Making good on a campaign promise, New Mexico Gov. Michelle Lujan Grisham on Friday signed landmark legislation that will mandate more solar panels and wind turbines as the state sets ambitious new renewable energy goals.
The Democratic governor, environmentalists and others gathered at the state capitol for a signing ceremony.
The measure requires that investor-owned utilities and rural electric cooperatives get at least half of their electricity from renewable sources by 2030. That would jump to 80 percent by 2040.
A 100 percent carbon-free mandate would kick in five years later for utilities. Electric co-ops would have until 2050 to meet that goal.
Lujan Grisham, who took office in January, said the legislation resulted from a year of negotiations that brought together utilities, unions and environmental advocates.
“The Energy Transition Act fundamentally changes the dynamic in New Mexico,” she said in a statement. “This legislation is a promise to future generations of New Mexicans, who will benefit from both a cleaner environment and a more robust energy economy.”
Aside from the renewable energy quotas, funds will be established to help ease the economic pains of closing the coal-fired San Juan Generating Station near Farmington.
Critics described the legislation as a boon for Public Service Co. of New Mexico, which operates the power plant. Language in the law will allow Public Service Co. of New Mexico and other owners of the San Juan to recover investments in the plant by selling bonds that are later paid off by utility customers.
The utility plans to shutter the plant in 2022 as part of its plans to divest coal-fired generation.
Regulatory and market pressures have pushed many utilities across the U.S. to move away from fossil fuels. PNM is no exception, and utility executives have said that despite the new law, they already were on a path that would boost the percentage of renewable and carbon-free energy sources within their portfolio.
“PNM is fully aware of the challenges this legislation places squarely on our company, but we know there is no better place than New Mexico to grow the renewable energy economy,” said Pat Vincent-Collawn, PNM Resources’ president and chief executive.
She said the company will be taking the challenge head on and will work to balance “this new path forward” with the needs of its workers and customers.
The company touted its current portfolio, saying existing wind, solar and geothermal resources annually generate enough electricity to power more than 154,000 average homes.
The company also said customers will realize savings in their bills through the refinancing of bonds related to the San Juan plant and the production of more electricity from renewable sources.
State energy secretary Sarah Cottrell Propst described the new law — with its new quotes, financing mechanism for retiring coal plants and community assistance programs — as the strongest package of its kind in the U.S.
Governors in Wisconsin and Colorado have campaigned on renewable energy, while legislation calling for higher renewable energy quotas was introduced in Illinois and Minnesota. In Washington state, Gov. Jay Inslee has pushed legislation aimed at eliminating fossil fuels like natural gas and coal from his state’s electricity supply by 2045.