A David and Goliath Fight to Tap World Class Solar – Episode 14 of Local Energy Rules Podcast

Date: 16 Jan 2014 | posted in: Energy, Energy Self Reliant States, Podcast | 0 Facebooktwitterredditmail

“It’s the most inspirational work that I’m doing…this is an inspirational and aspirational effort…at the heart of it is love of place and energy democracy.”

Citizens of Santa Fe, NM, are exploring the economic and environmental benefits of more local and locally-controlled energy production.  Is their city ready to take the lead?

Find out in this interview with Executive Director Mariel Nanasi of New Energy Economy, recorded via Skype on November 22, 2013.

Mariel Nanasi: The city of Santa Fe exports 10 million to wall street every year in profits. If that money went back into the city’s budget, it could be used for schools or parks or education or whatever the city decided.
John Farrell: This week, we learned how one Southwestern city is trying to keep more of its energy dollars at home. Listen in to hear Mariel Nanasi, executive director of New Energy Economy in Santa Fe, New Mexico, explain how a move to a city owned utility could mean more local solar and more local investment. I’m John Farrell, and this is Local Energy Rules, a podcast sharing powerful stories of successful local energy and exposing the policy and practical barriers to its expansion. Welcome to the program, Mariel.
Mariel Nanasi: Thank you for having me.
John Farrell: I’m really curious about the motivation in Santa Fe to switch from a private electric company to a city owned municipal utility, to public power. Is it reliability, which motivated the switch in Winter Park, Florida, or is it more about clean energy, like in Boulder, Colorado?
Mariel Nanasi: I think that it’s closer to the Boulder, Colorado model. The current incumbent utility in New Mexico is called Public Service Company of New Mexico. PNM is what we call it. And it’s a monopoly that relies on 60% coal, 20% nuclear, and some gas, a little bit of wind, and 1% solar in a state that has the sun as its symbol on its flag. And some people refer to the solar potential in New Mexico as being world class solar. And that it’s the Saudi Arabia of solar and we have not taken advantage of that potential. And I like to say to, to people, you know, I look at my kids and I look at them in their eyes and I don’t say, oh, you have so much potential and leave it at that. I say, I want them to actualize or maximize their potential.

And we have abundant solar and wind resources in New Mexico. And the monopoly, the electric monopoly has failed to take advantage of that. And to our disadvantage and coal is the single greatest driver of climate change, but it also has enormous local health impacts. PNM had 60,000 air quality violations. And they spew into our air, into the commons — which belongs to all of us, not just to PNM — they spew 12 million tons of carbon dioxide and lots of other hazardous pollutants and toxic carcinogens, nitrogen oxides, and sulfur dioxides and mercury. It’s really having an enormous local health impact. I’ll just say this one last thing, we did a study last year. We commissioned a study from the New York University School of Medicine, and it found that PNM had externalized costs of hundred and 40 million in just the last five years in healthcare costs. And that was asthma and hospital visits and lung disease and heart disease. They’re not paying for the waste, but the public is.

John Farrell: So I clearly hear, uh, a strong environmental motivation. Now, what I thought was interesting in reading a bit about your efforts in Santa Fe is that you had almost 2,000 people in the city sign a petition asking the city to look into forming a public power entity, a municipal utility, and this study, which came out last December, is the result of that petition. And, and it says this city could get more than double its renewable energy. It could double energy efficiency, savings, get more local energy, and have lower electric rates. Were you surprised by the results?
Mariel Nanasi: I was encouraged by the results. I think that while it’s true that we want to do this for, for climate change and environmental reasons, I also believe that it has, and this study evidenced that we have the potential to create leading edge innovations in energy efficiency and renewable energy and related economic development. That’s some of what this study showed or interested in, in continuing to stabilize rates, but also, to create competitive advantages and jobs, that would come with a public power effort. So it’s very exciting. The Santa Fe community college is graduating young people with solar certificates and then they’re getting jobs as solar installers and the installers in Santa Fe quadrupled their employment practices and that has real local benefits and those people that are not spending their money on Wall Street, those people are spending their money in Santa Fe and there’s a local multiplier effect that has enormous potential for our area. But also if the money wasn’t going to high executive pay and bonuses and to Wall Street, frankly, the city of Santa Fe exports 10 million to Wall Street every year in profits, if that money went back into the city’s budget, it could be used for schools or parks or education or whatever the city decided.
John Farrell: So between the economic benefits, the opportunities around affordability, local control, it seems like this study is really making this case for public power a very simple one. But nearby in Las Cruces, you know, they failed after a 10 year effort to form a city owned utility in the 1990s. Is that having an impact on the conversation in Santa Fe?
Mariel Nanasi: Yes, but can I say one thing that’s really important and then answer that question? It goes to this, the heart of what you’re asking and that is that PNM used to own the water utility in Santa Fe and the city of Santa Fe bought it 10 years ago. And it is now one of the most respected water utilities in the entire country, mostly for the efforts on conservation and education or education about conservation. And we’ve done amazing work on reducing consumption. It is now profitable for the city of Santa Fe. So we have a local example that highlights our ability to put our values to work here.

