Energy transition: Oil & gas taxes to fund solar

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Let’s take a moment to sit down and discuss everybody’s favorite topic in the world, the very topic that led to the foundation of this big beautiful country: and in particular, severance taxes. For anybody wondering, severance taxes are imposed on the extraction of non-renewable natural resources that are then shipped out of their state of origin. Today, that place of origin is the great state of New Mexico.

This is all because Representative Sheryl Williams Stapleton (D) has introduced a bill, House Bill 289, which would require that no less than 1% of the state’s severance tax revenue be used toward renewable energy development. What’s more, HB 289 requires that all of this development be done within the state, which means no power contracts for energy from neighbors in California and Arizona. Sorry guys.

Similarly to renewable portfolio standard (RPS) policies, the language behind what passes as renewable under this legislation is important. In HB 289, solar, wind, geothermal, and biomass are all defined as renewable. Oh and speaking of RPS initiatives, it is likely that few of the projects that would be developed under this legislation, pending its passing, would contribute to the state’s RPS initiative, as it would be quite a crunch to develop before the 2020 deadline. And, since we’re on the topic, that initiative calls for 20% of the electricity sold by investor-owned utilities to be generated from renewable energy sources, with a 10% requirement for rural electric cooperatives.

However, there is at least one bill in the state legislature to extend that standard, so stay tuned.

And don’t think that just because it wasn’t listed above that Rep. Stapleton forgot about our old pal energy storage. HB 289 defines “renewable energy project” as any which serves the purpose of generation, transmission or storage of renewable energy, which means that we can anticipate to see some level of solar + storage queueing for incentives if this legislation passses.

It’s been a busy seven days for solar legislation in New Mexico, as last week a bill establishing community solar in the state passed the House. And there are many more bills which we at pv magazine are tracking, so stay tuned.