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Draft rule reduction: 33.9% (538 lbs CO2 / MWh)

Editor's note: The following summary represents state and utility stances after the Supreme Court stayed the Clean Power Plan in February 2016.

After a Supreme Court decision to stay the Clean Power Plan, New Mexico Environment Secretary Ryan Flynn said in a statement that "despite capricious political winds, the New Mexico Environment Department remains committed to taking meaningful action to reduce greenhouse gases by a projected 5.7 million tons by the end of 2017."

But, he added, "as New Mexico has stated since the Clean Power Plan was originally proposed, a bi-partisan legislative solution to reduce greenhouse gas emissions can be more effective for creating sustainable results, and thus avoid the overstepping of federal regulatory boundaries which occurs when the Executive branch of government attempts to legislate through regulations, rather than Congress."

New Mexico Gov. Susana Martinez (R) has opposed the Clean Power Plan, but the state's Democratic attorney general is supporting EPA against legal challengers. Even with political leadership split on the merits of the rule, New Mexico had been working to write a blueprint to submit to EPA to avoid getting stuck with a federal plan.

Before the stay, NMED had planned to request a two-year extension to submit a final plan to EPA in 2018. The agency's draft would need approval from the Environmental Improvement Board, a regulatory oversight panel that consists of seven members appointed by the governor and approved by the state Senate.

The New Mexico Environment Department's Air Quality Bureau had been meeting separately with power companies and environmental advocates to gather feedback about how the state might meet U.S. EPA's carbon-reduction requirements, according to public records obtained by ClimateWire.

Most of the representatives from 13 utilities and rural electric cooperatives said in a private meeting with state officials on Nov. 13, 2015, that they were leaning toward a mass-based standard, in which the state would cap total emissions rather than adhere to an average rate of CO2 produced by the power fleet.

The companies expressed interest in New Mexico allowing interstate emissions trading, so that fossil fuel generators that fall short of their standards can purchase allowances to comply. And they are concerned about whether those allowances will be allocated for free or auctioned off to the highest bidder (ClimateWire, Dec. 21, 2015).

The group expressed concern that politics could get in the way of NMED writing an approvable state plan, according to meeting notes paraphrased by agency staff. Power companies asked whether the EIB might "mess around with" NMED's proposal.

The city of Albuquerque and Bernalillo County also have a say in the final plan as the permitting authority for one of the affected facilities, according to notes. The Albuquerque-Bernalillo County Air Quality Control Board, with four members appointed by the city mayor and three by the county, must sign off.

In a separate private meeting with the same state officials on the same day in November, environmental groups asked how the state Legislature might become involved.

"The Cabinet Secretary and other senior staff discuss issues with the legislature but legislative decision could affect our ability to create a plan, so we need to follow legislative issues closely," a meeting summary from NMED said.

A planning process on hold?

In PowerPoint slides for a presentation used at both November meetings, NMED outlined the decisions the state must make, including: whether to allow emissions trading, whether to adhere to an average rate of emissions or cap CO2 at a specific level, and whether to include new sources of power in that cap.

Under the rule, New Mexico must achieve an emissions rate of 1,146 pounds of CO2 per megawatt-hours of power by 2030, which amounts to a 36 percent reduction below 2012 levels.

New Mexico is in "good shape to meet the mass goal," NMED noted in a response to questions from the environment groups. And the state may have surplus allowances to sell if it chooses a trade-ready plan, the agency added.

The title of New Mexico's energy policy and implementation plan published Sept. 15, 2015, underscores Martinez's position that the state "cannot afford to exclude any energy asset from our portfolio."

The state hasn't updated its energy policy since 1991, and California's choice to stop buying coal-generated power in 2014 is "eroding the market base for New Mexico," the report reads.

New Mexico is a net exporter of electricity, Flynn said.

Rich in oil and gas fields and dotted with coal fields, the state generates about 60 percent of its electricity from coal, 28 percent from natural gas and roughly 11 percent from renewables, according to U.S. Energy Information Administration data. It's also among the poorer states: As of 2013, per-capita personal income hovered at $36,000, compared to about $45,000 nationwide, according to EIA.

Thanks to an agreement between the state and EPA to shutter two units within the San Juan power plant by 2017, Flynn said in the fall that the state was on strong footing to meet EPA's set goals.

"A lot of the work that people will now be doing as a result of this rule, we did three years ago," he said, referencing the San Juan plant closures.

Last updated on February 25, 2016 at 12:13 PM

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