Clean energy policy is sweeping the states in 2019, with numerous bills setting targets of 100 percent carbon-free electricity by 2050. While these climate-friendly policy proposals have many advocates excited, some utility companies also see them as a golden opportunity.
With advocates laser-focused on climate instead of how renewable energy is deployed and by whom, utility shareholders can win rich rewards by locking in ownership of billions of dollars of new clean energy infrastructure at a hefty price premium to customers.
Mariel Nanasi, executive director of New Energy Economy in New Mexico, joined ILSR’s Director of Energy Democracy, John Farrell, in March 2019, for a new episode of the Local Energy Rules podcast, to discuss the state’s proposed Energy Transition Act and its big giveaways to one of New Mexico’s incumbent monopoly utilities, PNM. The two also discussed the pitfalls of state policy that ignores how rooftop solar and other distributed energy offer huge opportunities to share the wealth of a climate-friendly energy system.
Listen to the episode, and explore highlights and resources including a transcript of the conversation, below.
|Mariel Nanasi:||It’s sort of like a 1% – 99% issue. It’s like — why do we still want to give all the money to the monopoly utility, rather than investing in all sorts of kind of cool, local choice energy situations?|
|John Farrell:||What happens when electric utilities agree to a low carbon future, but at a massive price premium with little opportunity for customers to share the wealth with rooftop solar or community energy?
Mariel Nanasi is Executive Director of New Energy Economy in New Mexico. Her organization has been in the trenches at the legislature, the Public Regulation Commission, and even the State Supreme Court to defend New Mexico customers from the monopoly electric utility’s efforts to line shareholder pockets while sticking it to customers.
She joins me to talk about why we shouldn’t have to buy out incumbent monopolies to get clean energy. I’m John Farrell, Director of the Energy Democracy Initiative at the Institute for Local Self-Reliance, and this Local Energy Rules, a podcast airing powerful stories about local renewable energy.
|John Farrell:||Mariel, welcome to the program.|
|Mariel Nanasi:||Thank you so much for having me John.|
|John Farrell:||So let’s talk about the Energy Transition Act. This Senate Bill 489 in New Mexico. There is so much here to unpack. I think if we were fair we might call it some sort of monopoly protection act in terms of the way that it removes oversight for the PNM, the large incumbent electric utility in New Mexico, under the auspices of advancing clean energy.
There’s so many different pieces here to try to tackle. Why don’t we start with the one about money, because that’s the thing that a lot of people pay attention to. The first thing is, and stuff that has been released by New Energy Economy, it sounds like this is going to be way more expensive than a competitive process for getting the state to clean energy goals.
|Mariel Nanasi:||Yeah. So a couple things, one is that there is some national securitization experts that actually came to New Mexico and … Let me just say very, very, very quickly about what securitization is. Securitization is a Wall Street finance mechanism that essentially turns a deficit on a utility’s books into an asset.
The way that it does that is by selling these sales assets to bondholders, and then the bondholders give the money right up front to the utility, and then rate payers must pay that bond back over a certain period of time. In our case it’s 25 years at essentially a 4% interest rate.
So the deal is is that in our case the bonded amount will probably be around $1.3 billion, which is $400 million more than what it would cost under traditional rate making.
Now when these national securitization experts came they said we’ve done securitization 64 times in the United States and not one of those times has the utility been able to predetermine the amount that it wants, but in this case, in our case, it has done so.
So this is extraordinary and what they called unprecedented, and that’s their word to describe the Energy Transition Act, which is what we’re facing in New Mexico right now in the legislature.
So there is a clean securitization bill that is also going through the legislature, and that one we would support. So if there’s a way to lower the interest rate paid and they are actually insured that there is a benefit, a financial benefit for rate payers for lowering interest rates, we’d be open to that, but this bill does not do that.
|John Farrell:||So Mariel, this is I think super important, because this is a really obscure term that most people might think of the word securitization and draw a blank, and a small fraction might think of it in connection to the 2008 financial crisis, when securitization meant putting together a bunch of crappy mortgages and then giving them an A rating.
Yet there are other places in other states … And you mentioned this, there are ways to do this that can have benefits for the public. I think Colorado actually has a bill right now or some legislation around this very thing. The idea is we take an expensive dirty power plant that is still on the utility’s books and we essentially like refinance it with public money, but at a lower interest rate than we would have to pay back to the utility, and in that case everybody can win.
