Policy

The phrase “public policy” is often used broadly to include laws, rules, and regulations intended to accomplish certain goals. One scholar defines public policy, for example, as “a system of laws, regulatory measures, courses of action, and funding priorities concerning a given topic promulgated by a governmental entity or its representatives.” 

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More specifically, policy often refers to state or federal legislation designed to facilitate or accelerate certain social or economic outcomes. In the case of energy, an array of policies at both the state and federal levels (supported by local and tribal efforts) attempt to encourage the deployment of renewable sources, and in some cases to favor their location on Indian lands, as summarized below.

State Policies

The NM Energy Transition Act (ETA) of 2019 is a comprehensive framework for enabling the state to transition to a carbon-free energy system (read a bill summary and the full text). It includes several provisions that bear directly on tribal energy economics, including the impacts of diversifying away from fossil fuel generation and the resulting effects on tribal employment and extraction revenues.

As highlighted by Conservation Voters NM: “The Energy Transition Act (Senate Bill 489) sets a nation-leading increase to our clean energy standard, known as the Renewable Portfolio Standard (RPS), to 50% by 2030 and 80% by 2040 and 100% carbon-free by 2045; directs about $40 million to help San Juan County communities and coal mine workers thrive and transition after the shutdown of the San Juan Generating Station; and creates local workforce training programs for traditionally disenfranchised communities and apprenticeships in labor union jobs. The bill enables a financial tool called “securitization” which will ensure ratepayers get the best deal when coal plants close and maintains the Public Regulation Commission’s authority to approve of use of the tool to ensure ratepayers are protected.”

NM Energy Grid Modernization Roadmap (House Bill 233) of 2019 (full text) directs the Energy, Minerals and Natural Resources Department to develop a strategic roadmap for updating the state’s electric grid. The bill also creates a competitive grant program to support local communities in implementing grid modernization projects. The grant fund would be supported through appropriations, gifts and donations.

According to one of the bill’s sponsors, “The purpose of the fund is to help spur innovation at the local level in our communities, whether that’s a rancher community in northeastern New Mexico, or a pueblo along the Rio Grande corridor or elsewhere, or a community served by a rural coop up north — so that they could apply for and work with [the grants] in order to experiment with grid modernization technologies.” A third piece of the bill would enable investor-owned utilities in the state to submit grid modernization projects to the Public Regulation Commission for review and approval.

Solar Incentives: For a complete (and frequently updated) review of state renewable energy incentives, North Carolina State University’s Energy Technology Center hosts the DSIRE Database of State Incentives for Renewables and Efficiency — see the NM Incentives there.

Tribal Policies

The All Pueblo Council of Governors passed a renewable energy Resolution in 2018 (Resolution No. APCG 2018-32) to affirm “Support for Renewable Energy Legislation to Benefit the Pueblos, New Mexico, and Planet Earth in the 2019 New Mexico Legislative Session.” The Resolution endorses many progressive policies, including Community Solar (see below).

The Future of Community Solar in NM

Community solar allows multiple participants to share the cost-saving benefits of a single solar installation. It is a simple tool that provides everyone, regardless of income or property ownership, the opportunity to choose local, reliable, and cost-effective clean energy. 19 states have already passed laws enabling community solar programs.

Community members – individuals and businesses – are able to purchase a subscription for solar energy from a community solar facility. The energy produced is then credited to the subscriber’s electricity bill. They receive a bill credit for the energy produced by their solar subscription.

Community Solar is especially useful for renters, occupants of multiple-unit dwellings, those with a weak credit history or unable to afford the full up-front costs of solar, and homeowners whose roofs don’t permit rooftop PV installations. It is expected to be of particular value for many of NM’s Native American communities.

State legislative action is required to enable this form of ownership and interconnection to the power grid, and it is not yet permitted in NM. A strong effort was mounted in the 2020 legislative session (House Bill 9), but failed on the House floor. Nevertheless, a Working Group was established by Senate Memorial 63 in that session, “Requesting the New Mexico legislative council to arrange for a third-party facilitator to convene a working group to review statewide community solar initiatives and develop recommendations for implementation of those initiatives.” This working group is active as of September 2020.

In addition, a Tribal Community Solar Task Force as a voluntary subgroup of the larger working group works to discuss community solar as it applies to Tribes’ needs and concerns. The goal of the Task Force is to collectively gather Tribal input for the working group and to develop an outline of the bill that can be presented to legislators for review and endorsement during interim committee hearings.

Further efforts are expected in subsequent sessions (see Advocacy, below), and advocates are optimistic that community solar can be brought to NM soon. The Coalition of Sustainable NM Communities provides this Community Solar overview and FAQ, and Vote Solar this Jobs and Economic Impact analysis, from the 2020 campaign.

Federal Policies

The Tribal Energy Preference of the Energy Policy Act of 2005 specifies a tribal preference for federal agency procurement of energy supplies. However, a 2017 General Accountability Office review found that the three primary federal agencies with authority to enter into energy contracts with tribes – the General Services Administration and the Departments of Defense and Energy – have not used the tribal preference since it was established. Obstacles include proximity of generation resources to the end-use site, and availability of adequate transmission line capacity, and conflicting requirements to purchase energy from the lowest-cost or local utility provider in some jurisdictions. Nevertheless, this preference could be useful as part of a well-developed strategy.

Investment Tax Credit: The Solar Investment Tax Credit (ITC), enacted in 2006, is a 26% tax credit for solar systems on residential and commercial properties. The commercial credit can be applied to both customer-sited commercial solar systems and large-scale utility solar farms. Congress passed a multi-year extension of the ITC in 2015 on this phase-out schedule: 26% in 2020, 22% in 2021, 0% residential and 10% commercial in 2022 (download the Solar Energy Industries Association fact sheet).

Although tribes with no federal tax liability cannot utilize these incentives directly, third-party commercial energy developers can often monetize them and share some of that benefit with the tribe, optimally via Power Purchase Agreements (PPAs). 

Future Incentives: In addition to these current federal policies, planners are encouraged to monitor new federal initiatives (particularly as part of the ongoing COVID-19 economic stimulus measures) designed to support infrastructure development and renewable energy (e.g., proposed extension of solar tax credits, infrastructure finance appropriations). 

Take Action! Advocacy for Supportive Legislation

Those interested in supporting efforts to pass legislation to accelerate the deployment of renewable energy, including projects in Indian Country, can contact the following:

Image courtesy of New Energy Economy

In particular, and as noted above, Community Solar is expected to resurface in subsequent legislative sessions after a disappointing defeat in 2020, and would have a strong positive impact on small-scale solar development in Indian Country. Advocacy efforts from affected communities will be important to passing this legislation.