NM Capitol 0326

The New Mexico Capitol in Santa Fe.

New Mexico ratepayers will soon have access to community solar installations provided Gov. Michelle Lujan Grisham signs a bill, passed late in the legislative session, that would make solar power available on a subscription basis.

Other bills that passed during the state's regular 2021 session, which concluded March 20, cover grid hardening; energy-efficiency and sustainable-building rules; "just transition" priorities as the state moves away from fossil fuels; and an emphasis on environmental enforcement.

A bill that would have given ratepayers the option for "local choice energy," known as community choice aggregation in California, failed again this session, as did several others that would have further changed the energy landscape in the state. Observers anticipate that many of the concepts addressed in those bills will return either in a special session to be held later this year or in future regular sessions.

SB 84, the Community Solar Act, would allow residential or small-business customers, as well as school districts, municipalities and tribal governments, to subscribe to community solar installations with a generating capacity of 5 MW or less and receive bill credits relative to the percentage of their subscription in the installations. The installations would be owned by investor-owned utilities and rural electric cooperatives that opt in to the program.

SB 112, if signed, would create a Sustainable Economy Task Force to recommend economic-diversification opportunities in the state. It implements the recommendations of a state Department of Workforce Solutions study to put state workers and communities that are most impacted by the energy transition at the forefront of a just transition to a clean-energy economy in New Mexico. A combination of economywide greenhouse gas standards with equity and just-transition components in HB 9, the Climate Solutions Act, which otherwise died in committee, were incorporated into SB 112.

HB 15, the Sustainable Buildings Tax Credit, updates tax credits for energy-efficient buildings first adopted by New Mexico in 2015. Revisions to the state's building standards in 2020 make developers eligible for tax credits simply by complying with the current rules. "The 2021 SBTC goes further to incentivize only the best building practices and also incentivizes energy efficiency improvements to existing homes and buildings," Tammy Fiebelkorn, New Mexico representative for the Southwest Energy Efficiency Project, said in a news release. Fiebelkorn called the bill "a big assist for meeting our climate goals."

Under the new rules, buildings must be highly energy efficient, have broadband access and be electric vehicle-ready to qualify for the credit. Extra credits are available for meeting higher standards, and requirements for earning the credit will increase over time. The new rules also include credits for upgrading existing buildings with Energy Star-rated heat-pump water heaters, windows and doors, or for installing EV charging equipment.

HB 245 clarifies that grid-modernization projects can include utility distribution system hardening and substation projects intended to reduce outages and improve efficiency and security. The bill specifically points out efforts that would support interconnection of New Mexico's grid into regional markets and increase access to emissions-free and renewable energy.

A number of bills passed that would assist the state in beefing up environmental enforcement, including HB 51, the Environmental Database Act, which would create a publicly accessible central database for environmental reports and statistics. SB 8, if signed, would allow state and local governments in New Mexico to impose and enforce air-quality regulations that exceed those of the federal government. HB 76 would allow the state's environment department to revoke or deny permits to companies found to have lied on their applications or been otherwise noncompliant with environmental laws.

The Legislature increased budgets for New Mexico environmental regulatory departments in its 2021 General Appropriation Act, HB 2. The departments faced considerable cuts over the past decade and, like many state agencies, have been operating at a deficit. For fiscal year 2022, the state's environment department will cut its previous deficit but will still be operating below 2011 levels when adjusted for inflation.

"The underfunding of our critical environmental regulatory agencies has left New Mexicans and communities most impacted by climate change and pollution to fend for themselves," Liliana Castillo, deputy director of Climate Advocates Voces Unidas, said in a news release from the Sierra Club's Rio Grande Chapter.

Notable bills that failed to advance to the governor's desk this session include HB 206, the Utility Relief and Affordability Act, which would have prohibited utility disconnections resulting from circumstances attributable to the COVID-19 pandemic and authorized the New Mexico Public Regulation Commission to establish low-income rates for regulated utilities. The bill also would have created a block grant to distribute federal Coronavirus Aid, Relief, and Economic Security Act funds for energy-efficiency projects in low-income communities, which supporters said would have resulted in the funds being more readily disbursed. Critics of the bill, including the NMPRC, saw it as an unfunded mandate that would have created more work for the commission without appropriating additional resources. HB 206 passed in the House and in the Senate Tax, Business and Transportation Committee, but was not heard in the Finance Committee.

NMPRC member Cynthia Hall at the commission's March 24 meeting applauded staff for raising the Legislature's awareness of the commission's "budgetary plight" during the session. NMPRC Chief of Staff Jason Montoya said at the meeting that a lot of energy bills that include unfunded mandates will likely be resurrected on the governor's agenda or return during the Legislature's next 60-day session.

Shortly after the Legislature adjourned, Lujan Grisham said in a news release that she would call a special session as soon as March 31 to focus on legalizing recreational cannabis. Montoya said he expects other bills could also be revived in a special session. Lujan Grisham is expected to sign the bills sent to her, as New Mexico has a Democratic trifecta with both legislative chambers just one member shy of a Democratic super-majority. Legislation will be pocket-vetoed, however, if not signed as of April 9.

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Associate Editor - California Energy Markets

Abigail Sawyer grew up in northwestern New Mexico near two massive coal-fired power plants. She spent many hours gazing out the car window at transmission lines on family road trips across the Southwest and now reports on the region from San Francisco.