But back to your questions, Las Cruces is really interesting. We have had a forum about a month and a half ago. And one of the people who came was the attorney who represented the city of Las Cruces and its bid to supplies or take over the public power. And what happened was everything was on track and they were 30 million short of final deal. And what happened was that El Paso Electric ran a candidate who was opposed to their public power efforts. And then they had to have a vote on the last 30 million as part of the bid and that candidate voted against it. And it literally lost by one vote. Her message to the entire public was this is not about, is it better for Santa Fe? In fact, she said, the answer is clear, sort of like the beginning premise of your question. She said though, political will, and we’ve seen this happen just out in Boulder where Xcel tries another way, uses more money, uses a nonprofit run. New candidates will do all the things that they wanna do because they are fighting for their life. They’re fighting for their business’ life. And so we expect do shady things or will do everything in their power and they will ask their friends at Edison Electric Institute to help them create phony nonprofits and try to pay off people. I mean, this is part of the modus operandi. If you look at the history of efforts to quell public power, and you might, your listeners might know that there was actually a textbook written just about how to defeat public power efforts. So why it failed in Las Cruces is something that we’re looking at, are definitely cognizant of that. PNM is already talking to the mayoral candidates who are running in the next election. So this is part of the power scheme. This is part of the David and Goliath fight.

John Farrell: So what is the next step for the city? You know, you covered, and I have also written about the process in Boulder, which was many years in building before even the first vote to pursue a municipal utility in 2011. And, and like you said, they had to defend against a utility funded effort to set them back here in 2013. What’s the next step in Santa Fe?
Mariel Nanasi: Well, we are, are doing our due diligence and I will leave it at that. Um, but definitely doing research. One of the things I will divulge is that we are working on a, what I’m calling a lessons learned from the municipal utility, the water municipal utility purchase. And we’re gonna be providing that kind of research and to our city counselors and to our county commissioners. And when we launch a public campaign, which we hope to do in 2014, if we have all our research in place, there is always more research to be done. But some of it is about management structures and best practices. We did a best practices piece on Austin, which is one of the best, if not the best green municipal utilities that are out there and learning about what they’ve done and how they’ve gotten there, they set out some standards and they’ve already exceeded their carbon reduction goals.

So what we wanna do is set out what we would like to see in this municipal utility work to make sure that we have all the research done and then push our city counselors and county commissioners to vote. And they have to take a vote to do two things, to agree to work together, which they’ve also done in the past, including a recent one around securing water and creating water durability for Santa Fe. But then also to use their authority on eminent domain to take over both the poles and wires of PNM and also their customer base, a vote will happen eventually within the city council and county commission, but we really have a lot of education and outreach to do in this city. And that’s what we are looking to inform and then elevate.

John Farrell: Well Mariel, I really appreciate you taking the time to talk with me.
Mariel Nanasi: Thank you so much. It’s actually the most inspirational work I’m doing. I think that there’s a real hunger and appetite. There’s sort of like a low-grade fever going on with people’s worry around climate. And this is an inspirational and aspirational effort that really, at the heart of it, is love of place and energy democracy. And that’s why it’s just so, so fun and exciting to be involved in.
John Farrell: That was ILSR Senior Researcher John Farrell speaking with Mariel Nanasi of New Energy Economy in Santa Fe. You can learn more about Edison Electric’s anti municipalization playbook, and about the remarkable results of the study of Santa Fe’s renewable energy potential with the city-owned utility at ilsr.org. Until next time, keep your energy local, and thanks for listening.

