New Mexico
Incentives/Policies for Renewables & Efficiency
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Last DSIRE Review: 12/09/2008
| Incentive Type: |
Renewables Portfolio Standard |
| State: |
New Mexico |
| Eligible Renewable/Other Technologies: |
Solar Thermal Electric,
Photovoltaics,
Landfill Gas,
Wind,
Biomass,
Hydroelectric,
Geothermal Electric,
Zero emission technology with substantial long-term production potential,
Anaerobic Digestion,
Fuel Cells using Renewable Fuels
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| Applicable Sectors: |
Investor-Owned Utility,
Rural Electric Cooperative
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| Standard: | Investor-owned utilities: 20% by 2020;
Rural electric cooperatives: 10% by 2020 |
| Technology Minimum: | For IOUs only in 2020
Solar: 20% of RPS requirement (4% of sales)
Wind: 20% of RPS requirement (4% of sales)
Geothermal, biomass, certain hydro facilities and other renewables: 10% of RPS requirement (2% of sales)
Distributed Renewables: 3% of RPS requirement (0.6% of sales) |
| Credit Trading: | Yes |
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Web Site: |
http://www.nmprc.state.nm.us/renewable.htm
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Authority 1:
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NMAC 17.9.572
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| Date Enacted: | 8/7/2007 |
| Date Effective: | 9/1/2007 |
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Authority 2:
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N.M. Stat. § 62-15-34 et seq.
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| Date Enacted: | 3/5/2007 |
| Date Effective: | 7/1/2007 |
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Authority 3:
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N.M. Stat. § 62-16-1 et seq.
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| Date Enacted: | 3/2004 |
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Summary:
In March 2007, New Mexico passed SB 418, which directs investor-owned utilities to generate 20% of total retail sales to New Mexico customers from renewable energy resources by 2020, with interim standards of 10% by 2011 and 15% by 2015. The bill also establishes a standard for rural electric cooperatives of 10% by 2020 (see below). Furthermore, utilities are to set a goal of at least 5% reduction in total retail sales to New Mexico customers, adjusted for load growth, by January 1, 2020.
Renewable energy is defined as electric energy generated by low- or zero-emissions generation technology with substantial long-term production potential; solar; wind; geothermal; hydropower facilities brought in service after July 1, 2007; fuel cells that are not fossil fueled; and biomass resources, such as agriculture or animal waste, small diameter timber, salt cedar and other phreatophyte or woody vegetation removed from river basins or watersheds in New Mexico, landfill gas and anaerobically digested waste biomass. Renewable energy does not include electric energy generated from fossil fuel or nuclear facilities.
Utilities document compliance with the RPS through the use of renewable-energy certificates (RECs). A REC represents one kilowatt-hour (kWh) of renewable electricity. RECs used for RPS compliance on or after January 1, 2008 must be registered with the Western Renewable Energy Generation Information System (WREGIS). RECs not used for compliance, sold, or otherwise transferred may be carried forward for up to four years.
RPS for Investor-Owned Utilities
In August 2007, the PRC issued an order and rules requiring that investor owned utilities meet the 20% by 2020 target through a "fully diversified renewable energy portfolio" which is defined as a minimum of 20% solar power, 20% wind power, and 10% from either biomass, geothermal energy, hydro brought into service after July 1, 2007, and other renewables starting in 2011. Additionally 1.5% must come from distributed renewables by 2011, rising to 3% in 2015. Distributed resources counted toward the other portfolio requirements cannot also be counted for the distributed requirement. Utilities will be excused from the diversification targets should costs of achieving them raise the cost of electricity by more than 2 percent or if the targets cannot be accomplished without impairing system reliability.
PRC Case No. 04-00253-UT established a two-prong "Reasonable Cost Threshold" (RCT). One component is a cap on the price of resources by technology type, while the second is an overall retail customer rate impact threshold. The technology cost caps were set at $0.049 per kilowatt-hour (kWh) for wind and hydroelectric resources; $0.06254 per kWh for biomass and geothermal resources; $0.15 per kWh for solar projects up to 10 kilowatts (kW) in capacity, and $0.10 per kWh for solar projects greater than 10 kW. The overall retail customer rate impact is capped at one percent (1%) of all customers’ aggregated overall annual electric charges for 2006, increasing by one-fifth percent (0.2%) per year until January 1, 2011, at which time it will be two percent (2%). New Mexico investor-owned utilities must file by September 1, 2007, reports that reflect their positions regarding the RCT and whether the utilities believe the threshold should be changed. The NMPRC then will initiate a proceeding to review the RCT.
The additional cost of the RPS to non-governmental customers who consume more than 10 million kWh per year is also limited so as not to exceed the lower of 1% of that customer's annual electric charges or $49,000. This procurement limit increases by 0.2% or $10,000 per year until January 1, 2011, when it remains fixed at the lower of 2% of the customer's annual electric charges or $99,000. After January 1, 2012, the $99,000 limit is adjusted for inflation by the amount of the cumulative change in the Consumer Price Index, Urban (CPI-U) between January 1, 2011 and January 1 of the procurement plan year.
On July 1 of every year, investor-owned utilities must file a report to the PRC on its procurement and generation of renewable energy during the prior calendar year and submit a procurement plan.
RPS for Rural Electric Cooperatives
In March 2007, SB 418 created a separate renewables portfolio standard for rural electric distribution cooperatives: 5% of retail sales by 2015, increasing 1% per year to reach 10% renewables by 2020. Cooperatives are not required to incur RPS compliance costs that exceed the “reasonable cost threshold”, which is set at 1% of the distribution cooperative’s gross receipts from business transacted in New Mexico for the preceding calendar year.
In addition to the RPS, SB 418 established a “renewable energy and conservation fee” to support programs or projects to promote the use of renewable energy, load management or energy efficiency. Distribution cooperatives may collect from its customers a fee of no more than 1% of the customer’s bill, not to exceed $75,000 annually from any single customer.
Distribution cooperatives must report to the PRC by March 1 of each year on its purchases and generation of renewable energy during the preceding calendar year.
Background
In December 2002, the PRC unanimously approved a renewables portfolio standard (RPS) requiring investor-owned utilities to derive 5% of annual retail sales to New Mexico customers from renewable energy sources by 2006, rising to 10% by 2011. In March of 2004, Senate Bill 43 codified the PRC rules and established additional requirements. New Mexico subsequently doubled its RPS for investor-owned utilities and created a separate standard for rural electric cooperatives in March 2007 (Senate Bill 418).
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