The Local Choice Energy Bill (SB165) is so promising for New Mexicans that investor-owned utilities are sending misleading letters to encourage opposition.
“I never imagined that PNM could tout such egregious, easily disproven lies,” said Alysha Shaw of Public Power New Mexico. “Clearly, they are scared of introducing any competition into the market. If other states are an indication, local choice providers can coexist and collaborate with investor-owned utilities.”
What’s the fuss about? The LCE Act, sponsored by Sen. Carrie Hamblen, would empower towns, counties, and tribes to create a new public electricity provider designed to lower customers’ costs and expedite transitions to renewable energy. Existing utilities would still own their grids, but transmit the local provider’s electricity, charging its normal rates. If our county started an LCE, you could choose to stay with El Paso Electric or switch.
LCEs (or CCAs, for Community Choice Aggregation) already serve millions of customers in 1300 local jurisdictions in ten states. Although some states legalized LCEs too recently to generate much of a track record, the facts don’t seem to support the mud PNM is throwing.
In the U.S. Environmental Protection Agency’s “Advantages and Challenges of CCAs” list, the EPA cites as advantages: potentially reduces rates, enables a faster shift to greener power, greater responsiveness to local economic and environmental goals, and possible spurring of local jobs and renewable energy development. Revenues are invested back into the community, not sent to investors elsewhere.
EPA lists as challenges: the need for enabling state legislation (which SB165 would be); “successful navigation of various CCA regulations and passing appropriate ordinance;” administrative costs; possible customer confusion about opt-in and opt-out clauses; and “potential for push-back from utilities in traditionally regulated electricity states that would face new competition under CCAs.” Indeed, our biggest challenge is that PNM and EPE might get mad at us.
PNM says local choice energy would empower unregulated out-of-state energy brokers, thus increasing costs to customers. The Agency says LCEs/CCAs can reduce costs as much as 15-20%. Further, a recent university study found that 80% of Massachusetts CCAs offer lower rates than area utilities. (For one thing, you’re not paying extra to keep private investors happy.)
PNM says local choice can’t work because solar battery storage doesn’t have the capacity to store enough power to meet peak demand between 5-9 p.m., resulting in energy shortages. But the EPA hasn’t noticed that. New Hampshire, New York, and Rhode Island all receive less sunshine and experience shorter winter days than we do. If CCAs work there, I’ll bet on ‘em here. (I understand that shortages haven’t occurred elsewhere.)
Worse, PNM says that it’s done such a great job moving to carbon-free energy that letting local agencies try to do better “would hurt the good progress we’ve made.” That doesn’t even make sense! Again, the EPA and ten states with local choice haven’t reported experiencing that.
PNM also warns that local choice providers wouldn’t be subject to PRC oversight; but SB165 would require PRC advance approval of LCEs’ detailed implementation plans.
This legislation looks appropriate. (PNM hasn’t shown otherwise.) However, considerations include whether cities ceasing to be utility customers would increase rates for remaining customers, and whether customers should have to “opt in” or “opt out.” But there aren’t deal-breakers.
Thursday, SB165 passed the Senate Conservation Committee 6-2. Sen. Joe Cervantes voted for it. The bill next heads to the Judiciary Committee, which Cervantes chairs.
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