The utility gets it off its books, they still get some money, but maybe not as much as they would have, and the public saves money because they’re now paying at a lower interest rate. Is that how a clean securitization bill would work for New Mexico?
|Mariel Nanasi:||Yes. The other part of it is that first the commission would determine the amount that the public is liable for, and that’s a critical part. So in our case right now under the Energy Transition Act, one of the big problems with it is that it predetermines how much PNM is quote-unquote entitled to.
But in the PRC, or in the regulatory agency, would determine that after a whole vetting process to see how much should the public be on the hook for to begin with, and that’s one of the main issues. Right now we have the best consumer protection agency that we’ve ever had in New Mexico, so this is an end run around that agency and their oversight and scrutiny.
|John Farrell:||Unfortunately there seems to be variations on the theme. That kind of policy passed in Minnesota about a year and a half ago. A utility ran a power plant through the legislature instead of through the commission probably out of similar concerns.
It sounds like in addition to running around the consumer protection role of the regulator for securitization though, there are other parts of this bill that are running around that normal process in terms of how you would replace that dirty energy with clean energy. Is that right?
|Mariel Nanasi:||Yes, that is absolutely right, and that is another term … Sorry, but it’s about competitive procurement. But let’s just break that down. That means that when a utility wants to obtain new resources, whether it’s specific, like they say we want 50 megawatts or 100 megawatts of solar, or whether it’s more general than that and just we have 100 megawatts and it’s an all resource request for proposals.
So they put out this request for proposals and the utility can compete, as well as independent power producers, in our case Pueblos. So Pueblos could come in and say we want to bid in 100 megawatts and serve Albuquerque or serve Santa Fe or whatever it is, where the load center is.
But PNM of course doesn’t want to compete. They want to enlarge or enhance their monopoly, so not only are they going to get this boatload of money right away, but then they’re going to take that money and then invest it in new resources. And when they put it in those new resources, some of which I think will be not wise, like more gas … But even if they invested in solar, evidence has demonstrated that when PNM owns the resource it is 49% higher than if independent power producer, you know, produced that same amount of energy.
|John Farrell:||That is astounding. Do you have a sense … I know that that study was primarily around PNM, but do you have a sense whether or not that kind of finding would be applicable to other states? There’s 30 states that have this kind of utility structure. Do you think it’s common that the incumbent monopoly has such a higher cost for the power they provide when they own it?|
|Mariel Nanasi:||Well, the thing is is that most utilities get what’s called a return on equity for all their assets. So let’s say there’s a solar plant … This is PNM’s newest brainchild. They not only owned the assets and sold us the electricity, and it was a solar asset, and that’s the one that we just … It’s literally a case that I have pending in the New Mexico Supreme Court.
So PNM rigged a bid so that they could own it, and they ended up owning it and saying that that was the most beneficial for rate payers. The hearing examiner sided with New Energy Economy and denied the resource, but in a slight of hand the then public regulation commission, which was corrupt, overturned her decision even though she was the only one who heard all the evidence and read all the briefs.
Anyway, I don’t want to go into the whole why they were corrupt, but what happened was is that PNM not only makes money on the electricity that it sells us from that 50 megawatt solar facility, but then it gets a 9.575%, which let’s just call it 9.5 … A 9.5% return on the solar panels themselves on the outlet themselves.
Then their newest brainchild was they said well, the land that the solar sits on is also an asset, and we want to get a 9.5% return on the land itself also. So that was another cost that they were going to … That was ultimately approved. That case is on appeal in the New Mexico Supreme Court.
That 50 megawatts was 49% more costly for rate payers than an independent power producer’s 50 megawatts that occurred like four months … There was a four month time span difference, and
And was also approved by the public regulation agency. So, that’s crazy. So at minimum, the utility gets a 10% higher cost, but there is an incentive, a perverse incentive for them to make as much money, because when they charge us more, they make more money.
|John Farrell:||Oh. I feel like this is all just such a breath of fresh air in terms of describing how this system works in a way that for most people is very inaccessible and archaic. One of the other things that was brought up in the documents that New Energy Economy has produced and shared with legislators, and other decision makers around this was also about where the clean energy is going to come from to meet the higher standards. So the bill would, with all of these problems in it, in terms of who’s going to get to own it, require some more renewable energy to be built, or to supply in New Mexico customers. But it sounds like it may not be necessarily built in New Mexico for the economic advantage of the communities there.|
|Mariel Nanasi:||Exactly. So, the one thing that we support in the bill though there’s some issues, is the renewable portfolio standard. And that was thrown in there, that’s the trade that a lot of other environmental organizations made, which is you give us this higher renewable portfolio standard and basically, we will give you lots of money and essentially allow you to own all the replacement power and other things as well.
And that was the trade that was made. And, one of the problems in that trade was that the utilities said, well, we don’t want to have to build all the renewable energy, or buy the renewable energy from customers in New Mexico. We want to for instance, be able to buy RECs, renewable energy credits. So literally, the renewable energy could be built in Colorado, or Arizona, or Texas or anywhere, and then all the utilities have to do is buy the renewable energy credits associated with that actual energy production. But it doesn’t even have to be in New Mexico.
|John Farrell:||All right, we’re going to take a quick break. When we return, we’ll talk about the San Juan coal plant that’s at the heart of this debate. 18th dirtiest emanation. We’ll talk about the alternatives to centralized monopoly provided electricity, and the failure of public oversight to protect the public interest as technology has enabled energy democracy.|
|John Farrell:||Hey, thanks for listening to Local Energy Rules, if you’ve made it this far, you’re obviously a fan and we could use your help for just two minutes, as you’ve probably notices, we don’t have any corporate sponsors or ads for any of our podcasts, the reason is that our mission at ILSR is to reinvigorate democracy by decentralizing economic power. Instead, we rely on you, out listeners, your donations not only underwrite this podcast but also help us produce all of the research and resources that we make available on our website and off of the technical assistance we provide to grassroots organizations.
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Thanks again for listening, now, back to the program.
|John Farrell:||I feel like we’ve covered a lot of the issues with this bill that the fact that it’s a sweetheart deal around securitization in terms of letting the utility decide how much money they would get back.
There’s the sort of predetermination of prudency to use the technical term, but basically saying that the commission, the regulators don’t get a chance to review the cost of these renewable energy systems the utility would build. What’s at the center of this? This is about a big coal plant that is kind of at the heart of this that the utility has owned for a long time. And tell me a little bit more about that.
|Mariel Nanasi:||So, this is one of the dirtiest coal plants in the entire United States. I think I saw a while back, a study that said it was the 18th dirty out of 500 coal plants at the time. So it’s a pretty bad plant, and those toxic stacks are hovering over, not entirely, but mainly Navajo nation, which back in the 60s, the Nixon administration labeled a energy sacrifice zone.
Because there was so much uranium mining and so much coal production there, and they have really borne the brunt of disproportionately of our electricity usage. So it’s spewing there, 300 miles away from Albuquerque and Santa Fe that have some of the cleanest air the country. And you might have heard there is a methane cloud also over that same area in the four corners that they say is the size of the state of Delaware.
So, and the San Juan Mine, the mine associated with San Juan Plants generating station is the second greatest methane emitter in New Mexico. So, it’s a very dirty plant, and people might have heard that there was a new report that just came out a couple of days ago by Earth Justice that talks also about that most of the coal plants in the United States are leaking coal ash into waterways, and that we believe is also happening at the San Juan Generating Station.
So this is a toxic waste dump. And, it’s costing customers right now today, more in electricity than renewable energy because, we have abundant renewable energy resources in New Mexico, and yet PNM and one of the other investor owned utilities, El Paso Electric has very little actual renewable energy in their energy portfolio that produces electricity for us.
And so, this plant has been the target by environmental organizations for 10 years or more to try to close it. And so, we’re really glad that it’s going to be closing. New Energy Economy, the organization that I run fought extraordinarily hard to close it. Back in 2015, PNM took the position that oh, we’ll close half of the plant, but we’ll have the plant continue indefinitely.
And then one year later, they agreed with New Energy Economy and said, you know what, actually it’s not cost effective, you are right and we should close it down in 2022. And so, we’re glad that it’s closing down, we wish it was earlier. If they had in fact closed it earlier, we would’ve given them 100% of their “undepreciated assets”. So that’s like another huge wonky term. And what it means is essentially they have a mortgage, like you have a mortgage on your house and you start paying it on day one and 30th year, you own it outright.
And you know, even if the house costs $350,000, it might ultimately with all the interest really be costing you $800,000 but you’ve had that time, you have that 30 years to pay it off. Well, this plant by 2022 will be a 50 year old plant. You would think we would have paid it all off by then. There is no plant in the United States that has been around for 85 years, but PNM, we believe imprudently had it on their books, literally their financial accounting books as mortgaged out till 2053.
And so they said, well, if we close it in 2022, we still want all the money that we were going to collect from rate payers between 2022 and 2053. Well that’s essentially 31 years and more of collecting from us. But we will have received nothing, zero, not a kilowatt of electricity from that, and yet they want to get the money from us. And so that’s another part of why we would rather have this fight in front of the public regulation commission.
Because we can say, hey, in 2015 you said this plant was cost effective and now you’re saying, no, it’s got to close really soon, but you still want the money. And it would have been one thing if we had paid you back for everything in 2015, but now you extended, and you’ve invested more in the plant, and we don’t want to pay that and that’s unfair.
And there’s a law that is not only New Mexico law, but is pretty standard regulatory law in the country that says when there is some kind of financial burden like this, or like an unexpected boiler breaks or something like that and it’s a lot of money. There is law that says there should be a sharing of the burden between investors and rate payers, which kind of just makes sense.
And then, sometimes that’s just straight up determined as a 50/50 split, and sometimes after a hearing, maybe it’s 70/30, or 20/80 depending on what the situation is. But here again, PNM is going running to the legislature, which by the way, they give a lot of money to those legislators for their election campaigns, and say, hey, just give us 100% without any vetting whatsoever.
And these legislators don’t know what the issues are surrounding this coal plant and all the associated liabilities. And so that’s one of the big problems that we’re having is that in most situations, when the best practice is implemented, it’s after a hearing at the PRC, not before. And so that’s another major problem with SB489.
|John Farrell:||So, I don’t want to cut you off cause there’s so much in this bill that is a problem, but I’m also… also interested in having you talk a little bit about the community’s solar policy that’s also been introduced in the legislature. Both interested in how that policy is going, and what that might do differently as well. Is there else though that we should know about this Energy Transition Act, just as a warning?
I wanted to mention actually, I was going to do his earlier. This bill reminds me a lot of one that has been introduced in Minnesota. It’s under the title Clean Energy First. But I think its full name should be Clean Energy First, Shareholders Second, and Customers Last, because it has the exact same kind of language that you’ve raised as a concern about utilities getting to own all of the replacement energy for the stuff that they shut down, without any competitive bidding. Given the price premium that PNM charges, that seems like that would be similarly problematic.
Is there anything else that we should know about this act?
|Mariel Nanasi:||Yeah. I want to just comment on that, because that’s really beautifully put and succinctly put by you. I think the thing is, we’re at a unique moment in the provision of energy. That is that it used to be that there would be centralized energy. Huge coal plants or gas plants or nuclear plants. Then there would be wires. Those huge transmission lines that transmitted from where it’s produced to what we call the load center. The big cities, essentially.
But now we have a new way. The new way is that we can have distributed energy. Especially in a place like New Mexico. Where we could put up solar next to the biggest cities. Or we could even put wind. But much closer to where actually the load center are. To double down on the old way, which is centralized plants, it’s sort of like, “Yeah, dial up telephones were great compared to calling an operator. But no one who has a cell phone today would ever want to go back to dial up”.
Essentially these bills that double down and increase, enlarge, enhance, exacerbate the utility monopoly structure, cheat us. Cheat the people of lower costs, decentralized energy. The reason why this is so important is because it’s sort of like a one percent, 99 percent issue. It’s like, why do we still want to give all the money to the monopoly utility? Rather than investing in all sorts of kind of cool local choice energy situations. In that way I can just now go into the community solar really quickly. That is a structure, I think that you all have the best community solar bill in the country. We really looked to you for that, and modeled our community solar and I think enhanced it. Even made it even better. If this community solar bill gets passed, it probably will be the best in the country, and hopefully we’ll have a lot of investment in New Mexico to do it.
That is, community solar is essentially what rooftop solar is, except that it’s not on your premise. It aggregates many different subscribers, and those subscribers buy subscriptions to the extent that they need that electricity. But all of the subscribers together can buy solar for cheaper. Our solar bill allows up to 10 megawatts, and that’s particularly good for cities that want to do solar for low income. For businesses. I think that probably the two entities that would benefit the most are low income and businesses. Because those groups are the most sensitive to price volatility and electricity rate increases.
This would be a hedge against rising electric utility rates. It’s gone very well. It’s passed the house. It’s passed its first senate committee. It’s going to its second senate committee this coming Saturday. Then I think it will go to the senate floor. That will be a real benefit to local communities, to businesses, to low income, to cities that want to produce and sell solar itself. Instead of literally sending money to the investor owned utility, which goes ultimately to Wall Street shareholders. That money will stay in the community and will be repurposed.
Especially for pueblos or cities that do this kind of work, then the money that’s generated from the community solar, they will literally have more money to spend on other community needs. Whether that’s healthcare or homelessness or all the other problems that we are facing.
|John Farrell:||Mariel, I just want to thank you so much for talking with me. I wanted to leave you with a chance to just reflect on this Scott Hempling essay that I’ve been sharing around. The title of it is Commissions Are Not Courts, and Regulators Are Not Judges. As you probably know only too well as you are in front of the New Mexico Supreme Court after having a frustrating experience trying to get good outcomes from the regulators there. But what I thought was most interesting about this was the way in which, he has this one sentence in the thing. In his piece. Where he says that, “The scatterplot of private interests appearing in a proceeding”, you know, talking to regulators. “This assumption that they will display some pattern from which the commission, from which regulators can determine the public interest”.
What he’s essentially saying there is that regulators who think they are judges are assuming that everybody who gets to come and participate in those very complex and opaque legal proceedings is sufficient to determine what the public interest is. Even though it’s very difficult, as you well know, to participate in a public utilities commission process. That the parties that are involved have a lot of self interest, and not the public interest.
I don’t know if you have any further thoughts on that, but I just thought that essay was a terrific description of the problem that many commissioners have. Seeing themselves as somehow sitting between the public interest and the private interest, rather than representing the public interest.
|Mariel Nanasi:||Exactly. I read that essay. I think that’s a very keen and nuanced understanding of the situation. Those regulators, in our case it’s called the Public Regulation Commission, and so they’re supposed to be regulating on behalf of the public. I was thinking last night, what really has been sacrificed here in New Mexico is the common good. That’s what we’ve been seeing, and that’s gotten us to this moment of both a climate crisis and a crisis of income inequality.
In order to really step in and make major changes, which we have to do in order to support the people who are really hungry for radical change, is to start investing back into the community. That means taking away, removing the license of these monopolies to run ramshod over our environment, our health, and our economy.
|John Farrell:||I can’t think of any better way to have concluded our conversation, Mariel. Thank-you so much for taking the time, and best of luck in your fight against this terrible bill.|
|Mariel Nanasi:||Thank you so much, John, for everything that you do, and for talking with me today.|
|John Farrell:||This is John Farrell, director of ILSR’s Energy Democracy Initiative. I was speaking with Mariel Nanasi of New Energy Economy about why we shouldn’t have to buy off incumbent monopolies to get clean energy. You can hear two other interviews with Mariel in our Local Energy Rules archive, about her work with the city of Santa Fe to explore local solutions to the utility’s reluctance to embrace affordable renewable energy.
In our 2016 interview with Mariel for example, she notes how poor public oversight of the monopoly resulted in the utility’s earnings rising 461 percent from 2008 to 2014, even though the area’s median household income fell by 6.4 percent. For more information on the battle for energy democracy in New Mexico, sign up for updates from New Energy Economy.
While you’re at our website finding those other interviews with Mariel, you can also find more than 70 past episodes of the Local Energy Rules podcast. Until next time, keep your energy local, and thanks for listening.
A Gold-Plated Low-Carbon System
Mariel Nanasi first picks apart the cost of the proposed Energy Transition Act, noting that the bill’s handout to PNM––which guarantees utility ownership of new clean energy assets––is far more expensive than competitive clean energy options. A recent study showed utility-owned solar power plants cost New Mexico customers nearly 50 percent more than independently-owned generation. The utility’s 9 percent shareholder return on its capital expenses — a common expectation of utility monopolies in 30 states — is mostly to blame for this enormous difference. PNM inflates costs by demanding shareholder return not just on its power plants, but also on the land under them (this proposal is currently pending in front of the New Mexico Supreme Court).
“There’s an incentive, a perverse incentive for them to make as much money because when they charge us more, they make more money,” says Nanasi.
The bill also offers the utility a way to retire its financial ties to old coal plants, a process called “securitization.” The policy works like mortgage refinancing, allowing the utility to get a lower interest rate on its remaining costs and save customers money. Or, that’s how it’s supposed to work. Securitization experts testified that the Energy Transition Act’s favoritism to utility shareholders –– by stripping public regulators of the right to review the amount the utility is reimbursed, among other things –– is “unprecedented.”
Lawmakers don’t have to accept PNM handcuffs proposed in this policy — an alternative public interest securitization bill is also circulating.
