April 2009
The Legislature Exercises Caution on Key Issues
by Keven Groenewold
New Mexico made progress during the recent Legislature. The budget deficit appears to be manageable, for the moment. As enchantment goes to press on the last day of the 2009 legislative session, the Legislature is methodically grinding through many issues.
The legislative leadership seems to be on speaking terms with one another, and Democrats and Republicans are working together in areas where they have common ground. All in all, this legislative session has been very civil.
The major issues of interest to New Mexico’s electric co-ops deal with energy and the environment. These topics range from simple expansion of a tax incentive for renewable energy to very complex solutions to address global warming. The Legislature, after lengthy debates in committee, has wisely chosen to consider solutions to global warming through the interim committee process after the legislative session is over.
The Legislature, after lengthy debates in committee, has wisely chosen to consider solutions to global warming through the interim committee process after the legislative session is over.
The cost of reducing green house gas (GHG) emissions translates directly in higher monthly electric bills. President Obama’s recently released proposed budget includes a carbon cap-and-trade tax that is projected to raise about $80 billion a year beginning in 2012. The federal budget assumes a starting price of $20 per ton of carbon emissions, an amount that President Obama’s aides say is conservative and would likely rise.
For the average New Mexico residential co-op customer, who uses about 560 kilowatt-hours a month, the $20 per ton carbon tax increases the electric bill by $130 per year. If the tax is increased to $50 per ton, the annual bill increases by $324. For all customer classes served by New Mexico electric co-ops, the total carbon tax revenue generated at $20 per ton is over $60 million per year. At $50 per ton this increases to over $150 million per year.
It is no wonder that with stakes this high, the New Mexico Legislature prudently decided to take more time to study the issue.
The Legislature must consider a myriad of questions. Is a global warming solution at a State of New Mexico level feasible? What would the revenue generated be used for—technology research and development, renewable energy programs, energy efficiency programs, a low income consumer safety net?
Warren Buffett, the world’s most famous investor, described President Obama’s cap-and-trade plan to limit GHG emissions as a “pretty regressive” tax that would hurt the low and middle income Americans that the president sees himself championing, since a larger share of their incomes would go towards paying higher utility bills than would be true for the more affluent.
These issues will be sorted out over time, and when it comes to meeting our state and nation’s energy challenges, not-for-profit, locally owned and governed electric co-ops are offering elected leaders our experience on how to make the right choices on behalf of consumers.
If you haven’t already done so, get involved by asking lawmakers to focus on issues related to generation capacity, new technologies, and keeping electric bills affordable when developing energy and climate change policy. Ask them, “Are you willing to work with electric cooperatives to ensure our state and nation has reliable power at a price consumers can afford?”
Affordable energy is possible if we work together!
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