Grid modernization, cost concerns clash in debate on energy overhaul

Yahoo

09-03-2025

Amid a larger energy transition that promises a move away from fossil fuels alongside sharp increases in demand for electricity, Democratic lawmakers have zeroed in on the changes they say are needed for New Mexico's aging grid to handle increased capacity and changing technologies for generating and deploying electricity.
House Bill 13 — or the Power Up New Mexico Act — passed the House on Saturday afternoon after a long debate by a mostly party-line vote of 36-23.
Democrats argue it's an important step to bring the state's energy grid into the future, while Republicans pushed back on the potential costs for customers of the state's three privately owned utilities.
Bill sponsor Rep. Dayan Hochman-Vigil, D-Albuquerque, called it 'the single most important issue I have ever worked on' in a recent committee hearing, arguing the state's grid is among 'the worst in the nation.'
She pointed to the need for grid upgrades in Bernalillo County to accommodate fast chargers for increasing numbers of electric vehicles — including, potentially, electric semi-trucks — and even the need for attention to grids in the Permian Basin to support oil and gas operations.
A host of environmental and clean energy advocacy groups were involved in the creation of HB 13 and strongly support the bill, including the Natural Resources Defense Council, Western Resource Advocates and the Sierra Club. Hochman-Vigil pointed to dozens of other 'stakeholders' who were involved, such as unions, automobile manufacturers and more.
The bill will require the state's three investor-owned utilities to submit plans every three years to state regulators spelling out planned upgrades to their electric distribution systems, aiming to direct focus on building a better grid to handle more demand and to more efficiently connect new businesses and small-scale solar power systems, which put energy into the grid as well.
A similar bill passed last year in Colorado, also with strong support from the Natural Resources Defense Council.
GOP questions costs
Republicans have pushed back on the bill, objecting to possible rate hikes for electricity customers after increases and added charges have already bloated utility bills in recent years.
A request currently pending before regulators would increase average monthly bills for residential Public Service Company of New Mexico customers by about $10 a month.
HB 13 provides for utilities to recover the spending associated with their plans through rate increases or tariff riders, which increase the costs of electric bills with supplemental charges. Such added costs must be approved by the state Public Regulation Commission before they can be implemented.
Rep. Rod Montoya, R-Farmington, said at a recent committee hearing he had spoken with leaders of the utilities and heard 'a lot of concerns' about the bill, which he argued would pile more requirements and costs onto the companies and their customers in the years after the 2019 Energy Transition Act mandated a shift away from fossil fuels in New Mexico.
'Their concern is this is another set of separate expenses that will be passed onto their ratepayers,' Montoya said. 'Current ratepayers are not necessarily the target with this — folks who will benefit the most will be economic development ... but current ratepayers would bear the cost.'
El Paso Electric and Southwestern Public Service Company both expressed support for HB 13 during hearings on the bill. PNM was neutral on it, a spokesperson said, declining to comment.
On the House floor Saturday, Montoya urged all Republicans to vote against the bill, calling it 'an outrageous mandate to utility companies to increase beyond the current need of current customers, and the current customers will have to pay for it.'
All the Republicans who were present voted against the bill, and all of the Democrats — with the exception of Joanne Ferrary, D-Las Cruces — voted for it.
'Forward-thinking' bill
Advocates of HB 13 have said it won't necessarily raise rates but rather that it will ensure utilities make timely, necessary changes to the grid to comply with laws and regulations already in place. They've argued the incentives to move to more efficient appliances and spur economic development could result in lower energy costs.
'Most of this bill is about refining PRC processes and taking away roadblocks that have stopped us from refining our grid,' Hochman-Vigil said. 'Power Up New Mexico is about removing regulatory barriers to do this faster, better and more efficiently.'
Jim Desjardins, executive director of the Renewable Energy Industries Association, said the bill is a 'forward-thinking' measure that will prepare the state for inevitable shifts that are already underway.
'People don't think twice when we talk about investing in our roads,' Desjardins said. 'When was the last time we had an argument about that? People don't like the inconvenience, but it's kind of a similar thing — one moves cars and one moves electricity.'
Part of building a 'modern electric grid' is ensuring energy can efficiently move both ways on distribution lines. Desjardins pointed to roadblocks and delays in recent years in connecting PNM customers' rooftop solar systems — including in some neighborhoods in the Santa Fe area — saying recent new regulatory approaches have required the utility to retool interconnection processes to allow for more rooftop solar systems on some distribution lines.
The larger project of 'grid modernization' includes many other investments, including 'smart meters,' needed to prepare the grid for changing realities of energy use and generation.
'As we look to the future, we've got to be real and look at integrating these technologies and building a better system,' Desjardins said.
Former Public Regulation Commissioner Steve Fischmann expressed support for the bill, comparing the new requirement for distribution plans to the annual integrated resource plans utilities are already required to submit every year, which detail their plans for years to come for new generation resources including solar, wind and battery storage to cover increasing demand.
Fischmann said he sees regulators coming to focus more closely on the bigger picture of distribution investments, which he said have been 'virtually unregulated in the past.'
'They're starting to look at it seriously,' he said. 'And more importantly, they're looking at it holistically. They're trying to put all the pieces together, and there are going to be huge investments in distribution and grid modernization going forward.'
Gas stoves
Some questioned the bill's requirement for 'beneficial electrification' plans from utilities every six years, with approval from the PRC. The plans concern utilities' programs for providing incentives for converting from 'a non-electric fuel source to a high-efficiency electric source' as well as 'avoiding the use of non-electric fuel sources in new construction or industrial applications.'
New Mexico Gas Co. staunchly opposes the provision. A lobbyist for the state's largest natural gas utility argued in a hearing that encouraging customers to move away from gas-powered appliances would hurt their remaining customers, who he said would 'as a result, pay more for that system to be maintained.'
'Are you going to take my gas stove or my water heater?' Rep. Jonathan Henry, R-Artesia, asked during a committee hearing.
Hochman-Vigil said any switches from gas to electric appliances would be 'entirely voluntary.' She said the provision does not pass any new standards or lower the emissions goals already in place in the state, but rather requires the utilities to draft plans that state 'how we are going to get there.'