Trade group study says regional power grid would save New Mexico energy, money
Dec. 6—A new economic impact study from the trade group Advanced Energy Economy estimates New Mexicans could save about $114 million in energy costs with the creation of a regional transmission organization that would encompass much of the western U.S.
The study's findings were based on such an organization controlling an electrical grid and new energy market across 11 western states, including New Mexico, by 2030.
The study also found such a development could create between 4,900 and 18,800 permanent jobs and result in increased tax contributions between $33 million to $116 million annually.
"In some sense, the results here are a lower-bounds estimate," Advanced Energy Economy spokesman Tim Nadreau said Tuesday. "Increased reliability of the grid associated with the [regional transmission organization] have economic benefits as well that aren't captured."
Southwestern Public Service Company — which provides electricity to the southeast corner of New Mexico — belongs to a regional transmission organization, but the rest of the state, serviced largely by Public Service Company of New Mexico, does not.
In PNM's attempts to merge with Connecticut-based company Avangrid, the utility negotiated plans to explore regional transmission organizations.
The merger was rejected by the state Public Regulation Commission in December 2021.
Although regional transmission organizations are established in the northeastern U.S., the Midwest and California, several western states remain disconnected from a larger grid and energy market.
Former Public Regulation Commission member and energy regulation consultant Doug Howe said there have been several unsuccessful attempts to get regional organizations off the ground in the West since the early 2000s.
"Trying to develop [a regional transmission organization] that covers most or all of them requires getting them on board with the design of the market, and they're very different," Howe said, adding energy sources vary — including hydropower, coal, natural gas and, increasingly, solar and wind. "There are large differences in opinions about how a market should be structured — which utilities would be winners and which would be losers."
Overall, a regional transmission organization is created for the purpose of energy efficiency, Howe said, and it helps to dispatch the cheapest energy first, which now is often produced by solar and wind resources.
"One of the issues the utilities — [El Paso Electric] and PNM — and the state itself has to think about from a big-picture, energy-policy point of view is: What is the future of the state?" Howe said. "Many would say the energy future of New Mexico is to be a huge provider of renewable energy for export out of the state."
Current Public Regulation Commission member Cynthia Hall said she was concerned regional transmission organizations may conflict with renewable energy mandates, such as those set forth in New Mexico's Energy Transition Act.
The potential issue, she said, is a state with clean energy standards that belongs to an RTO can buy its energy only from that market. That might not necessarily provide 100 percent clean energy because the power could come from another state with different energy standards.
"There's got to be a mechanism in some way for those trades to occur that will permit those utilities to comply with their state policies," Hall said.
