New Mexico’s major electric utilities can’t resist abusing their monopoly status.
Take the state’s largest electric utility, PNM. In the past decade it:
- Made a disastrous decision to continue its reliance on coal generation;
- Upped the ante by investing in ineffective coal pollution controls to pump up billings and profit;
- Plotted to extravagantly overpay for nuclear generation, once again to pump up billings and profits.
PNM is now in the process of:
- Dumping its coal plants at a huge loss that will be charged to ratepayers;
- Attempted to sidestep responsibility for closing coal plants by transferring the Four Corners Power plant to a third party;
- Reneging on its agreement with legislators to issue cost saving bonds promptly upon abandonment of San Juan power plant;
- Reneging on understandings it would credit rate payers immediately for reduced operating costs as coal facilities are closed;
- Joining the state’s other major public electric utilities, Southwestern Public Service Company and El Paso Electric, in obstructing the legislature’s landmark Community Solar program.
We should not suffer utility monopolies with a record of poor decisions, contempt for ratepayers and foot-dragging on much needed reforms. Fortunately, a thoughtful proposal to end the electric utility monopoly stranglehold on New Mexico is in front of the Legislature this year. It’s called the Local Choice Energy Act.
SB 165, the Local Choice Energy Act, authorizes counties, municipalities and tribes to generate or purchase electricity for their residents. Local Choice Energy providers set their own rates and establish their own consumer programs with community input and oversight. Many have chosen to go 100% renewable. Local Choice territory customers can choose to keep their existing service but now have a potentially superior alternative. Existing utilities continue to operate transmission under PRC regulation with compensation from Local Choice providers at retail rates.
Monopoly utilities, notorious for their resistance to progress, are required to work with local entities willing to adapt, experiment and push the electric grid into the future. Ongoing problematic and litigious state level regulation is reduced.
Local Choice is not a radical concept. Versions of it are widespread throughout the country, serving millions of Americans in 10 states and more than 1,300 communities with safe, reliable electricity. New Mexico will benefit from the extensive debugging that has occurred along the way. Local Choice is the prudent way to introduce competition into the electric utility world. Local Choice providers are required to have exhaustive plans approved by the Public Regulation Commission before commencing operations. Grid operations maintain continuity because existing utilities can make up for lost retail business by selling electricity wholesale.
Local Choice Energy is a proven policy that delivers reliable energy. Local Choice delivers stable and frequently lower rates across the nation.
As a PRC commissioner I was charged to protect the public interest. My support for Local Choice Energy is an extension of that effort. Local Choice legislation is the prudent route to ending monopoly abuses, empowering local communities to set energy priorities, and moving our electric grid into the future. Let’s pass it this year.
