New Mexico is 50th in everything good. And it’s our children who suffer most. Addressing the needs of children and other underserved communities costs money. NM is always scraping together a budget, but with insufficient resources our state is constrained in what it can do. We can do better.
In 2020, $2.8 billion, more than 33% of state revenues, came from the oil and gas industry. A recent NM State Tax Research Study describes how gas and oil revenue is becoming less and less reliable with each passing year. While gas and oil revenues are projected to remain stable for a decade, even the fossil fuel industry itself recognizes the limited life and diminishing value of this revenue. But even with existing gas and oil revenues, where are we? 50th. The question is “What can we do to stabilize and grow our revenue base and create more jobs?” We can’t diversify the economy sufficiently by expanding the film industry or eco-tourism. We need something big and we need it now.
One answer to this challenge is production of emission-free electricity from our abundant supply of wind and solar, both for our own use and to export to other parts of the country. This is an opportunity to address our dependence on gas and oil, expand our revenue base, provide plentiful new jobs, and infuse our local economies with opportunity. We stand at a crossroads. We can sit back and let Avangrid merge with PNM, use ratepayer money to construct generation and transmission infrastructure, and allow foreign shareholders to profit. Or we can manage that process ourselves, put our immense reserves to work, secure low-interest federal loans, and generate renewable energy profits for New Mexicans. This is our choice.
NM managing its own grid and exporting our abundant renewable energy is a once-in-a-generation opportunity, but we must act quickly. This window of opportunity requires timely, bold, thoughtful action and a new direction. As Thursday’s Zoom Webinar will describe, this is a technically feasible plan that faces immense political challenges. But imagine a New Mexico that produces 100% of its energy needs while generating a much larger supply of clean energy for export to other parts of the country. It’s a future of reduced energy costs, lower utility rates, and increased energy revenues. But to do this we must abandon century-old approaches.
The Investor Owned Utility (IOU) model has remained essentially unchanged since the 1890’s. Profit is driven by investments in expensive energy infrastructure – IOU’s like PNM, Xcel, and El Paso Electric receive a guaranteed 9.575% Return on Equity (ROE) for capital investments, resulting in a perverse incentive to invest in high-cost capital assets that produce expensive electricity rather than investing in the greatly reduced capital expenditures for renewable energy – assets that produce cheap energy. Gravitating toward development of the most expensive energy options has always been the modus operandi of NM’s IOUs because it makes perfect business sense. Generate the maximum possible profit. That is all that matters to IOUs.
Low-cost energy efficiency, distributed power, and customer service are anathema to IOU profits. Change, especially the change required to move to 100% renewable energy is slow-walked within the IOU model. This means, among other things, the kind of change necessary to build a renewable energy system is slow and the effort to diversify our economy is caught up in bi-partisan defense of old positions.
Some will say the cause of this slow walk is due to moneyed interests (the IOUs and the gas and oil industry) and their influence throughout the legislative process. Certainly this is a factor, but I think another more insidious factor is our institutional fear of the new, fear of the bold, fear of change. No politician wants to be on the forefront of a policy initiative that crashes and burns, so the tendency is to stick with the status quo. But in NM, the status quo keeps us dependent on gas and oil revenue and stuck at 50th in the good things we want for our state.
The only way to address that fear is through an educational campaign that involves people like you talking with people who trust you, people who feel you would not advocate for something that didn’t make sense. In a context of trust, people can listen to and absorb a new idea. They do not feel as threatened. With an opportunity to hear dialog and debate among clear authorities, they can take in something new.
In a recent meeting of those organizing the Public Power Zoom Webinar this Thursday at 6pm (link to register), one of the members, Gail Evans, spoke of an experience she had taking a walk with a good friend. Gail came to the last two months of weekly planning sessions with deep legal experience and knowledge, being one of the lead attorneys on the Yazzie-Martinez lawsuit that forced the state to significantly accelerate and increase funding for its education system. But Gail did not have an understanding of how Public Power could work. Then in a recent meeting the light went on — she got it. And on a walk with a friend she laid out that understanding and her friend got it.
Gail now has a well-grounded understanding of the immense potential that public power offers the state of NM. This Thursday, July 8, from 6pm to 7:30pm, Retake Our Democracy, Renewable Taos, the NM Land Office, New Energy Economy, and public power advocates from Maine will provide you an opportunity to secure this same kind of understanding.
