1. Overview 2
2. Definitions
of New Policy-Based Incentives. 4
3. Status
of Renewable Energy Incentives in New Mexico. 6
4. At-a-Glance
Summary of all Renewable Energy Incentives in
New Mexico
and Neighboring States 8
5. Renewable
Portfolio Standards in Arizona, Nevada, and Texas 9
6. Green
Pricing Programs in NM and Bordering States 11
7. Rebate
Programs for Renewable Energy. 16
8. Tax
Credit Incentives. 17
9. Loan
Programs. 18
10. New
Mexico’s Wind Resource. 18
11. New
Mexico’s Solar Resource potential 18
12. Some
Renewable Energy Policy Organizations in New Mexico 19
With the
exception of Oklahoma, New Mexico is suddenly finding itself surrounded by
neighboring states with aggressive policies and incentives for both utility and
residential scale renewable energy development. Some of these incentives,
mostly financial, have been in place since the late eighties or early nineties.
More recently, very strong and relatively new types of incentives, in
particular something called “portfolio standards” have been implemented. This
has already led to hundreds of megawatts (a megawatt is enough to
power roughly 1000 homes) of renewable electricity generation and is likely to
lead to thousands of new megawatts of renewables by the end of the
decade. Thus, the long predicted explosion in renewable energy technology is
now finally underway.
Note: Most
of the information on neighboring states quoted in this document was derived
from the Database of State Incentives for Renewable Energy (DSIRE), which can
be accessed online at http://www.dsireusa.org.
Comprehensive information about state incentives can be found there, including
links to relevant websites and names and information on contacts.
The
incentives mostly responsible for the existing utility-scale generation
in neighboring states are:
1. The
Renewable Portfolio Standard (RPS) adopted by Texas, which essentially
mandates the addition of renewables to the mix in significant percentages, and
2. Voluntary
Green pricing programs in Colorado and Texas, which rely on consumer demand
and were initiated with the help of aggressive consumer recruitment campaigns.
In Colorado, some of these campaigns were conducted by a nonprofit
environmental group called the Land and Water (LAW) Fund of the Rockies, who
worked with the utilities outside the of official regulatory process.
Both
of these types of incentives are expected to elicit similar progress in Arizona
and Nevada over the next year or two, and could easily do so if implemented in
New Mexico because New Mexico has the necessary resources in spades.
In
addition to policy-based incentives, a whole range of financial incentives,
including rebates and tax incentives, are also in place in states bordering New
Mexico. These are extremely important for the successful development of
residential scale renewable energy businesses, as well as utility scale
generation.
New
Mexico, lags significantly behind her neighbors. New Mexico’s
deregulation legislation did mandate a systems benefit fund (see below), and
made a weak recommendation that the PRC investigate the possibility of
renewable portfolio standards. On this basis, the PRC promulgated a portfolio
standard rule (see below). Following the deregulation disaster in California,
the legislature has delayed the implementation time for electricity
deregulation by five years, and this delay applies to both the systems benefit
fund and the portfolio standard as well.
Moreover,
despite some preliminary attempts in the last legislative session by some
legislators to introduce bills to remedy this situation, financial incentives
for renewable energy generation in New Mexico are simply nonexistent.
The
Solar Industry of New Mexico needs, and deserves, aggressive and effective
legislative action to promote renewable energy development now. The
solar industry of New Mexico stands to suffer great harm if action is not taken
soon, for the following reasons:
·
Businesses tend to grow exponentially, because their
growth rate is proportional to their income. Incentives in other states are now
giving a major boost to their companies: It follows that New Mexico solar
energy businesses will be hopelessly out-paced by their out-of-state
competitors.
·
Out-of-state companies are gaining an increasing share
of renewable energy sales in New Mexico right now, particularly through online
sales exempt from gross receipts tax. We need incentives such as a gross
receipts tax exemption to keep New Mexico solar businesses competitive.
Finally,
New Mexico needs good incentives for renewable energy generation as her
electricity infrastructure will be growing substantially in coming years, i.e.
new power lines, new distribution hardware, new power plants. Now is the time
to promote renewable energy development, instead of simply maintaining New
Mexico’s old pattern of total reliance on non renewable and non distributed
energy sources. Future infrastructure
development can then proceed in environmentally friendly and economically
beneficial ways,
In addition to conventional
incentives, such as tax incentives, several new policy mechanisms have emerged
in the 1990’s to foster renewable energy. These have emerged mostly in the
context of electricity generation, to promote adequate competition and customer
choice. These are:
- Renewables Portfolio Standards
(RPS): These are requirements that mandate utilities to add
certain specified percentages of renewable energy to their mix. This is in
response to overwhelming consumer interest in renewable energy.
Characteristic features include:
- Percentages typically range anywhere
from a fraction of a percent up to several tens of percents.
- A timetable is sometimes established
for the gradual phasing in of renewable energy.
- In some cases utilities are mandated
to actually build the renewable energy generation themselves. In other
cases, they have the option to purchase renewable energy from a wholesale
supplier or to purchase renewable energy certificates. If the latter
option is used, the renewable energy does not necessarily flow to the
customer, but the customer is guaranteed that their rates are supporting
renewable energy generation somewhere.
- Penalties are usually established
for utilities who lag behind, and sometimes special credits are awarded
to utilities that meet targets ahead of time.
- For many utilities, the cost of
building new generation is simply the cost of doing business – this is
possible because the amount of new renewable energy generation is still a
small fraction of their total generation. In other cases, the cost of
building new generation is paid for through an extra tariff on
electricity bills, which may be associated with a public benefits fund
(see below), or a green pricing program.
So far, renewables
portfolio standards have been implemented at the state level only, although
proponents have been lobbying for a number of years for a federal RPS.
- Green Pricing Programs: These
are programs in which utilities file tariffs (request permission to charge
particular rates) for green power and then market and provide green power
to customers who request it. Characteristics include:
- These programs may be voluntary for
utilities, or utilities may be mandated to offer these programs.
