the New Mexico Oil and Gas Association, Tri-State Generation and Transmission Association and other industry groups – is the same as it was a year ago. Last month, the groups went before the board – all Gov. Susana Martinez appointees – seeking the repeal of the state’s other greenhouse gas regulation, a cap-and-trade program proposed by the New Mexico Environment Department. A decision is pending.

Opponents’ arguments are virtually unchanged: Complying with the rule would drive up energy costs, jeopardize jobs and put New Mexico businesses at an disadvantage with those in states that have less regulation. They also claim the carbon reductions required by the rule would make little, if any, difference in the battle against global warming.

Lacks common sense

“The cap rule is not supported by statutory authority, technical merit or common sense, and it brings significant costs to New Mexico consumers with no environmental benefit,” Tri-State spokesman Lee Boughey said.

Unlike the NMED – which, under the Martinez administration, did an about-face on cap and trade and called no witnesses to support the measure during last month’s repeal hearing – NEE intends to fully defend its rule.

“The rule is based on sound reasoning and substantial evidence,” said Mariel Nanasi, executive director of the Santa Fe-based, nonprofit NEE. “To overturn it without any new evidence – except for climatic changes are more certain than ever – would be arbitrary and capricious.”

She said entry-of-appearance filings made with the EIB by 23 organizations that support NEE’s position- ranging from environmental advocates and tribal organizations to youth groups and solar and wind businesses – “shows the breadth and depth of support in New Mexico for this rule.”

“Nobody is asking them (industry opponents) to go out of business,” Nanasi said. “We’re asking them to be responsible members of society.”

In reaching its decision, the 2010 Richardson-appointed board declared there was compelling evidence that human-caused climate change is real and causes “severe impacts” to public health. Left unaddressed, it said, the effects could be catastrophic on New Mexico and the Southwest, from increased drought and less snowpack to more heat waves.

Congress ‘impetus’

The NEE measure, it said, would serve as an “impetus” for Congress and other states to act.

The rule would take effect in 2013, but only if the cap-and-trade program or federal emissions regulation are not forthcoming. Initially, it would apply only to the electric and gas and oil sectors, mandating sources that emit 25,000 metric tons or more of carbon dioxide to start reducing emissions by 3 percent a year through 2020. That would include coal and natural gas electric generation plants, as well as refineries, processing and treatment plants and compressor stations.

Companies unable to meet the reduction mandates could buy offsets from unregulated state companies that are able to reduce greenhouse gas emissions. To control costs, the rule set a $50-per-metric-ton limit on what a company would be required to spend to reduce emissions, with $1 added each subsequent year.

Steve Michel of Western Resource Advocates, who wrote much of the NEE regulation, testified the rule provides an “off-ramp” for any company that could demonstrate the cost of compliance would affect its “financial integrity.” He also testified it would increase electricity prices by less than 1 percent, and a fraction of a percent for the oil and gas industry.

A $500 million cost

But critics contend the rule would have enormous economic impacts.

“There are very few options available for electric utilities to meet this rule,” PNM spokesman Don Brown said, noting the rule would affect five PNM power plants. “We don’t have the ability to capture and store carbon, so what this rule results in is curtailing production at some sources that are covered by the rule and shifting to sources that are not.”

That could include switching from coal to more expensive natural gas, or increasing its open market power purchases. “We estimate the cost to PNM customers alone will total about $500 million through 2030,” he said.

To Continue Reading: Emission Rule Back for New Hearing 

Snow halted the first day of testimony in a hearing before New Mexico regulators where power utilities and the oil companies are seeking to repeal a rule capping statewide greenhouse gas emissions.

The rule was proposed by the nonprofit New Energy Economy, and approved in the waning days of the Richardson administration by the Environmental Improvement Board.

It is the second attempt to nix a greenhouse gas rule approved under the prior administration.

A coalition of businesses and others also asked the board to reconsider a rule proposed by the New Mexico Environment Department, establishing a greenhouse gas cap and trade program as part of a regional effort to reduce carbon dioxide emissions. That rule also was approved under the Richardson administration. Carbon dioxide emissions, largely from power plants and oil and gas developments, along with methane emissions, are thought by many climate scientists to be primarily responsible for recent global climate change.

Hearing on testimony in the request to repeal the proposed regional cap and trade rule was finished in November. A decision on that case is not expected until February or March.

The hearing on the nonprofit’s proposed rule will continue at 9 a.m. Tuesday, weather permitting, at Apodaca Hall in the old PERA building at Paseo de Peralta and Old Santa Fe Trail. A decision by the board isn’t likely until spring. Public comments will be accepted at 6:30 p.m. daily during the hearing.

Both the proposed greenhouse gas cap rule, and the state agency’s proposed cap and trade rule were appealed to the state court earlier this year. The state and the petitioners — including Tri-State Generation, Public Service Company of New Mexico, the city of Farmington and others — agreed instead to hold a new hearing on both rules.

The hearings so far have largely included the same witnesses, testimony and information presented to the board previously.

What’s different is the board is entirely new, all appointed by Gov. Susana Martinez, who has said she is not convinced climate change is caused by human activity.

The nonprofit group sought earlier to have three board members recused from the current hearing. Chairperson Deborah Peacock of Albuquerque declined to recuse herself. Board members James Casciano of Albuquerque and Greg Fulfer of Jal, did recuse themselves.

Tri-State and other petitioners have argued the greenhouse gas rules will cost New Mexicans jobs, increase utility bills and will make too small a dent in greenhouse gas emissions without a national policy.

To Continue Reading: Panel Reconsiders Greenhouse Gas Rule