 


A Failure to Take Advantage

The incumbent electric monopoly serving Santa Fe, Public Service Company of New Mexico (PNM), gets just 1% of its energy from solar in a state that some call the “Saudi Arabia of solar.” The result is a citizen-driven movement to explore a city-owned utility, and to make the most of the local renewable resource.

Mariel says, “I look at my kids in their eyes.  I don’t say ‘you have so much potential’ and leave it at that.  I want them to maximize their potential….We have abundant solar and wind resources in New Mexico.  The incumbent monopoly has failed to take advantage.”

New Energy Economy commissioned a study to see what would happen if the city, becoming the electric utility, did take advantage of its local resource.  The results are remarkable.

Doubling Efficiency, Doubling Renewables, Cutting Costs

In a study released in December 2012 and benignly titled “Preliminary Economic Feasibility Assessment of a Publicly-Owned Electric Utility for the City of Santa Fe and Santa Fe County,” the city learned that an energy switch to public power could be momentous:

  • It could double savings from energy efficiency from 8% to 20%
  • It could more than double renewable energy production from 20% to 45%
  • It could cut coal’s share of their energy supply from 60% to zero
  • It could increase the percent of local energy fivefold (and possibly much further with local utility-scale solar and city ownership of a combined-cycle natural gas power plant)
  • It could increase customer-sited and -scaled energy from a pittance to over 11%
  • It could cut energy bills by 10-15%

As Mariel says, the study says Santa Fe has “the potential to create leading edge innovations in energy efficiency and renewable energy and related economic development.”

Lessons from Las Cruces: A David and Goliath Fight

Santa Fe has two local examples that will inform their quest for cleaner, more local, public power.

The first is the local water utility, which “highlights our ability to put our values to work.”  The city purchased the water utility from a private monopoly 10 years ago and it is now “one of the most respected water utilities in the country” for its efforts on conservation and furthermore, “It is profitable for the city of Santa Fe.”

The second is a failed attempt to municipalize the electric utility in nearby Las Cruces.  After a 10 year effort, the bid to take over the electric system from El Paso Electric failed by a single vote in the 1990s, after the incumbent corporate utility helped finance the successful campaign of a city council candidate who voted against the last $30 million appropriation necessary to complete the deal.

The lesson from Las Cruces, according to the lawyer that represented the city, is that the question of municipalization is not about which entity is better – that’s self-evident (see the study) – but ‘is there sufficient political will to fight the incumbent monopoly?’

“PNM will do shady things…will do everything in their power…will ask their friends at Edison Electric…create phony nonprofits…try to pay off people…to quash public power,” notes Mariel.  There’s even a corporate utility-written handbook for defeating public power efforts.  (There’s a response, too, from the American Public Power Association called Straight Answers to False Charges Against Public Power).

Already, PNM is already talking to mayoral candidates in Santa Fe in preparation for the political battle.  It is, Mariel says, “Part of the David and Goliath fight.”

What’s Next

New Energy Economy and its partners in Santa Fe are going to spend 2014 “doing our due diligence.”  Their research will focus on the lessons learned from the city’s recent purchase of the water utility, as well as best practices from leading utilities like Austin, TX.

Ultimately, they intend to push their city council and county commissioners to vote on the issue of a public electric utility in 2014.

 

This is the 14th edition of Local Energy Rules, an ILSR podcast with Senior Researcher John Farrell that shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion. Other than his immediate family, the audience is primarily researchers, grassroots organizers, and grasstops policy wonks who want vivid examples of how local renewable energy can power local economies.

It is published twice monthly, on 1st and 3rd Thursday.  Click to subscribe to the podcast: iTunes or RSS/XML

Photo credit: gholmes
Thanks to ILSR intern Jake Rounds for his audio editing of this podcast.
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John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power.