- Programs may involve both utility
scale and/or residential scale systems.
- Nonprofit advocacy groups sometimes
play a role in promoting these programs, and in signing up customers.
Green pricing
programs have been enormously successful (see below), because consumers are
truly interested in them.
- Renewable Energy Certificates:
These are certificates which certify that given amounts of renewable
electricity have been generated and transmitted to customers.
Characteristics are:
- In some states utilitie purchase
these to satisfy their renewable portfolio standard requirements (Texas
and Arizona).
- In some states (Texas) certificates
are issued by a third party state agency, in others, the use of
certificates is more informal and carried out by the utilities themselves
(Arizona).
- Public (or Systems) Benefit Funds: These
funds are generated by imposing an extra tariff on consumer’s electric
bills. They are then used for a variety of purposes, such funding
renewable energy demonstration projects; building of large scale renewable
energy generation for RPS requirements; funding rebate programs for small
scale solar systems; transmission line upgrades; studies of how best to
upgrade the system; consumer education; and other similar purposes. The
inspiration for these is the idea that under a deregulated electricity
market, where competitive power suppliers can sell onto the open market
and not necessarily to local customers, these suppliers will not have an
sufficient incentive to make system improvements.
- Disclosure Requirements: These
require all electricity generators who are selling electricity into a
deregulated (competitive) market to disclose to potential customers the
content of their mix according to generation source or sources, emissions,
and possibly even environmental and health impacts. This is essentially
just product labeling.
- Net-Metering: Net-Metering
rules allow consumers to use their own on-site renewable energy generation
to run their electricity meters backwards, i.e. generate a credit that can
be used to offset their use of grid power.
- Renewable Portfolio
Standard (RPS): In 1998, the New Mexico Legislation passed electricity
deregulation legislation that recommended that the Public
Regulatory Commission (PRC) examine the possibility of an RPS for
New Mexico. On this basis, the PRC developed an RPS Rule that would
mandate the inclusion of some renewable electricity. This rule applies
only to what is called the `standard offer service’. Standard offer
service means the electricity service package that customers who do not
opt to choose a specific provider would receive by default. Note that this
RPS Rule will only go into effect if and when electricity deregulation
goes into effect in New Mexico. Originally, New Mexico was scheduled to
deregulate in January 2000. This was delayed, by the PRC until 2001, and
then the New Mexico Legislature recently further delayed the onset of
deregulation until 2007 (SB266).
Initially,
the PRC proposed a rule that simply required that a minimum of 5% of renewable
electricity. The Attorney General and others, however, complained that this did
not adequately protect consumers from possible increased rates that could occur
if the renewable energy available was of very high price.
The
Coalition for Clean Affordable Energy (CCAE), of which NMSEA is a member
organization, agreed that cost should be an issue, and recommended that a price
cap of $.003 (“three mils”) per kilowatt-hour (kwh), on average, be imposed.
For an average consumer who uses 500 kwh per month, this would cap the increase
in monthly bills at 500 times $.003 = $1.50.
The
PRC settled instead on a cap of $.001 (“one mil”) per kwh. For an average
consumer who uses 500 kwh per month, this would cap the increase in monthly
bills at 500 times $.001 = $.50.
Thus,
in summary, the final RPS rule promulgated by the PRC mandated that the
utilities would have add a percentage up to 5% renewable energy as long as the
average bill would not be increased beyond one mil per kwh, or roughly $.50 per
month per residential customer.
It
is interesting to ask how much renewable energy could actually be supported
with this cap. Assume for the moment that wind power costs an extra two
cents per kwh wholesale, which is reasonable if we assume that wind power costs
5 cents per kwh wholesale, a realistic figure these days, and also that coal
fired electricity costs 3 cents per kwh, which is roughly what PNM has reported
as their cost in recent years. Then each consumer who pays an extra $.50
per month can in principle purchase $.50/$.02 = 25 kwh of wind power each
month. Since the average consumer in New Mexico uses about 500 kwh per month,
so this represents 25/500 = .05 = 5% of the total amount of power they consume.
Note that this percentage is actually in line with the target set by the RPS!
This
suggests that the RPS standard issued by the PRC might be at least marginally
effective. Since New Mexico’s entire electricity load is approximately 1.9
Gigawatts (average – according to 1998 usage statisitics), then the maximum
amount of wind power that could be supported
would be about .05 x 1.9 = .095
Gigawatts or 95 megawatts. Because utility-scale wind turbines are
approximately 1 megawatt, and because they can produce power about 1/4 of the
time, this is equivalent to about 380 turbines. The installation of 380
turbines in New Mexico would be a significant event! In practice, this estimate
is probably very optimistic – a price cap of $1.00-$2.00 per month instead if
$.50 would probably stand a much better chance of actually getting new
generation installed, especially at the start.
- Systems Benefit Fund
(SBF): The 1998 Legislation also mandated the creation of a systems
benefit fund to go into effect when deregulation starts. The SBF moneys
would be gathered from a $.0003 (three tenths of a mil) per kwh added to
all customer bills. This amount would be increased after five years to six
tenths of a mil. During its initial period at 3 tenths of mil, the fund
has been estimated to accumulate about $6 million a year. The fund would
be divided up and used for the following purposes:
- No more than $100,000
annually to the Environment Department to administer the fund.
- $500,000 annually to
the PRC to for consumer education purposes
- No less than $500,000
for low income energy assistance programs
- Not more than $4
million for renewable energy projects proposed by schools, cities, towns,
villages, counties or tribes.
The
Environment Department has already conducted a series of stakeholder meetings
and has drafted a procedure for the evaluation of renewable energy project
proposals. NMSEA and CCAE, among others, participated in these meetings. Of
course, the SBF cannot be implemented as things currently stand until New
Mexico proceeds with electricity deregulation.