All for One And… Just for One
Despite historically high costs, the Energy Transition Act also doubles down on monopoly ownership of power generation, allowing PNM to replace the dirty, refinanced power plants solely with utility-owned generation. In the past, Pueblos or independent power producers have bid in less expensive resources to supply New Mexicans with clean electricity. In the Energy Transition Act, that practice would be prohibited.
New Mexico customers would get their power from PNM at whatever price.
The bill has echoes in other states, like in Minnesota, where the proposed “Clean Energy First” legislation would be more aptly named “Clean Energy and Utility Shareholders First,” leaving independent power producers out in the cold, and customers holding the bag.
The 18th Dirtiest Coal Plant
The Energy Transition Act’s centerpiece is the San Juan coal-fired power plant, built in what former President Nixon called an “energy sacrifice zone” on Navajo land. The power plant holds the title of the 18th dirtiest of 500 coal plants in the country. The adjacent mine that supplies the plant creates a methane cloud the size of Delaware hanging over the Four Corners region. Just four years ago, PNM finally agreed to close half the plant, but shifting economics in the energy sector have made operating San Juan too costly, and now the company wants to close it by 2022.
The catch is an accounting oddity. Despite most coal plants retiring at 50 or 60 years of service, PNM had financed the plant on an 85-year mortgage. The utility company now wants to collect on the remaining payments for two decades after the plant ceases to provide any electricity. As in most states, New Mexico law says that the financial burden of large assets like an expensive power plant should be shared between the utility and customers. Nanasi explains how PNM doesn’t care to share in these costs and is using its political muscle to avoid doing so:
“When there is a financial burden like this or like an unexpected boiler breaks and it’s a lot of money. There’s a law that says there should be a sharing of the burden between investors and customers. Sometimes it’s just straight up determined as a 50-50 split and sometimes after a hearing maybe it’s 70-30 or 20-80, depending on the situation. But here PNM is running to the legislature––by the way, they give a lot of money to those legislators for their election campaigns––and saying ‘hey, just give us 100 percent without any vetting whatsoever.’”
The Moment Calls for Local Choice, Not Monopoly
Nanasi is adamant about the way the proposed legislation undercuts the opportunity of this moment to address climate change by deploying local, clean energy that builds wealth in New Mexico communities.
“Now, we have a new way. The new way is that we can have distributed energy, especially in place like New Mexico, where we can put solar up next to the biggest cities, or we can even put up wind, but much closer to where the load centers are. To double down on the old, old way which is centralized plants. It’s kind of like–yeah, dial up phones were great compared to calling an operators, but no one who has a cell phone today would want to go back to dial up,” she points out.
“These bills that double down and increase, enlarge, enhance, exacerbate the utility monopoly structure cheat us, cheat the people of lower cost, decentralized energy,” says Nanasi. “It’s sort of like a 1 percent – 99 percent issue. Why do we still want to give all the money to the monopoly utility instead of investing in all sorts of cool, local choice energy situations.”
Nanasi went on to describe another piece of pending legislation that would move New Mexico toward “local choice” energy instead –– community solar. Modeled on Minnesota’s nation-leading policy, but improved, this bill would make it easier for the average electricity customer to supply some of their own electricity from solar energy, hedge against rising electricity prices, and enable communities to keep their energy dollars local.
A Call to Regulators to Do Their Job in the Public Interest
While the problems of the Energy Transition Act stem from the utility monopoly having too much power to influence policy, Farrell shares why state officials are also culpable. Drawing on perspective from regulatory expert Scott Hempling, Farrell explains how public regulators are exercising too little power on behalf of the public interest.
The problem is that public regulators too often see themselves as judges deciding between the private interest of utilities and public interest of advocate organizations, forgetting that their charge is instead to represent and defend the public interest, period. Nanasi couldn’t have agreed more, insisting regulators do their job:
“They’re supposed to be regulating on behalf of the public. What’s really been sacrificed here in New Mexico is the common good,” says Nanasi on her state’s utility regulators. “That’s what’s gotten us to this moment of a climate crisis and a crisis of income inequality. In order to make major changes…in order to support the people…means taking away, removing the license of these monopolies to run ramshod over our environment, our health, and our economy.”
For more information on the Energy Transition Act, SB 489, check out coverage by New Energy Economy. For another example of a monopoly utility milking the legislature for resources, check out our commentary on the Becker, Minn., coal plant replacement in 2017 and also John Farrell’s tweet thread on utility monopoly.
This is the 72nd edition of Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell that shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion.
Featured Photo Credit: Curt Smith via Wikimedia Commons (CC by 2.0)