Armed with that understanding, you will be able to reach out to others, share a recording of the Zoom, and start the community education process that needs to unfold between trusted friends and colleagues. You may even have a strong relationship with your legislator and, even today, you could send them a link to this post and encourage them to attend our Zoom. We already have four legislators registered to attend, so that is a start.
That’s all for today. Info on the Thursday Zoom follows. Now it is up to you.
- Do you have a few minutes to publish a link to this post on your Facebook page and encourage the people you know to attend?
- Could you spend just a few more minutes and write to a few friends, perhaps a legislator and encourage them to attend the Zoom, providing a link to this post?
Thursday, July 8, 6pm-7:30pm Conversation with Maine Energy Advocates, Renewable Taos & Kit Carson Electric Co-op Trustee Bob Bresnahan, & Utility Legal Expert Mariel Nanasi, ED of New Energy Economy. First, we will hear from from two Maine energy activists who are fighting Avangrid and advancing a statewide initiative to develop a state public utility in Maine. Then we will hear from NM experts on how a NM public utility could be created as an alternative to private shareholder owned utilities like PNM, Xce,l and El Paso Electric:
- Vaughan Woodruff. Woodruff has been an outspoken advocate for renewable energy in Maine and has extensive experience implementing solar power within the Central Maine Power/Avangrid/Iberdrola utility territory. He has testified at the Public Utility Commission and is a powerful advocate for new legislation in Maine that would create a public power utility, Pine Tree Power, to protect the people of Maine from Avangrid’s incompetent, unreliable service and obstruction of distributed solar power.
- William Dunn, President of Sunset Point LLC. Dunn has over 49 years of experience in working with electric utility organizations of all ownership types (i.e., public, private, local and federal). He has held senior positions in utilities and on power pool/market committees. Bill is a leading advocate and lobbyist for the newly proposed public power legislation in Maine and has testified extensively about the failures of Central Maine Power, Avangrid, and Iberdrola to serve the public interest in Maine.
- Bob Bresnahan is a co-founder of Renewable Taos, a Kit Carson Electric Co-op Trustee, and a strong advocate for harnessing NM’s immense renewable energy potential by creating a state public utility, accelerating NM’s transition to 100% renewable energy use, while enabling the state to generate and transmit energy to other states, creating an immense level of sustainable revenue and hundreds of jobs.
- Mariel Nanasi is Executive Director of New Energy Economy. Nanasi knows well the legal challenges involved in forming a public utility and the immense environmental and economic impact that are possible by creating a public utility.
Click here to register.
And Tell Your Friends
Let’s do this! I am sick and tired of dependence on gas and oil and a scarcity based state budget. Let’s think bold, diversify our economy, and invest in our underserved communities. And let’s start today.
In solidarity and hope,
Paul and Roxanne
P.S. The reason Roxanne and I have hope, is that ultimately we believe in you and your power. Let’s do this together.
Categories: Climate Justice, Uncategorized
Yes, these are all good ideas to finally stop depending on oil and gas and moving us up in indicators of well-being, especially for our children. Controlling and exporting our abundant energy makes so much sense. Another good idea is to put our taxes in a New Mexico Public Bank. While we recognize a Public Bank will not solve all of New Mexico’s economic weaknesses, our vision is that by partnering with local banks, credit unions, municipalities and tribal entities a Public Bank can:
• Increase local agriculture and food growing and processing endeavors.
• Invest in renewable energy and related technological businesses.
• Invest in health clinics and community educational systems that recognize the most productive and creative people in any community will be healthy, knowledgeable, and open to learning at any age.
• Contribute to the diversification of the economy by helping to bloom small entrepreneurial activities grounded in local cultural strengths.
• Increase financial resources to corners of the state that are often neglected in national and statewide programs.
Lending money is more powerful than saving money. A Public Bank can leverage its capital by lending up to 10 times its equity value, and still be profitable. Thus, NM Public Bank loans and profits can be the state’s next economic stimulus.
Excellent post. Sticking with oil and gas is like Catch-22. If it doesn’t crash and revenues hold steady for 10 years the world goes up in flames. If we count on it, and renewable energy progresses as rapidly as some of us think, we’re stuck in 50th, left behind once again. The only real way forward that is a win for NM is to aggressively build out solar, wind, and batteries, for our own use but especially for export.