- Disclosure
Requirement: The 1998 New Mexico deregulation legislation did suggest
that competitive power suppliers disclosure their generation sources and
emissions to potential customers, so as to give them adequate information
to make informed choices. The PRC did begin rulemaking proceedings, and
proposed a rule that would also inform consumers of CO2 and mercury
emissions as well as regulated pollutants such as SOX and NOX, and
potential health and environmental impacts as well. Inclusion of
these additional elements were challenged, by the Western Fuels Association
among others, on the basis that CO2 and mercury are not regulated and that
environmental and health impacts are incompletely and inconclusively
known. CCAE argued that these elements should be included. No final ruling
on disclosure has been made by the PRC to date.
- Net-Metering:
New Mexico does have a net-metering rule on the books which is pretty good
for residential scale PV systems. It has a cap of 10 kilowatts per
customer, which severely limits large scale systems- the Indian Pueblo
Cultural Center, for example, probably would have installed a 5 kw system
if allowed under the rule. In any case, this rule is probably the best
incentive New Mexico has to date.
- Financial
Incentives: Finally, as noted previously, there are basically no
financial incentives for renewable energy in New Mexico whatsoever.
- Green Power
Programs: Southwest Public Service has a small green power program in
eastern New Mexico involving one wind turbine (with one more on the way).
See the description in the section below on green power programs.
- Education, Outreach,
Etc: There are a number of organizations dedicated to promoting
renewable energy development in New Mexico. See the section below for
descriptions of some of these groups.
The following table summarizes the incentives in
neighboring states, as obtained from the Database of State Incentives for
Renewable Energy (DSIRE), which can be accessed online at http://www.dsireusa.org.
|
Incentive
|
Arizona
|
Neveda
|
Colorado
|
Oklahoma
|
Texas
|
New Mexico
|
|
Public Benefit Fund
|
|
|
|
|
|
1-S (delayed)
|
|
Generation Disclosure
|
1-S
|
1-S
|
|
|
1-S
|
1-S (delayed)
|
|
Portfolio Standard
|
1-S
|
1-S
|
|
|
1-S
|
1-S (delayed)
|
|
Net-Metering
|
1-S
|
1-S
|
1-S,2-L
|
1-S
|
1-S, 1-L
|
1-S
|
|
Line Extension Analysis
|
1-S
|
|
1-S
|
|
1-S
|
1-S
|
|
Solar Contractor Licensing
|
1-S
|
1-S
|
1-L
|
|
|
|
|
Renewable Enegy Equipment
Certfification
|
1-S
|
|
2-L
|
1-S
|
1-S
|
|
|
Solar & Wind Access Laws
|
1-S
|
1-S
|
1-S,1-L
|
|
|
1-S
|
|
Construction and Design Policies
|
1-S, 2-L
|
|
1-S,3-L
|
|
1-S,1-L
|
|
|
Green Power Programs
|
|
|
|
|
|
|
|
Green Pricing
|
4-U
|
1-U
|
3-U,6-L
|
|
3-U, 3-L
|
1-U
|
|
Green Power
Purchasing/Aggregating
|
1-L
|
|
3-L
|
|
|
|
|
Public Education/Assistance
|
2-L
|
|
3-L
|
|
2-L
|
1-L, 1-S
|
|
Demonstration Projects
|
2-L
|
|
2-L
|
|
2-L
|
2-L
|
|
Research and Outreach
|
|
|
|
|
|
1-S
|
|
Personal Tax
|
2-S
|
|
|
|
|
|
|
Corporate Tax
|
|
|
|
|
1-S
|
|
|
Sales Tax
|
1-S
|
|
|
|
|
|
|
Property Tax
|
|
1-S
|
|
|
1-S
|
|
|
Rebates
|
1-L
|
1-L
|
1-S
|
|
1-L
|
|
|
Grants
|
|
|
|
|
|
|
|
Loans
|
1-S
|
|
|
|
1-L
|
|
|
Industry Recruiting
|
|
1-S
|
|
|
1-S
|
|
|
Leasing Programs
|
1-U
|
|
|
|
1-U
|
|
|
Equipment Sales
|
|
|
|
|
1-U
|
|
Key: S-State, L-local, U-utility
Note that New Mexico has only a
few listings, and is conspicuously lacking in both conventional financial
incentives such as tax incentives, and strong policy incentives such as
renewable portfolio standards and systems benefit (except for, as described
above, some of these would be provided for to some extent if New Mexico’s
deregulation legislation were to put into effect).
The following table compares the
renewable portfolio standards of states bordering New Mexico in more detail.
This data was compiled from the dsire databased referenced above and from more
detailed information published online by the various public utility commissions
and legislatures involved.
Provisions
|
Arizona
|
Nevada
|
Texas
|
|
Total Amount Mandated by
percent
|
1.1%
|
15%
|
(about 3.3%)
|
|
Total Amount Mandated in
megawatts
|
(about 180 MW)
|
|
2000 MW
|
|
Effective Date
|
3/30/01
|
1/1/03
|
1/1/02
|
|
Target Date for Total Amount
|
2009
|
2013
|
2009
|
|
Trading Credits Program
|
Yes
|
Yes
|
Yes: Adminstered by state
|
|
Eligible Technologies
|
Solar Thermal Electricity,
Photovoltaics, Wind, Biomass, Hydro, Geothermal Electric, Waste,
|
Solar Thermal Electricity,
Photovoltaics, Wind, Biomass, Geothermal Electric
|
Solar Thermal Electricity,
Photovoltaics, Wind, Biomass, Hydro, Geothermal Electric, Wave, Tidal,
Landfill Gas
|
|
Applicable Sectors
|
Utility, Investor-Owned
Utility, Publicly-Owned Utility, Rural Cooperative,
|
Utility, Investor-Owned
Utility, Publicly-Owned Utility,
|
Utility
|
|
Initial Minimum
|
0.2%
|
|
400 MW
|
|
Year Enacted
|
2000
|
2001
|
1999
|
|
Existing Renewables
|
|
|
880 MW
|
|
Penalties
|
Yes
|
Yes-administrative fines
|
lesser of $50 per MWh or 200% of the average cost of
credits traded during the year
|
|
Minimum required amount of
solar
|
solar must make up 50% in 2001, increasing to 60% for 2004 through
2012
|
Solar must be 0.5% of total
electricity delivered, to be achieved beginning 2004 by adding at least .01%
annually
|
Solar must make up at least 5%
of the renewable energy generated
|
|
Funding for building of new
generation
|
Funding from existing system benefits charges and a new surcharge to
be collected by the state’s regulated utilities.
|
Cost of doing business
|
Cost of doing business
|
Note that although Arizona’s program has
roughly a factor of ten times smaller target in terms of total number of
megawatts, most of Arizona’s renewable energy will be solar, which is about 10
times as expensive as wind, geothermal, and other renewables. Therefore, on a
cost basis, Arizona’s standard is quite comparable to the others.
