Legislation introduced in the New Mexico legislature would increase the state’s renewable energy mandate (REM) and provide a consumer-paid financing mechanism for a forced transition to wind and solar power.
Senate Bill (S.B.) 275 would increase the amount of electricity utilities are required to provide from “renewable” sources from the 20 percent by 2020 currently required by the state’s REM, to 50 percent by 2030 and 80 percent by 2045.
S.B. 489 would help finance the transition from fossil fuel powered electric plants to renewables through the establishment of “energy transition bonds” to be paid off by a “non-bypassable charge paid by all customers of a qualifying utility for the recovery of energy transition costs,” the bill states.
Documented Cost Increases
States with REMs have had their energy costs rise twice as rapidly as the national average, with electricity prices being 26 percent higher on average in states with REMs than in those without them, states a paper by Timothy Benson, a policy analyst for The Heartland Institute, which publishes Environment and Climate News. The higher the REM, the greater the increase in electricity prices.
Benson’s paper cites a study by the Brookings Institution which found replacing conventional power with wind power raises electricity prices by 50 percent and replacing conventional power with solar power triples electricity costs.
Benson found New Mexico’s existing REM cost state taxpayers and ratepayers more than $192 million in 2016, raising electricity prices by 6.18 percent. Additional REM-related costs included a loss of more than $405 million in economic activity and the loss of more than 3,000 jobs in the state.
This research indicates New Mexico’s current REM will increase electric power prices in the state by an additional $206 million by 2020, with electricity prices increasing by a further 6.77 percent, resulting in an additional 3,500 jobs lost and $444 million in additional foregone economic activity. Those costs would be expected to rise substantially if New Mexico increases its REM requirement as proposed in S.B. 275.
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