In 2019 the New Mexico Legislature passed an energy omnibus bill that combined one of the highest Renewable Portfolio Standards in the country with a financial mechanism known as securitization. Securitization provides an avenue for monopoly utilities in NM to recover the "undepreciated" or lost assets of a power plant they retire by selling federally backed bonds on Wallstreet - and paying them back to bondholders through a 25 year non-bypassable charge on New Mexican's electricity bills. The ETA also included transition funds for workers, workforce development and for economic transition. After a critical campaign led by frontline organizers, the bill was amended last year to add some funds (though not nearly enough) for Indigenous impacted communities who have borne the brunt of energy extraction in our state.
But the Energy Transition Act also included clauses that, if left unchanged, will charge struggling New Mexicans for any undepreciated investments and decommissioning ("clean-up") costs the monopoly utilities propose, with no oversight from the regulatory agency. This interpretation of the language in the ETA law is not just that of consumer advocates, but of the utilities themselves, of our regulatory agency, of NM legislative analysts, and of regulatory lawyers throughout the state and country.
The cost to New Mexican households when regulatory protections have been stripped are alarming. PNM's undepreciated investments for all of its outstanding fossil and nuclear investments are over $2B
This translates into a minimum "non-bypassable” charge of $6.48/month per household for 25 years BEFORE decommissioning costs are even included or interest rates increase. For households already stretched thin financially and a state economy that needs to keep money circulating locally, that's a lot of money leaving NM to out of state PNM bond holders.
The problem is that the ETA does NOT allow the PRC to reduce this amount at all. New Mexicans deserve to have these proposals evaluated, modified, and decided by the regulatory agency created to protect us.
The Energy Transition Act Amendments have been written to leave the good parts of the law intact (the financial tool of securitization, the Renewable Portfolio Standard, and the transition funds) while making three surgical changes:
