Sierra Club, CCAE Testify to support NM Carbon Cap rule

The Sierra Club and the Coalition for Clean Affordable Energy support maintaining the 2010 New Mexico EIB carbon cap rule.

Contact: David Van Winkle, Energy Chair, Sierra Club Rio Grande Chapter (505) 820-1006, david@vw77.com

December 5 - David Van Winkle, Energy Chair for the Rio Grande Chapter of the Sierra Club, spoke on behalf of the Sierra Club and Coalition for Clean Affordable Energy before the Environmental Improvement Board on Monday. The board, appointed by Gov. Susana Martinez, is hearing testimony on a petition by PNM, New Mexico Petroleum Marketers and others to repeal a plan adopted (by different members) last year to cap greenhouse gases emitted by major sources in New Mexico.

Full transcript of testimony is below. Van Winkle, an electrical engineer, highlighted the followed points:

• The average PNM residential customer’s rate has gone up 40 percent in 40 months (April 2008 to August 2011), and those increases were due to costs of existing fossil-fuel sources and infrastructure, not renewable investments. Despite PNM’s newfound concern for its customers' pocketbooks, this plan is not likely to raise rates for New Mexicans more than dirty business as usual.
• PNM’s San Juan Generating Station and other coal-fired power plants produce nitrogen oxides and other pollutants that sicken New Mexicans and create medical costs (see Harvard study that says coal costs 9 to 27 cents per kWh more than the price on energy bills: http://bit.ly/up05Jj, and American Economic Review: Coal damages range from .8 to 5.6 times its value added: http://bit.ly/sVVBai). According to the American Lung Association, “nitrogen dioxide causes a range of harmful effects on the lungs." Coal is much more expensive than its stated price.
• Investments in energy efficiency would be cheaper, save consumers much more money, and reduce emissions more than any energy source.
• Economists have estimated that the plan to reduce carbon emissions is likely to have a net positive effect on New Mexico’s economy. Investments in new renewable energy create new jobs, while maintaining old coal plants that sicken residents does not.
• The San Juan coal plant uses twice as much water each year as the city of Santa Fe.

Evidence shows that the New Energy Economy plan adopted last year by the EIB would be good for New Mexico’s economy. It would be good for New Mexicans’ health. It would save precious water. It would help stem the tide of climate change, which, under business as usual, would cost New Mexicans far more than this plan would cost PNM and the American Petroleum Institute.

Critics claim that New Mexico’s emissions are insignificant compared with global emissions, so we should do nothing. That is an immoral excuse to refuse to address the greatest crisis facing our children and humankind. While this rule might be inconvenient for PNM and its fellow plaintiffs, it is good for everyone else in New Mexico.

Full testimony

December 5 - The Sierra Club and the Coalition for Clean Affordable Energy support maintaining the 2010 New Mexico EIB carbon cap rule.

New Mexico’s Energy Strategy needs to revised to meet the needs of the residents and rate payers of New Mexico.

1.Electricity rates have been increasing at an incredible rate over the past few years. From April 2008 to August 2011, a period of only 40 months, PNM raised residential rates by 40% for the average ratepayer in their system. This can easily be confirmed by comparing the customer fee, energy rates, and fuel adjustment factors for the typical user of 600kWh/month. This 40% rate increase is driven by required investments in their existing fossil fuel energy sources and infrastructure, not renewable investments. The PNM Integrated Resource Plan (IRP) that was submitted in July 2011 to the PRC, continues the same strategy of maintaining existing resources, so we should expect continued rate increases in the future.

2.The existing fleet of fossil fuel based electricity energy sources, specifically coal-fired power plants like the San Juan Generating Station produce significant air pollution. While pollution reduction improvements have been realized at San Juan due to the 2005 Consent Decree actions, carbon and nitrogen oxide pollution continue at high levels.

a.In 2010, the San Juan plant produced 16,000 tons of nitrogen oxide. The American Lung Association states that “Nitrogen dioxide causes a range of harmful effects on the lungs: 1) Increased inflammation of the airways; 2) Worsened cough and wheezing; 3) Reduced lung function; 4) Increased asthma attacks; 5) Greater likelihood of emergency department and hospital admissions; 6) Increased susceptibility to respiratory infection, such as influenza.” Asthma attacks, heart attacks, premature deaths and hospital visits from San Juan Generating Station’s pollution add up to an estimated $255 million a year in health care expenses that are passed on to the public, according to the independent Clean Air Task Force.

b.The state of NM has been realizing significant climate distruption, with drought and wildfires and is expected to have continued and worsening drought in future years. The San Juan plant is one of the largest sources of carbon in the state. With 97% of all climate scientists in agreement that climate change is real and is human caused, it is in the best interest of this state to take action to address climate change, as we are experiencing the early stages of its affects.

3.As we are experiencing significant drought, actions should be taken to conserve our precious water resources. The San Juan plant consumes 677 gallons of water per MWh produces, per the PNM IRP. This is annual usage of about 9 billion gallons or about 2 times the total water consumption of the City of Santa Fe. We need to be developing energy sources that consume less water, like wind and solar.

4.New Mexico has significant opportunity to create job growth by rapidly developing clean energy sources.

a.New Mexico has the 12th best wind resources in the USA. Significant development has taken place in eastern NM, and the potential to continue in this area is quite large. Southern NM also has significant opportunities in wind, as evidenced by the announcement on 11/11 that Tucson Electric has just completed a 50 MW wind farm near Deming. That project created 150 construction jobs. (The residents of Deming, who are in PNM’s service territory are probably wondering why PNM has not built a wind farm there also.) In Colorado, Xcel produced 55% of its energy from wind on October 9. If utilities in these other inter-mountain states are finding it cost effective to produce wind energy, we should also.

b.New Mexico has the 2nd best solar resources in the country. Solar energy is growing in the state, but is still a miniscule share of the total. When I installed a solar electricity system for my home in early 2009, my system was system #400 out of 500,000 customers or less than 0.1%. PNM will install 22 MW of utility owned solar in 2011. PNM has 1000 MW of coal-fired capacity and 400 MW of nuclear power that is imported from Arizona. The solar capacity is a drop in the bucket. The cost of solar is declining rapidly, yet the PNM IRP that defines its energy sources for the next 20 years has no more solar additions. In addition to electricity, solar energy is also cost effective for water heating applications, especially in rural New Mexico where the more expensive propane is used.

c.Geothermal is also a significant potential as an energy source in NM.

5.Energy Efficiency is the most cost effective way to serve energy needs. It is well known in the utility industry that energy efficiency programs save rate payers money and produce energy for less than half the cost of new production. Energy efficiency programs should be aggressively pursued in utility-based programs, community-based weatherization/retrofit programs and new building construction. All of these forms of energy efficiency programs are proven to save money to the building owners.

In Summary, we need to change our energy strategy to:
1. Stop the rate increase spiral that has been occurring over the past several years.
2. Transition to clean energy sources to eliminate the negative effects of air pollution.
3. Transition to clean energy sources that conserve our precious water.
4. Create jobs growth by accelerating clean energy development.
5. Aggressively pursue all forms of energy efficiency

Thus, we support maintaining the 2010 EIB carbon cap rule.

My name is David Van Winkle.

I represent both the Sierra Club and the Coalition for Clean Affordable Energy a.k.a. CCAE .

Sierra Club is a national conservation organization with more than 7000 members in New Mexico.

CCAE is a coalition of 10 conservations and consumer organizations dedicated to promoting energy efficiency and clean energy with more than 20,000 members in New Mexico. The member organizations are Sierra Club, Western Resource Advocates, Natural Resources Defense Council, Southwest Research and Information Center, Environment New Mexico, Southwest Energy Efficiency Project, NM Public Interest Research Group, Center for Advancing Sustainable Architecture, Southwest Energy Alliance, and Western Environmental Law Center.

My personal background includes working for Texas Instruments for 30 years, leading semiconductor chip businesses at the director and VP level. I also have a Masters in Electrical Engineering.