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Green is Gold


New Mexico Mandates Renewable Utilities

August 9th 2007

Energy / Environment - OK Turbine

Among America’s leading energy producers in the 20th century, New Mexico now is poised to become a powerhouse in the rapidly evolving clean-energy economy of the 21st century. A new law taking effect next month promises to help New Mexicans quite literally tower over the competition as states scramble to cash in on the burgeoning market for cleaner and more predictably priced power.

The state has enacted a combination of innovative tax incentives and ambitious standards designed to make the most of New Mexico’s abundant renewable energy resources— wind, solar and biomass— and encourage new ways to make traditional energy sources cleaner and reduce the amount of climate-changing greenhouse gases they produce.

Tax credits make investment in commercial-scale renewable energy technologies more attractive. Stronger “Renewable Portfolio Standards” embraced by the Legislature— requiring major utilities to produce 15 percent of their power from renewable resources by 2015 and 20 percent by 2020— make those investments necessary.

Yet it does little good to develop cleaner sources of energy if we can’t get the power to consumers. That’s where the new state law, the Renewable Energy Transmission Authority Act, comes in. RETA is a groundbreaking approach to the most mundane, but essential, part of the new energy economy. RETA is the nation’s first state-level financing authority dedicated to developing the towers, lines and other infrastructure needed to carry renewable derived electricity to waiting markets. RETA will work in-state and coordinate with regional authorities to help New Mexicans accelerate renewable energy development by making sure the clean energy we produce finds its way to paying customers here and elsewhere.

RETA’s mandate is to plan, finance, build and operate new electricity transmission lines for power that’s at least 30 percent from renewable sources. The act also includes authority to develop energy-storage projects, such as compressed-air storage for wind power, to make the greatest possible use of New Mexico’s power-producing potential. The projects RETA undertakes will be exempt from state gross receipt and compensating taxes.

An eight-member board will govern RETA and be vested with the authority to issue revenue bonds to finance transmission projects. Those debts and RETA’s administrative costs will be repaid with the fees utilities and energy-producing companies pay to use the lines.

RETA can help ensure that New Mexicans enjoy access to environmentally responsible power at predictable prices. But it can do far more. Central to its mission is an emphasis on transmission that lets energy producers in New Mexico plug into the growing demand for clean energy in surrounding states. Prodded by environmentally conscious consumers and facing economic uncertainty posed by volatile fossil fuel prices, California, Arizona, Colorado and other states are setting their own Renewable Portfolio Standards. As New Mexico has, other states are beginning to demand more energy from renewable sources— the kind of sources New Mexico has in abundance.

Demand for renewable power in surrounding states makes RETA a powerful tool for economic growth, especially in rural areas. By improving the ability to carry renewable energy to consumers in large, lucrative markets elsewhere RETA will make wind, solar and biomass projects more attractive to investors. As it delivers electricity elsewhere, RETA can help deliver to New Mexico more capital investment, many more high-paying jobs and greater economic opportunity for rural communities, where wind, solar and biomass potential is greatest.

The federal government, historically, has taken the lead on electricity-transmission issues. But the states, particularly in our region, are the ones driving the development of renewable energy. States throughout the Rocky Mountain West see and are working to seize the great opportunities available in the new energy economy.

As the new, clean-energy economy develops, New Mexico is competing with other states for a slice of the pie. Renewable energy standards in place in some states and sure to follow in others represent tens of thousands of megawatts of potential electricity demand over the next decade.

New Mexico has the ability to generate and sell significantly more clean energy to meet that demand and generate greater economic prosperity in the process. RETA will help New Mexicans plug into that prosperity and extend the state’s standing as a national leader in energy resources and development for decades to come.

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