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Executive Summary
As the new home of NMPIRG's environmental work,
Environment New Mexico can be contacted with any questions regarding this report.
New Mexico is at a critical
juncture for its long term energy supply. On the eve of electricity deregulation,
as the demand for power and the negative effects of traditional power production
continue to increase, the state must turn away from polluting energy sources
and increase the use of renewable energy, such as solar and wind power. The
adoption of a renewable portfolio standard (RPS) is the best way to achieve
this goal.
The electric power industry
is one of the most polluting industries in New Mexico and the world. 87% of
the electricity generated in New Mexico comes from dirty, coal-fired power plants.
Coal plants are the largest industrial sources of a variety of pollutants, which
threaten public health and the environment.
- Nationally, one-third
of toxic mercury emissions comes from power plants. In New Mexico, the fish
in 29,000 acres of lakes and streams are contaminated by mercury, which puts
people who eat them at risk of neurological damage.
- Power plants emit one-quarter
of the nitrogen oxide emissions in the state. At ground level, nitrogen oxides
form ozone, or smog, and can trigger asthma attacks.
- In New Mexico, one-third
of sulfur dioxide pollution is emitted by power plants. Sulfur dioxide forms
fine particulate pollution and causes acid rain. Sulfur dioxide and nitrogen
oxides are also the largest contributors to regional haze, which reduces or
blocks visibility in the Grand Canyon and in other nearby parks.
- Power plants are responsible
for one-half of carbon dioxide emissions in New Mexico. Carbon dioxide is
a primary greenhouse gas, which contributes to global warming.
Rather than steering us
away from polluting energy sources, current policies favor coal and gas over
wind and solar power.
- A loophole in the Clean
Air Act exempts 559 of the oldest, dirtiest power plants from meeting current
clean air standards required for new power plants. As a result, the older,
"grandfathered" plants emit up to 10 times more pollution than a new power
plant. New Mexico has six grandfathered power plants.
- Fossil fuels have long
received enormous subsidies, such as the $3 billion Clean Coal Technology
Program for the development of new coal-burning technology, and the $627 million
Coal Research and Development Program. Renewable energy technologies do not
benefit from comparable programs.
- In 1992, wholesale deregulation,
the ability of electricity generators to purchase power from other generating
companies, was passed by the federal government. Since that time, coal generation
across the country has increased 16%.
- Without strict controls,
retail deregulation will also result in increased dependence on dirty power.
Starting in 2001, New Mexico consumers will be able to choose who generates
their electricity. New Mexico power providers will be encouraged to use the
cheapest energy sources available without considering the broader public interest.
A transition toward clean,
renewable energy is entirely feasible and strongly favored by the public.
- Solar panels at currently
available efficiencies on 20% of New Mexico's landmass could replace all the
coal, oil and gas the entire United States uses each year.
- New Mexico has the 12th
largest wind resource in the U.S. Its annual wind potential is estimated at
435 billion kilowatt-hours - twenty-five times the state's annual electricity
consumption of 17 billion kilowatt-hours.
- A 1998 poll found that
87% of New Mexicans cared a lot or a fair amount how their electricity is
generated. By a margin of 4 to 1, respondents preferred a mandatory fee of
an average of $1.40 per month to promote renewable energy.
Contrary to common perceptions,
renewable energy is affordable and reliable.
- Wind energy is currently
selling for approximately 4 cents/kilowatt-hour, on par with more traditional
fuels such as coal and nuclear.
- Over the past three years,
solar prices have dropped from around 50 cents/kilowatt-hour to about 20 cents/kilowatt-hour,
varying slightly depending on the technology. Most solar technologies are
expected to drop to below 10 cents/kilowatt-hour by 2010.
- New wind plants churn
out power 95% of the day. A recent study by the National Renewable Energy
Laboratory concluded that intermittent generation levels of at least 10% of
total energy generation can be accommodated with no adverse system impacts.
Solar facilities are durable and efficient, and require very little ongoing
maintenance.
New Mexico policy makers
now have the opportunity to address environmental and public health concerns
associated with dirty power production by adopting a Renewable Portfolio Standard
(RPS). This would require all electric utilities to provide a minimum percentage
of their energy from renewable energy sources.
- An RPS is needed, as
New Mexico's deregulation law did very little to promote renewable energy.
The only provision in the new law that directly stimulates renewable energy
production is a small fund to construct renewable energy facilities at schools
and government buildings.
- Proposals for an RPS
for New Mexico already have momentum. The 1999 deregulation law ordered the
Public Regulation Commission to examine the advisability and desirability
of an RPS.
- RPS's are being proven
effective elsewhere. Eleven other states have already adopted RPS's to promote
renewable energy in deregulated markets.
- An RPS makes good economic
sense. A study analyzing a 20% RPS predicted rates to fall 13 percent over
the next twenty years, with an average savings of $5.90 per month. In Florida,
a study for the DOE found that solar power would add 99 jobs per megawatt
of additional capacity, versus 5 jobs for gas and 10 jobs for oil or coal
plants.
Several new policies are
needed to compensate for an unequal playing field for renewable energy in New
Mexico as the industry is deregulated. The following sensible, achievable steps
should be taken immediately:
- Increase renewable energy
through adoption of a Renewable Portfolio Standard of 5% by 2005, increasing
to 20% by 2020.
- Require utilities to
provide information on customers' bills on energy sources and their environmental
impacts.
- Increase energy efficiency
by updating energy efficiency codes for buildings and appliances.
- Require all power plants
to meet the same emission standards, rather than exempting the worst plants.
- Eliminate subsidies for
energy production from polluting sources.
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