The rise of renewable energy is inevitable. But these resources should be owned by residents and the city — not utility monopolies.
In late October, Santa Fe Mayor Javier Gonzales presented a proposal that could be a game-changer for the city’s energy future. He is seeking to double the city’s use of renewable energy through the construction of a new 3.5-megawatt photovoltaic project (“Mayor pushes for large new solar array,” Oct. 26). As the city government charts its course toward reaching 100 percent clean power by 2025, this project could be a critical step.
But there’s just one catch — the proposed installation would be owned and operated by the investor-owned utility monopoly, Public Service Company of New Mexico, instead of the city itself. This is a missed opportunity. The promise of the advanced energy economy goes beyond a cleaner environment and more sustainable power — it’s also about building a more diversified, resilient and competitive economy.
While PNM has long relied on fossil fuels and nuclear for most of its electricity generation, the company is finally recognizing the realities of the clean energy future. The cost of putting up solar panels has fallen by more than 70 percent over the past decade and a half. According to a study from the investment bank Lazard, utility-scale solar energy is now cheaper than even many of the most efficient gas plants.
Today, PNM, like many other big investor-owned utility monopolies, is coming to see the ownership of “distributed energy resources” such as solar on homes and businesses as an opportunity to shore up its business model. After all, the company will claim it has important advantages like customer relationships, a regulated way to recoup costs, knowledge of the region’s electricity needs and a low cost of capital.
But there are serious costs in allowing the biggest old-school energy players to dominate the new energy economy. When we rely on monopolies like PNM to own and operate solar, these utilities can use their extreme market power to seize an unfair competitive advantage. This can, over time, mean less innovation on technology and service, as well as less competition on cost. When big utilities own solar, ratepayers are still subject to the unexpected rate hikes and the consequences of corporate investment decisions that prioritize investors over the public.
Individual and public ownership of generation fixes the cost of energy and keeps control inside the community. Governments should do everything in their power to ensure that individuals and public groups own and operate generation resources while enabling the emergence of competitive clean energy markets, built on the foundation of locally owned and operated businesses and community institutions. Utilities, too, have a role in the rise of renewables through grid modernization, utility-scale renewable generation, energy efficiency programs and other support for the clean power transition.
State government officials can also help make a locally driven energy transition possible. Lawmakers can start by letting New Mexicans take advantage of Community Solar — shared energy projects that allow groups of people to own a stake in or purchase power from local solar farms or “solar gardens.” Community Solar is a win-win — it creates jobs, cuts costs, boosts local businesses, and can allow lower-income communities to access renewable power.
Mayor Gonzales should be applauded for his visionary thinking on energy. He has championed policies — like the Verde Fund and the city’s 100 percent renewable goal — to position Santa Fe at the forefront on sustainable power. As we work to implement this vision, let’s pave a financially and environmentally sustainable future for the city.
Regina Wheeler is chief executive officer of SunPower by Positive Energy Solar.