Arizona Schedule:
%
Renewables ------Date
0.2%-----------------2001
0.4%-----------------2002
0.6%-----------------2003
0.8%-----------------2004
1.0%-----------------2005
1.05%---------------2006
1.1%-----------------2007 - 2012
Caveat –
Arizona’s standard also specifies that if the cost of solar technologies do not
decrease to a Commission determined cost/benefit point by the end of 2004, the
portfolio requirement will not continue to increase.
Texas Schedule:
MW New
Renewables-----------Date
400 MW ----------------------- 01/01/2002
400 MW ----------------------- 01/01/2003
850 MW ----------------------- 01/01/2004
850 MW ----------------------- 01/01/2005
1,400 MW --------------------- 01/01/2006
1,400 MW --------------------- 01/01/2007
2,000 MW --------------------- 01/01/2008
2,000 MW --------------------- 01/01/2009 – 2019
Nevada Schedule:
%
Renewables -- Date
5% -------------------- 01/01/2003
7% -------------------- 01/01/2005
9% ------------------- 01/01/2007
11% ------------------ 01/01/2009
13% ----------------- 01/01/2011
15% ----------------- 01/01/2013
More on Arizona’s RPS
funding surcharge: The new
surcharge is capped at 35¢ per month for residential customers, $13/month for
non-residential, and $39/month for customers with loads over 3 MW. In total, at
least $15 - $20 million is expected to be collected annually for the EPS.
Green
pricing programs are one of the great successes of the 1990s for renewable
energy, and many now exist in the United States. Roughly one in five Americans
can now choose to have some or all of their electricity supplied by renewable
energy sources. Public support for these programs was established through many
surveys of public opinion. Public Service Company of New Mexico (PNM) has even
conducted a small focus group study in Albuquerque, which indicated strong
support comparable to that found in other states. What follows is are fairly
detailed descriptions of green pricing programs in New Mexico and neighboring
states: the main things to note here are the prices being charged and the
success of the programs to date in signing up customers. This data illustrates
overwhelmingly that customers not only say they want green power, but that they
buy it when it has been properly marketed to them (the latter is not
always the case!).
- New Mexico:
- SPS
presently has a single 660 kilowatt turbine installed near Clovis, New
Mexico. Recently, the DOE agreed
to purchase much of the power from the first turbine, triggering the
building of a second turbine. SPS
agreed to a 15-year deal with wind power supplier Cielo Wind Power, LLC,
of Austin, Tex., to buy electricity generated from the turbine. The
generator is a Danish-made Vestas wind turbine, with a tubular tower
reaching 230 feet, and featuring blades 80-feet long. The wind farm
developer Cielo (which means "sky" in Spanish), and turbine
manufacturer Vestas constructed the $1 million project four miles east of
Clovis in southern New Mexico. The wind generation is supported by SPS
customers in New Mexico who choose to pay a little extra each month, to
sponsor generation from wind.
SPS offers the wind-generated energy in blocks of 100 kilowatt hours.
Each block of wind-generated electricity costs $3 more than power
purchased at southwestern public service company's standard rates. SPS
customers in new mexico who want to support the renewable energy project
should call (800) 750-2520, which is the listed SPS service number. SPS
contact: Bill Crenshaw, (806) 378-2120.
- Arizona:
- In 1997, the Arizona
Corporation Commission approved Arizona Public Service's (APS) green
pricing tariff to develop 400 kW of centralized, grid connected
photovoltaic systems for interested commercial as well as residential
customers. APS now has 1 MW of installed solar generating capacity and
will add another MW in 2001. Solar power will be sold to
participating residential customers in 15-KWh increments. The premium
will be $2.64 per month per 15 KWh block.
- Salt River Project (SRP) is
the nation's third-largest public power utility and one of Arizona's
largest water suppliers, providing power to customers throughout a
2,900-square-mile service territory in central Arizona.
- SRP’s first green pricing
tariff program, named Solar Choice, began accepting subscribers in
October of 1998. Solar Choice allows customers to voluntarily pay a
premium for renewable energy generated from renewable electric generating
stations. SRP customers subscribe to the Solar Choice program by paying
$3/month for a 100-W block, which is approximately equivalent to a
15-kWh block. Currently the Solar Choice program is fully subscribed
with about 1,000 participants and others on a program waiting list.
- SRP’s second green pricing tariff program, named EarthWise
Energy, began accepting participants on March 1, 2001. The program
allows customers to voluntarily pay a premium for renewable energy
generated from renewable electric generating stations. SRP customers can
subscribe to the EarthWise Energy program by paying $3/month for a
100-kWh block.
- The Arizona Corporation
Commission approved Tucson Electric Power (TEP) Company's green pricing
tariff in January of 2000. The program, named GreenWatts, allows
customers to voluntarily pay a premium for renewable energy generated
from burning methane gas from the Los Reales Landfill in Tucson. TEP
customers can subscribe to the GreenWatts program by paying $2/month for
the first 20-kWh block, and $1.50 for each additional block. TEP has
180,000 20 kWh blocks available each month.
- Colorado:
- Public Service Company of
Colorado's (PSCo) WindSource, has had a great deal of success since
marketing began in the spring of 1997. Both residential and commercial
customers are invited to participate in this program which supports
grid-connected wind turbines. Residential customers can sign up for one
year periods and buy wind energy at $2.50/month for 100 kWh blocks;
commercial customers can sign up for three year periods and buy their
wind generated electricity in 1000 kWh blocks for $25. The program is
projected to support 10 - 20 MW of wind capacity from turbines located in
northern Colorado. As of August, 1997 PSCo had approximately 3,000 residential
customers sign up for a total of 6.85 MW. Additionally, half a dozen
major commercial electric customers have signed up. PSCo's corporate
"champions," who have committed to purchase at least 15% of
their energy from wind turbines, include the city of Boulder, the city
and county of Denver, CF & I Steel, Coors Brewing Company, IBM, and
US West. Notably, Colorado Governor Roy Romer has announced that the
governor's mansion will begin purchasing wind power through the
Windsource program, and the U.S. Department of Energy's (DOE) National
Renewable Energy Laboratory (NREL), in Golden, Colorado, has committed to
purchasing 4,000 kilowatt hours.
- Colorado Springs Utilities
(CSU) offers its residential and commercial customers a wind power green
pricing program called Green Power. CSU purchases about 1 megawatt of
wind-generated energy from the Public Service Company of Colorado
WindSource program to supply its customers’ demands. Green Power drew a
strong response from CSU customers -- the utility had to establish a
waiting list after selling out all available slots in 1998. CSU increased
its wind purchases in 1999 to meet demand. The program currently has
1,100 participants. CSU charges a premium of $3.00 per month for a
100 kWh block of wind power. There is a one-year commitment period, but
it is not rigidly binding on the customer. The utility promotes the
program through local media, the utility newsletter, local environmental
groups and events.
- Estes Park Power & Light
offers a green pricing program through its Wind Power purchase option.
Under the program, residential customers can sign up to purchase 100-kWh
blocks of wind energy for an extra $2.50 each month or 2.5¢/kWh. Business
customers can participate by purchasing a minimum of ten, 100-kWh blocks
for $12.50 per month. There are 400 blocks available and they are being
awarded on a first-come, first-served basis. To-date, there are 52
residential subscribers and three business subscribers. Customers are
required to make a year-long commitment to purchase the wind energy.
- The Wind Power Program is a
green pricing program offered by the City of Fort Collins Utilities and
Platte River Power Authority (Platte River), the utility’s power
wholesale supplier. All residential and commercial customers are allowed
to participate by purchasing all or a portion of their electricity needs
with wind power. Businesses may purchase electricity in any number of
1,000-kWh blocks for $25 per block per month. Residents may purchase
blocks of wind-generated electricity for $10 per block per month.
The program currently has approximately 715 residential and 23
commercial subscribers.
- Holy Cross Electric
Association, which serves part of the City of Aspen and surrounding
areas, started marketing its green pricing program in February, 1997.
Holy Cross is a wholesale customer of Public Service Company of Colorado
(PSCo) and will purchase wind power from PSCo directly. Holy Cross
Electric customers can pay $2.50/month for 100 kWh blocks of wind
generated power. As of January, 1997, Holy Cross Electric Association had
garnered subscriptions from 877 residential and commercial customers for
a total of 1800, 100-kWh blocks of wind power; enough to cover the first
megawatt of wind power the association will purchase from Public Service
Company of Colorado.
- Longmont Power &
Communications (LPC) offers customers a green pricing program called Wind
Energy. Power is supplied by Platte River Power Authority’s Medicine Bow
Wind Power Project in Wyoming. Under the program, residential customers
can sign up to purchase 100-kWh blocks of wind energy for an extra $2.50
each month. Business customers can participate by purchasing 500-kWh
blocks for a premium of $12.50 per month. Participating customers must
commit to the wind purchases for a minimum of one year. An option
available to both residential and business customers is to have wind
energy provide all their monthly energy needs. LPC launched its
Wind Energy Program on November 1, 1999, when 142 residential customers
and 2 business customers began receiving 40,000 kWh of wind energy each
month. The program was expanded on February 1, 2000, when an additional
15,000 kWh of wind energy began flowing to 58 more homes in Longmont. In
the summer of 2000 LPC was able to offer additional subscriptions for
25,000 kWh of wind energy as PRPA installed two additional 660-kW wind
turbines at its Medicine Bow site, bringing the total number of turbines
to ten. As of October 2000, the Wind Energy Program serves 293
residential and 2 business customers.
- The City of Loveland Water
and Power Department offers a green pricing program to residential,
commercial and industrial customers. The Wind Energy Premium, initiated
in February 1999, offers customers the option to purchase 100-kWh blocks
of wind energy for $2.50/month. The utility began signing up customers in
early 1999. As of October 2000, 248 customers purchase 55,600 kWh of wind
energy each month. Kinko’s Copies purchases the largest block. Each
month, Kinko’s buys 45 blocks of wind energy.
- Public Service Company of
Colorado's SolarSource program is the utility's fourth green pricing
program. SolarSource is a pilot program to install 15 to 25 rooftop solar
energy systems on customers' homes at below-market prices during 1997.
The systems will typically range in size from 2kW to 3kW. The program is
funded through Colorado SunService, a unique collaboration between PSCo,
other Colorado utility companies, the U.S. Department of Energy, the
Utility PhotoVoltaic Group, the Colorado Governor's Office of Energy
Conservation, and Solarex. By the year 2000, Public Service Company of
Colorado and their partners expect to install over two hundred roof-top
systems. SolarSource is currently awaiting approval by the Colorado
Public Service Commission.
- Public Service Company of
Colorado's first green pricing program, the Renewable Energy Trust, was
established in 1993 to help develop renewable energy use through
voluntary customer contributions. The program supports a variety of
technologies, although most are off-grid photovoltaic demonstration
projects. All of the installations through the Renewable Energy Trust
have been deployed on nonprofit and government buildings, and PSCo
expects to soon shift its efforts to installations on school buildings.
