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New Mexico legislators introduce bills addressing electric utility industry, emissions

Hannah Grover
Farmington Daily Times

AZTEC — As climate change and the COVID-19 pandemic remain a focal point for New Mexico lawmakers, several bills relating to the utility industries aim to address those topics.

Some of these bills build on the past efforts such as the Energy Transition Act. Others promote carbon capture or seek to protect ratepayers from potential rate increases lawmakers say could come as utilities adopt more aggressive renewable portfolio standards.

Still other bills seek to address the impacts that COVID-19 has had on utility customers as well as the utilities.

Legislature:Leaders seek to address COVID-19 pandemic, economy

Here is a look at some of the bills that were introduced this week.

Rep. Rod Montoya, R-Farmington, is one of the sponsors of a bill that would temporarily exempt carbon dioxide from carbon capture projects from severance taxes.

Montoya signs on to bill promoting use of carbon dioxide from carbon capture

As Farmington and Enchant Energy are working to acquire the San Juan Generating Station and retrofit it with carbon capture technology, a group of Republican state lawmakers have introduced a bill that would encourage the use of the carbon dioxide captured from the plant. 

Rep. Larry Scott, R-Hobbs, Rep. James Townsend, R-Artesia, Rep. Randall Pettigrew, R-Lovington, and Rep. Rod Montoya, R-Farmington, have sponsored House Bill 181, known as Oil and Gas Tax Changes. 

National:Rep. Yvette Herrell joins bill to block future bans on oil and gas leases

This bill would promote the use of captured carbon dioxide in enhanced oil recovery by temporarily exempting it from the severance tax on carbon dioxide. This would apply to carbon dioxide captured from the San Juan Generating Station as well as direct air carbon capture. Occidental Petroleum, or Oxy, is working to develop a direct air carbon capture facility in the Permian Basin in west Texas. This would be the largest direct air capture facility in the world. Both projects intend to sell the captured carbon dioxide for use in enhanced oil recovery.

House Bill 181 was introduced on Jan. 25 and has been referred to the House Energy, Environment and Natural Resources Committee.

If passed, carbon dioxide from carbon capture facilities would not be subject to severance taxes until 2030.

Energy:Groups ask PRC to dismiss Four Corners Power Plant ownership transfer

The Bluffview Power Plant is pictured on Tuesday, Jan. 16, 2017 on West Murray Drive in Farmington.

Duckett urges councilors to pay attention to the Clean Electrification Act

The Clean Electrification Act, introduced by Rep. Nathan Small, D-Las Cruces, on Jan. 25, has caught the attention of Farmington Mayor Nate Duckett.

During the Jan. 26 City Council meeting, Duckett urged the city councilors to read over the bill. 

While previous legislation, including the Energy Transition Act, had only applied the renewable portfolio standards requiring zero-emissions power by 2045 to utilities regulated by the New Mexico Public Regulation Commission, House Bill 137 includes municipal utilities such as Farmington Electric Utility System and Aztec Electric Utility in those requirements.

The City of Aztec's solar farm is pictured in this undated file photo.

"I think we need to pay attention to that," Duckett said.

Farmington currently receives electricity from coal, natural gas and hydropower while Aztec receives electricity from solar, wind, hydropower and other energy purchased on the market through its contract with Guzman Energy.

Solar:Farmington asks appeals court to deny appeal in solar rate case

However, the bill does more than just address municipal utilities.

A press release from Western Resource Advocates and the Natural Resources Defense Council states it will "bolster and diversify New Mexico’s economy, capitalize on New Mexico’s abundance of carbon-free energy, provide a robust New Mexico response to the threat of climate change, and help bring electricity service to low income and indigenous households that now lack lights and power."

John Armenta, an engineering manager for Farmington Electric Utility System leads a tour of the Cottonwood Substation, Friday, Aug. 10, 2018 in Farmington.

One of the tools that it creates to reduce emissions is a Clean Electricity Credit that can be sold or transferred. It also provides incentives for electric utilities to provide service to people within their service are who do not have access to electricity, especially in Native American and low-income communities.

“The Clean Electrification Act means New Mexicans will enjoy the benefits of our changing energy landscape," Small said in the press release. “We build on the foundation laid by the Energy Transition Act with a two-pronged approach of electrifying homes, businesses, and industry, while at the same time ensuring the electricity serving those new loads remains clean and emission-free.”

The bill has been referred to the House Energy, Environment and Natural Resources Committee.

Others are reading:Groups say PNM could force San Juan Generating Station closure

State House Minority Whip Rod Montoya (R), debates his motion to require in-person voting during the annual New Mexico legislative session on Monday, Jan. 25, 2021, in Santa Fe.

Montoya, Lane and Strickler lead bill on renewable energy standards

On the other side of the aisle, three San Juan County legislators are among the sponsors of a bill that would prevent large rate increases as investor-owned utilities increase their renewable portfolio standards. The bill states that the increase in renewables shall not lead to rate increases of greater than 2% in one year or 5% in three years.

Rep. Rod Montoya, R-Farmington, Rep. James Strickler, R-Farmington, and Rep. Ryan Lane, R-Aztec, are sponsoring House Bill 176 along with Rep. Joshua Hernandez, R-Rio Rancho, and Rep. Bill Rehm, R-Albuquerque.

The bill is known as Renewable Energy Standards & Rate Increases. It was introduced on Jan. 25 and has been referred to the House Energy, Environment and Natural Resources Committee. 

Bill aims to help utility customers during the pandemic

As COVID-19 has caused job losses and business closures, some utility customers have been unable to pay their bills. The PRC has used moratoriums on disconnects to prevent residential customers from losing their natural gas, electric or water service. Now legislators hope to address these challenges with the Utility Relief Act, or House Bill 206, which was introduced on Jan. 28. 

Rep. Kristina Ortez, D-Taos, Rep. Joanne Ferrary, D-Las Cruces, and Rep. Andrea Romero, D-Santa Fe, are sponsoring the bill.

The bill provides guidance for installment payments that will allow customers to pay off their bills over a period of time once the pandemic restrictions have lifted. It also prohibits utilities from disconnecting customers who have entered into an installment payment agreement or who have demonstrated economic hardships. It would also create the utility bill relief program, which would allow low-income residential customers to apply for a temporary credit that will cover half of the unpaid utility bills incurred during the pandemic. If that customer makes the payments in the installment agreement, that credit will become permanent.

It also includes provisions to allow the utility's to recover the lost revenue, including through a rate adjustment.

The bill has been referred to the House Consumer and Public Affairs Committee.

Other legislation

House Joint Resolution 7: Rep. James Strickler, R-Farmington, and Montoya, as well as Rep. Rebecca Dow, R-Truth or Consequences, have introduced a joint resolution that would allow qualifying private schools and parents who homeschool their children to receive public school funding.

House Bill 160: Strickler, Dow and Montoya, as well as Rep. Luis Terrazas, R-Santa Clara, have introduced a bill that would require facilities that perform abortions to adhere to certain COVID-safe practices including limiting capacity, enhanced screening and requiring people from out of state to self quarantine. 

House Bill 208: Rep. Derrick Lente, D-Sandia Pueblo, is seeking to extend the Missing and Murdered Indigenous Women task force for another year and to provide it with $50,000 in funding.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.

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