STATEWIDE ENERGY AUTHORITY
The ultimate expression of Public Power, a statewide energy authority, has been operational in the State of Nebraska since the 1930's. Tired of abusive corporate practices, residents and advocates of publicly owned utilities took a proposal straight to the voters, bypassing the corporate-influenced legislature which had previously failed to pass similar legislation. It was approved overwhelmingly—signaling both popular support for publicly owned utilities in the state and also the beginnings of their resurgence.
Nebraskans pay one of the lowest rates for electricity in the nation and revenues are reinvested in infrastructure to ensure reliable and cheap service for years to come.“There are no stockholders, and thus no profit motive,” the Nebraska Power Association proudly proclaims. “Our electric prices do not include a profit. That means Nebraska’s utilities can focus exclusively on keeping electric rates low and customer service high. Our customers, not big investors in New York and Chicago, own Nebraska’s utilities.”
Payments (in lieu of taxes) from the state’s publicly owned utilities exceed $30 million a year and support a variety of social services throughout the state—including the public education system.
In 2021 New Mexico's Investor Owned Utilities (IOU's) took a combined $280 million in profit from NM families to benefit their Wall St. shareholders. Imagine what we could do for our communities if those dollars were instead reinvested here each year?
Sound exciting? A 2021 study by the HBailey group estimated that NM could earn upward of $1 Billion per year if the state developed and sold renewable energy to Western states that are demanding more and more renewable energy each year.
These benefits are only possible if New Mexico takes the bold step that Nebraska took - if we take back our power from the monopoly IOU's that are holding us back.
IT'S NOT THE 1930'S ANYMORE. WHAT FORCES ARE AT PLAY NOW?
Within the next decade trillions of dollars will be invested in energy infrastructure across the United States. From federal policies to market forces to the inevitable replacement of retiring fossil fuel plants, the transition to renewable energy sources will necessitate a massive restructuring of not only the power grid and generation sources, but energy markets, ownership and control. With some of the highest solar and wind capacity of any state in the nation and the ability to deliver terawatts of energy to our neighbors and beyond, New Mexico will be presented with numerous opportunities and important decisions as this transition unfolds.
Profound Technology Disruption
We are on the cusp of the fastest, deepest, most profound disruption of the energy sector in over a century. Like most disruptions, this one is being driven by the convergence of several key technologies whose costs and capabilities have been improving on consistent and predictable trajectories – namely, solar photovoltaic power, wind power, and lithium-ion battery energy storage. As we are already witnessing, coal, nuclear, and gas power assets will become stranded during the 2020s, and no new investment in these technologies is rational from this point forward. We need to take advantage of the speed, scale, and implications of the disruptions that we expect to unfold in a rational context because renewables plus battery storage will offer the cheapest electricity option for all, an effective way to address global warming, and create enormous local benefits. Under the IOU model returns on investments and profits are exported to Wall Street. Public ownership means the public benefits.
Investor Owned Utilities are Designed to Obstruct Any Change that Lowers Costs or Promotes Efficiency
The transition cannot be facilitated effectively by our current IOU structure. Under the current energy model - investor-owned-utilities’ plant ownership and energy investments are guaranteed a return on equity, which creates a perverse incentive NOT to invest in energy sources with fixed capital costs and no fuel costs. Despite New Mexico’s abundant natural resources, 2nd in the country for solar potential and 11th in the country for wind potential, and the sun Zia on our flag, each of the state’s investor-owned-utilities (“IOUs”) have relatively small percentages of solar in their energy portfolios. A major driver of New Mexico’s relatively expensive electricity is the state’s dependence on coal, nuclear, and gas for electricity generation. It is not only because the fuels are costly to extract and cause harmful consequences for the climate, environment and workers, it is because these thermal units require the constant investment of capital expenditures to keep them operational (ie., large equipment like boilers and silos, pollution controls, etc.). Additionally, an enormous amount of scarce water resources is used throughout the life cycle. The transition we need is not moving forward because IOU's make less money from solar and wind installations that operate for decades without significant upkeep.
New Mexico is Uniquely Positioned to Profit from the Expansion of Renewable Energy
According to a study by New Mexico’s Renewable Energy Transmission Authority (RETA), New Mexico has potential to support significant wind and solar resource development, with 137,000 MW of wind available and 824,000 MW of solar on State Trust and private lands. Total investment in the development, construction, and operation of new renewables and transmission ranges from $9.3 billion to $11.2 billion through 2032. According to the Renewable Energy Transmission and Storage Study, renewable energy generation is estimated to create up to 3,700 development and construction jobs by 2032, with 800 permanent jobs into the future.
The Renewable Energy Transmission and Storage Study finds that New Mexico is uniquely positioned to supply renewable energy power to western and midwestern states that have a limited wind/solar energy footprint. In addition to New Mexico, both the State of California and State of Washington will require 100% clean energy supply by 2045. Other western states like Nevada, Oregon, Colorado, Montana, and Arizona have near-term and long-term Renewable Portfolio Standards targets. Public power could help us realize the full potential of our state’s renewable energy markets in a way that maximizes revenue and opportunity for the state and local communities.
A STATEWIDE PLAN IS NECESSARY TO PROTECT THE PUBLIC INTEREST
Now, more than ever, public sector leadership is necessary to analyze the complex interplay between individuals, businesses, investors, and policymakers in assessing existing solar photovoltaic, wind power, and lithium-ion battery technologies that have well-established cost curves, and on existing business models and the impact that this economic disruption may have as it ripples across the rest of society.
Strong leadership and urgent action is necessary to ensure that the transition not only accelerates at the speed required, but also that the benefits of plentiful, low cost energy accrue not only to private corporations but to the people. Without urgent action, private corporations will slow-walk the transition we need and manipulate systems to ensure their profits are protected above all else.
The road to an integrated, efficient statewide energy generation, transmission, distribution and export system is through a statewide energy authority.