To date, a total of 15 kW of capacity has been installed through the
program. Customers can contribute to the fund through one of two
ways: pledging monthly amounts directly to the trust or agreeing to have
their monthly utility bill rounded
up to the next highest dollar amount. This latter option is called the
"Round Up for Renewables." PSCo has received direct pledges
from 5,500 customers with total annual contributions averaging $53,000,
while over 10,000 customers have signed up for Round Up for Renewables which
has generated $102,000 per year. Public Service Company of Colorado has
promoted the Trust and Round Up for Renewables through bill inserts,
direct mail, articles, and print and radio advertisements.
- Nevada:
- In October 1997, Nevada
Power Company applied to the Public Utilities Commission of Nevada for
approval of its green pricing program. Today, Nevada Power Company, a
subsidiary of Sierra Pacific Resources, and the Desert Research
Institute’s Research Foundation, a fund-raising and public outreach arm
of the Desert Research Institute, have partnered together on the
GreenPower program. Soon, the GreenPower program will be transferred to
the Desert Research Institute’s Research Foundation, enabling
participants to take a tax deduction for past donations in this tax year,
or receive a refund check. Nevada Power Company will continue to collect
customer contributions through the electric bill statements.
GreenPower is generated from a photovoltaic array located at the
Desert Research Institute. Customers may contribute a specified whole
dollar amount each month for a minimum 6-month participation commitment.
- Texas:
- Austin Energy kicked off the
new millennium by inviting its 350,000 customers to sign up for
GreenChoice. The program aims to provide 5% of electricity from renewable
resources by 2005. Under the GreenChoice program, residential and
business customers opt to have the standard (fossil) fuel charge on their
electric bill replaced entirely by the GreenChoice power charge of 2.85
cents per kWh. This charge will remain fixed for 10 years. If the current
standard fuel charge of 2.68 cents per kilowatt-hour (kWh) rises in the
future due to the increase of fossil fuel prices, the GreenChoice power
charge will remain fixed for 10 years. Currently, a residential customer
using the Austin average of 1,000 kilowatt-hours of electricity monthly
will therefore pay an additional green power charge of about $1.70 per
month for their electricity as a GreenChoice member. Just 10
months after officially launching its GreenChoice green pricing option,
Austin Energy had fully subscribed the initial 40 MW of renewable energy
supply. The utility continues to seek additional renewable energy
supplies to expand the program. In total, over 3,075 customers have
signed up for the service. Unlike with many other utility green pricing
programs, business customers have committed to purchase a majority of the
available power -- nearly 85% -- with one company alone committing to 60%
of the initial green power pool.
In 1999, the Austin City Council adopted a resolution calling for 5% of
Austin's electricity to come from renewable sources by 2005 -- the
GreenChoice program will raise the amount of renewable energy in the
city's portfolio from 0.5% to about 2.5%. Austin Energy is committing to
$7.8 million in spending in each of the next 10 years to build its green
power program.
Austin Energy orchestrated an aggressive advertising and grassroots
marketing campaign that included billboards, brochures mailed to 30,000
members of Austin's environmental community, and GreenChoice booths
staffed at community events and outside major businesses to sign up
customers. Austin’s environmental community has pledged to work
diligently to ensure the program is a success.
- Solar Explorer is a green
pricing program created by Austin Energy, the City of Austin’s municipal
utility. It is designed to support photovoltaics installations on
commercial sites around Austin, TX. The program is modeled after the
SolarCurrents green pricing program offered by Detroit Edison. All of
Austin Energy’s customers are eligible to participate in Solar Explorer.
The program officially got off the ground in 1998 and is expected to
operate for six years.
Approximately 1252 blocks of solar power have been sold to nearly 1000
participants to date. The utility is currently working on recruiting
seventeen local commercial customers at 150-watt blocks each.
Participants pay a monthly premium of $3.50 per 50-watt block and make a
two-year customer commitment. So far these contributions have gone
towards the construction of three grid-connected PV systems.
- City Public Service (CPS),
serving more than 550,000 customers in San Antonio, began offering a wind
power green pricing option to all of the city's retail customers in April
2000. Power for the Windtricity program will eventually be supplied from
a 25-MW wind project planned for West Texas. In the meantime, CPS is
purchasing 600,000 kWh of wind power each month from an existing wind
project. Wind energy is available in 100-kWh blocks for an additional
$4.00 per month, or a premium of 4¢/kWh. Customers can choose the number
of "blocks" they want up to their total monthly electric use.
There is no minimum commitment. Participants receive a semi-annual
newsletter relating to renewable energy and the environment, a
Windtricity yard sign indicating that their home uses wind energy, and a
Windtricity window cling for their vehicle.
- Texas-New Mexico Power
Company (TNMP) provides service to more than 238,000 customers in 85
communities in Texas and New Mexico. TNMP’s new green pricing tariff
program, named Energy Ranch wind power, will begin accepting participants
in July 2001. The program allows customers to voluntarily pay an
additional 1¢/kWh for renewable energy generated from wind turbines.
TNMP estimates that the average residential customer uses about
1,100 kWh of power per month. Participating in Energy Ranch wind power at
1 cent more per kWh will mean customers will pay approximately $1 more
per month. The wind power will be sold in blocks of 100-kWh.
- Clear Choice is a green pricing program introduced by West
Texas Utilities in October, 1997. West Texas Utilities is owned by
Central and Southwest Services (CSW), a holding company which also
operates Central Power and Light, Southwestern Electric Power, and Public
Service Company of Oklahoma. The program is initially only available to
residents of San Aneglo, but will likely be opened up to other cities in
West Texas Utility's territory. Customers can choose to pay a monthly
premium of $5, $10, or $20 for 250 kWh, 500 kWh, or 1000 kWh,
respectively, for renewable energy resources. Renewable energy for the
program will be supplied by Small Hydro of Texas, Inc., from its 1.2 MW
hydroelectric power generation facility near Cuero, Texas. In
designing the Clear Choice program, CSW conducted direct surveys and
followed up with a two day conference attended by over nine hundred of
their customers. In the results of the survey and conference, over 80
percent of customers indicated that they would be willing to pay an extra
amount in their utility bills to support renewable energy. Based on their
market research, CSW projects roughly 5% of their customers will sign up
for Clear Choice.
Arizona:
Tuscon Electric Power is offering their customers who have qualifying solar
access (southfacing roof, appropriate pitched, unobstructed sun) a rebate worth
$2000 per kilowatt of PV installed. The
customer may either buy a system from a third party owner (in which case the
utility will pay the customer $2000 per kilowatt), or may buy one of two kits
offered by the utility at $6000 per 1 kW. The program has a net-metering option
as well. The utility is having some problems with their kits at present due to
lack of availability due to high volume sales in CA, and also due to problems
with efficiency loss of panels in the hot AZ climate – they are presently
developing a fix to this problem.
Nevada:
The Conservation Department of the
City of Boulder City Public Works offers renewable energy rebates to its
customers under its Energy Efficient Appliance Program. Both commercial and
residential customers located in Boulder City, NV, are eligible for this
program. These rebates only cover conversions from existing electric water
heaters to solar water heaters. The utility offers $200 from its own funding
reserves for each forty-gallon tank that is replaced. The rebates have only
been in place since 1988. They are promoted by Boulder City Public Works
through periodic new releases and flyers distributed at credit unions, the
local library, and the utility’s office.
Colorado: The Governor's Office of Energy Management and Conservation (OEMC) in
cooperation with the Colorado alternative fuels industry offers rebates to
vehicle owners who convert their vehicles to cleaner burning alternative fuels
or for the purchase of an alternative fuel vehicle. Eligible fuels include
propane, compressed natural gas, methanol, ethanol, and electricity. The base
rebate is 15% of the cost of the vehicle which may be increased up to a total
of 50% depending on the type of vehicle and its use. For example, the rebate is
increased by 10% for a new factory vehicle or engine installed by the Original
Equipment Manufacturer (OEM). The maximum rebate amount is $1,500 for passenger
vehicles, $2,500 for light-duty trucks (8,500 lbs. or less), $3,500 for
medium-duty trucks (between 8,500 and 14,000 lbs.), and $6,000 for heavy-duty
trucks (greater than 14,000 lbs.).
Texas: The Austin Home Energy Air Conditioning and Appliance Rebate program
offers customers a rebate on solar water heaters and energy-efficient
equipment, such as heat pump water heaters, heat recovery water heaters, and
package air conditioners and heat pumps. Funding for the rebates comes from
Austin Energy’s revenues.
For solar water heaters, there are three
rebate options available to customers:
- 16 square foot collector area or less: $150;
- 16 to 35 square foot collector area: $250; and
- 36 square foot collector area or more: $350.
Austin Energy also offers a Home Energy Loan program. Customers choose one of
two loan options to finance energy efficiency projects.:
- a 5.99%interest Home Improvement Loan: 3, 5, 7, or 10 year repayment periods,
and $6,000 maximum loan amount ($9,000 for duplexes); or
- a 7.99% interest Major Home Improvement Loan: 3, 5, 7, or 10 year repayment
periods, and $9,000 maximum loan amount.
Austin Energy promotes both the Home Energy
Loan and the Home Energy Air Conditioning and Appliance Rebates programs to the
public through bill inserts, on billboards, and in advertisements for TV,
newspapers, and magazines. The utility also publicizes the loans and rebates at
presentations to neighborhood associations and businesses, and in literature
distributed at home improvement shows and the Austin City Chamber of Commerce.
Participating customers must choose to accept either the loan or the rebate,
but not both.
- Arizona:
- Personal Tax: This statute provides a
credit against the personal income tax in the amount of 25% of the cost
of a solar or wind energy device. The credit can be claimed in the year
of installation and has a maximum allowable limit of $1,000. If the
amount of the credit exceeds a taxpayer’s liability in a certain year,
the unused portion of the credit may be carried forward for up to five
years. Qualifying technologies include passive solar heating, active
solar space heating, solar water heating, photovoltaics, and wind
systems. Tax credit forms and guidelines can be found on the Arizona
Solar Center "Benefits" webpage.
- Sales Tax: This retail sales tax
exemption applies to solar and wind energy equipment. Solar includes
passive solar heating, active solar space heating, solar water heating,
and photovoltaics. Qualifying wind systems include wind electric
generators and wind-powered water pumps. This exemption is allowed on
equipment up to $5,000.
- Nevada
- Property Tax: This statute states that
any value added by a qualified renewable energy source shall be
subtracted from the assessed value of any residential, commercial or
industrial building for property tax purposes. Qualified equipment
includes solar, wind, geothermal, solid waste converters and hydropower systems.
This exemption applies for all years following installation.
- Property Tax: Enacted in 1993, but most
recently revised by SB 227 on June 1, 2001, this statute allows a
property tax exemption for any business that: 1) uses a process where at
least 50% of the material or product is recycled, or 2) includes a
facility for the generation of electricity from recycled material, whose
primary purpose is the conservation of energy or the substitution of
other sources of energy for fossil sources of energy. The exemption
applies to 50% of the business property – personal and real – for up to
ten years. If a facility is generating electricity from renewable energy,
then it uses renewable energy as its primary source of energy, and has a
generating capacity of at least 10 kW. Facilities located on residential
property are not included. Renewable energy means biomass, solar energy,
or wind.
- Texas:
- Franchise Tax: Franchise tax is Texas’s
equivalent to a corporate tax; their primary elements are the same. This
statute allows a corporation to deduct the cost of a solar energy device
in one of two ways: (1) the total cost of the system may be deducted from
the company’s taxable capital; or, (2) 10% of the system’s cost may be
deducted from the company’s income. Both taxable capital and a company’s
income are taxed under the franchise tax.
