New Report Indicates A Solar Plant Could Generate Thousands of Jobs and $67 M in Revenue for San Juan

By paulgibson51 on January 22, 2019 • ( 1 )

Environmentalists and communities dependent upon coal for local jobs and revenue have often been pitted against each other as shutting down coal translated into a sacrifice zone. Environmental groups had argued that development of renewable energy to replace coal could replace those lost jobs and local revenue. Now a well-researched report documents just that. And just in time.

Our report on San Juan energy options follows the Roundhouse Roundup.

Roundhouse Roundup: We have sent out Action Alerts to Statewide Rapid Response Network members as we have 4 MUST PASS bills being heard in committees today and tomorrow. On Thursday, we know that in separate committees 5 gun violence prevention bills will be heard as well as the Community Solar Act will be heard. So we are in high gear. To get Action Alerts, you need to JOIN the Network.

Action Alert: One MUST PASS Bill to be heard on Tuesday and Three on Wednesday. We will send alerts to Network members who have a representatives on the hearing committees. But we also want to alert the entire Network in case you want to come to the Roundhouse for this:

House Labor, Veterans & Military Affairs Committee: Tuesday, Jan. 22 – Immediately Following Floor Session (About 1:30–meet at 12:45, see below) – Room 315

HB 31 PHASED-IN MINIMUM WAGE INCREASE (GARCIA MP/FERRARY)

House State Government, Elections, and Indian Affairs Committee: Wednesday, January 23 – 8:30 A.M (meet at 7:45am, see below). – Room 305

If you come to the Roundhouse to advocate either day, meet across from the first floor Mail Room 45 minutes before the hearing (one floor below the east entrance to the Roundhouse). To get to our meeting place, go to the East Lobby, go down the stairs to the first floor and you will arrive at the Mail Room. Meet Susan McGrew at 12:45pm on Tuesday and at 7:45am on Wednesday. She will have summaries with speaking points, buttons, and coach those who’ve never offered public comment at the Roundhouse.

NM Voices for Children Report Indicates Lost Revenue & Jobs from San Juan Generating Station Can Be Replaced with Solar Plant

A just published report from NM Voices for Children indicates that investment in a San Juan-based solar plant could replace jobs and revenue lost from closing San Juan Generating Station, while helping the state achieve proposed higher Renewable Portfolio Standards. The report could hardly be more timely as new legislation has just been introduced to increase the state’s RPS and a Securitization bill should be introduced very soon. That bill will include plans for replacing lost power from the closure of San Juan Generating Station. Both bills will be considered in the Roundhouse over the next days and weeks.

Before diving in to a very promising report, a short definition of terms. I have found that these terms can be extremely complex and so I have tried to put them in lay terms, more easily understood by most humans. If there are energy wonks out there who want to send me suggested amendments, that would be much appreciated, as over the next few weeks, these terms will be used frequently in committee hearings and the media.

Renewable Portfolio Standards = the goal for the mix of energy sources produced by New Mexico utility companies with goals set in terms of % of renewable energy at specific points in time. The current RPS calls for 20% RPS in 2020 and the new Senate Bill 275 calls for 80% by 2040. As our second report indicates, NM utility companies are not exactly reaching even the very modest 2020 RPS goal.
Replacement Power. By closing the San Juan Generating Station, PNM will lose about 485 MW of power. In the Securitization bill that is coming, the bill will stipulate what power sources should be used to replace that lost power. The mix of replacement power selected will be an important factor in NM achieving any new RPS goals.
Securitization. Utility companies invest in infrastructure and equipment to generate power. When a power generating source is no longer economically viable, utilities have an investment in infrastructure (e.g. coal plant) that becomes a “stranded asset,” in that there is no longer a way to generate revenue from that investment. Securitization is a mechanism by which a utility may seek to recover some or all of its stranded assets. There is likely to be a big debate about how much of PNM’s stranded assets should be recovered and how much should be paid by rate payers versus share holders. A factor in that determination will be the degree to which PNM acted prudently or imprudently in continuing to invest in coal and nuclear. Some environmental advocacy organizations have claimed that PNM imprudently continued to invest in nuclear and coal when it was becoming clear that they were no longer economically viable. On to the report.