- Franchise Tax: For solar equipment
manufacturers, Texas code states that "A corporation engaged solely
in the business of manufacturing, selling, or installing solar energy
devices . . . is exempted from the franchise tax." The franchise tax
is Texas’s equivalent to a corporate tax; their primary elements are the
same. There is no ceiling on this exemption and thus is a substantial
incentive for solar manufacturers. This is the only such blanket
exemption of its kind for solar manufacturers. Only Nevada makes a
similar sort of exemption with a seventy-five percent (75%) property tax
exemption--for all property--for producers of renewable energy.
- Property Tax: This statute exempts
taxpayers from any value added by a qualified renewable energy source for
property tax purposes. Qualified equipment includes any active solar
equipment and any wind devices, as well as transmission equipment.
Arizona:
The Revolving Energy Loans for Arizona (RELA) Program is offered by the
Department of Commerce for companies that either manufacture renewable energy,
alternative energy, or energy conserving equipment or acquire such equipment
for use in their own processes. Manufacturers can qualify for the loan only if
they have at least two years operating experience in Arizona. Loan requests may
range from $10,000 to $500,000, up to a maximum of 75% of total project costs.
Fixed interest rates are 5% for conservation or retrofit projects and manufacturing.
Projects must have seven years simple payback or less.
New Mexico
ranks in the big leagues with respect to wind power, having the twelve largest
resource in the USA (much greater than California's resource - see the table
below). The resource is estimated to be capable of providing roughly 435
billion kwh annually, enough to power 40 million households. Comparing
this to New Mexico's total electricity use of about 17 billion kwh/yr, we find
that New Mexico’s wind resource potential is about 25 times larger than her
usage.
|
THE TOP TWENTY U.S. STATES
for wind energy potential
as measured by annual energy potential in the billions of kWh,
factoring in environmental and land use exclusions for wind class of 3 and
higher.
|
|
Rank
|
State
|
B kWh
|
Rank
|
State
|
B kWh
|
|
1
|
North Dakota
|
1,210
|
11
|
Colorado
|
481
|
|
2
|
Texas
|
1,190
|
12
|
New Mexico
|
435
|
|
3
|
Kansas
|
1,070
|
13
|
Idaho
|
73
|
|
4
|
South Dakota
|
1,030
|
14
|
Michigan
|
65
|
|
5
|
Montana
|
1,020
|
15
|
New York
|
62
|
|
6
|
Nebraska
|
868
|
16
|
Illinois
|
61
|
|
7
|
Wyoming
|
747
|
17
|
California
|
59
|
|
8
|
Oklahoma
|
725
|
18
|
Wisconsin
|
58
|
|
9
|
Minnesota
|
657
|
19
|
Maine
|
56
|
|
10
|
Iowa
|
551
|
20
|
Missouri
|
52
|
Note that New Mexico has
approximately one third the wind resource of the state with the largest
resource, North Dakota. Also note that there is a dramatic decrease in wind
power resource after New Mexico: Idado, the next state after New Mexico, has
less than one quarter of New Mexico’s resource! That is not to say that wind
power is cannot be a significant contributor in these states as well, however –
not that California is also ranked lower than New
Mexico.
New Mexico’s
solar resource potential is essentially off the charts. Assuming 15% efficient
solar (photovoltaic) collectors and factoring in the fact that the sun shines
strongly roughly eight hours a day, one square kilometer of solar collectors
can produce electricity equivalent to a continuous 50 megawatt generator
(the actual total sunlight falling on a square kilometer on a clear day in New
Mexico delivers 1 Gigawatt!). Given New Mexico’s average electricity power
consumption of 1.9 Gigawatts (average), then an area equal to 1.9 / .05 = 38
square kilometers, or a square equal to 6 kilometers on a side, could provide
all of New Mexico’s electricity needs with current technology.
- New
Mexico Solar Energy Association (www.nmsea.org): Educational, some
policy. SunChaser2 Education program takes renewable energy technology and
concepts to schools and events (intersecting roughly 7000 students and
3000 adults per year). Home design competition, solar home tours,
workshops, Large Solar Fiesta Event (exhibits and workshops), Taos Solar
Village (exhibits). Makes various equipment available upon request (giant
SunOven, courtesy of Sandia Labs, etc). Writes letters to legislatures,
provides testimony, etc.
- Coalition
for Clean Affordable Energy (www.cfcae.org): A coalition of eight
environmental groups:
Many of these groups are
directly involved in renewable energy policy work, outside of the coalition.
CCAE lobbies the legislature, files comments at the PRC, participates on press
releases on energy issues. Broad scope: concerned with all consumer and
environmental issues related to energy. CCAE played a role in crafting New
Mexico’s deregulation legislation, and in several of the rules promulgated by
the PRC based on that legislation.
- Energy
Conservation and Management Division of the New Mexico Energy, Minerals
and Natural Resources Department (http://www.emnrd.state.nm.us/ecmd/):
Provides testimony, public education and information, conducts
research related to energy conservation, efficiency, and renewable energy.
The current Director, Chris Wentz, chairs the New Mexico Sustainable
Energy Collaborative (see below). The division also funds many projects by
groups such as NMSEA, Rebuild New Mexico, and others.
- New
Mexico Sustainable Energy Collaborative (email Chris Wentz:
cwentz@state.nm.us): A large, informal collaboration between utilities,
advocacy groups, solar businesses and other which formed following the
Alternative Energy Symposium in December 2000 which was initiated by PNM.
The collarborative includes many of the organizations listed here,
including NMSEA and CCAE. The general purpose of the collaborative is to
further renewable energy in New Mexico by formulating comments, draft
regulations, and draft legislation that enjoys a broad consensus among
stakeholders. The first official act of the collaborative was to file
comments on renewable energy in response to the recent Notice of Inquiry
from the NM PRC.
- New
Mexico Solar Industries Association (Contact Chuck Marken at
505-243-4900): A collection of New Mexico solar companies that
occasionally pursues policy work.