From the report: “Economic modeling indicates that a 450 megawatt solar photovoltaic plant at or near the site could replace all lost property tax revenue, support thousands of jobs over two or more years of construction, and generate more than $67 million in additional tax revenue for state and local governments.”

The report identifies specific legislative and regulatory changes that could facilitate a just economic and energy transition in San Juan. From the report: “A number of statutory and regulatory steps can be taken to help realize the myriad potential benefits of productive redevelopment at SJGS. These include: requiring renewable generation at the site as part of PNM’s cost-recovery plan, increasing the New Mexico renewable portfolio standard (RPS), creating an RPS carve-out for brownfield solar, and extending the New Mexico Renewable Energy Production Tax Credit.”

We will be watching for legislation that begins the process of achieving this kind of pivot, but some of these elements are already in the legislative pipeline.

A Renewable Portfolio Standard bill calling for an 80% renewable energy mix by 2040 has just been introduced in the Senate (SB 275) and after we check with partners this will very likely become one of our MUST PASS bills. PNM’s cost recovery plan (AKA, Securitization) is due to be introduced any day now. One of Retake’s criteria for supporting or opposing that bill will be whether it includes gas and nuclear or solar and wind as replacement power sources for the lost coal power from closing San Juan. With this study, there is important evidence that an investment in a 450 megawatt solar plant could create far more jobs than the number employed in coal and could replace the lost state and local revenue generated by current San Juan Generating Station.

The Voices report is a 14-page, data rich document that is not bedside reading, but includes very credible, well substantiated job and revenue projections, projections that provide important evidence that San Juan does not have to continue to coddle PNM to save jobs and sustain a local revenue base. It will be important to take the work from this study and distill it into a brief document to share with legislators in the event that the Securitization bill introduced by Sen Jacob Candelaria contains more gas and nuclear for replacement power, than renewable. But at least we have a well-researched study that offers strong evidence that economically viable renewable alternatives exist as an environmentally preferable energy option for San Juan and the state. Needless to say, a 450 MW solar plant would significantly improve the state’s RPS. As the following report suggests, the state will need to embrace renewable options such as this if it has any hopes of meeting an ambitious RPS goal. Click here to read the Voices report.

An 80% RPS Is a Great Goal, But a Report Suggests We Can’t Even Get to 20% by 2020

Today’s Santa Fe New Mexican reported that, despite utility reassurances, all of New Mexico’s utility companies are on pace to significantly under-perform on RPS goals that are already in place that offer a 20% RPS by 2020. A quick check of the calendar points to 2020 being next year, so there is precious little time to boost projections enough to meet the 2020 goal. From the New Mexican:

“Ask representatives from New Mexico’s three public utility companies if they’re poised to comply with a state mandate to sell 20 percent renewable energy by 2020, and the answer is likely to be a resounding yes. A deeper dive paints a more complex picture. According to data from the state Public Regulation Commission, which signs off on companies’ renewable plans, all three utilities will come up anywhere between four and eight percentage points short of the oft-publicized milestone…. Taking all three companies’ total projected sales into account, New Mexico’s renewable portfolio in 2020 will hover just below 15 percent.”

So, despite plunging costs for renewable energy, none of our major utility companies are coming even close to the most modest 2020 20% RPS goal, indeed collectively they fall short by 25%. The New Mexican report provides estimates of RPS achievement for all NM utilities and comments from various stakeholders. Click here to read the report.

That our utility companies are so badly under-achieving on the 2020 RPS goal, is the reason New Mexico needs bold leadership to hold these utility companies accountable. The mechanisms for doing so reside both with the Public Regulation Commission, that now has a Commission with a 3-2 split with the majority of the Commissioners favoring renewable alternatives. The other mechanism is in the Roundhouse where new RPS standards will be enacted and where other energy bills have been introduced and where the looming Securitization bill will be coming soon.

Retake has made three energy bills MUST PASS bills with the RPS bill likely to make it four.

HB210 Community Solar Act
SB39SolarMarket Development Tax Credit
SB186 Oil Conservation Division Powers & Duties
SB 275 RPS—Just introduced and likely to be added to our MUST PASS list.

The best way to track these bills and to get action alerts when these bills are being heard in committees (where many good bills die) is to JOIN the Statewide Rapid Response Network.

In solidarity,

Paul & Roxanne