New Mexico has recently signed legislation pushing the state toward 100% of electricity coming from CO2 free sources, and 80% of that coming from renewables.
The measure requires that investor-owned utilities and rural electric cooperatives get at least half of their electricity from renewable sources by 2030. That would jump to 80 percent by 2040. A 100% carbon-free mandate would kick in five years later for utilities. That means there’s going to be a lot of wind and solar power in the state.
New Mexico legislator, Senator Michael Padilla (D) of Bernalillo County, has submitted the Renewable Energy Production Tax Act to the state legislature. The document seeks to create a 2.5% renewable energy tax whose purpose is to fund early education within the state. The tax will be applied to the wholesale value of the electricity at time of production, and will be based upon the monthly average price.
Renewable energy includes solar, wind, hydropower, geothermal or biomass. Biomass is defined as small diameter timber, salt cedar and other phreatophyte or woody vegetation removed from river basins or watersheds, landfill gas and anaerobically digested waste biomass.
There are a list of exceptions to this tax, making it the “utility-scale” tax:
- The United States or any agency, department or instrumentality thereof
- The state of New Mexico or any political subdivision thereof
- Any Indian nation, tribe or pueblo activities or transactions occurring on sovereign territory
- Personal consumption of the producer, including any excess production of electricity not consumed by the producer that does not exceed 500 kilowatt-hours in a 24- hour period
The document doesn’t specifically note the early childhood programs to be funded, noting in section 8:
The “early childhood program fund” is created as a non-reverting fund in the state treasury. The early childhood education and care department shall administer the fund. Money in the fund is subject to appropriation by the legislature for early childhood education and care services and programs.
SEIA shows about 836 MW of solar power installed in New Mexico. The EIA says approximately 711,000 MWh of non-hydroelectric renewables were generated in the state in September of 2019.
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The tax won’t realistically apply to rooftop solar PV, as it only applies to power fed back in excess of a half a megawatt.
It could be considered good news that utility scale PV is profitable enough to be taxed.
If you are going to create a tax on electricity create a tax on all electricity not just RE.
Eventually it is all going to be RE, but why single out RE thus giving coal yet another subsidy.
Could it be that Senator Michael Padilla has a coal and/or NG plant in his district?
According to the state website, there are much higher taxes on coal, uranium, and on the use of geothermal resources taken from the ground. In some places, wind and solar installations’ value is subject to property tax. Why NOT tax utility-scale solar?
There are retail taxes on all electricity at point of use in a lot of places, probably in New Mexico as well.
As the ‘transition’ progresses, where else will the money to run everything come from, than the profits of successful enterprise?
So, all in all the “carbon tax” is dead and Comrade Michael Padilla wants to tax the “most viable” replacement for typical fueled generation. This is no more than a cheesy end run around ‘previously’ acceptable alternative energy programs and the tax advantages used to justify adopters to use the technology. Just another attempt at the Californication sun tax proposed back in 2004. As SB18 is written, it sounds O.K.. This would be an increase of the wholesale electricity rate of about 0.1 cent per kWh the ratepayers will pay for their electricity. The problem and continuing usury of the public will be the “final” bill voted on. Right now it seems the bill specifically determines: “RELATING TO TAXATION; ENACTING THE RENEWABLE ENERGY PRODUCTION
TAX ACT; IMPOSING AN EXCISE TAX ON ELECTRICITY GENERATED FROM
RENEWABLE ENERGY RESOURCES; DISTRIBUTING REVENUE FROM THE TAX
TO THE EARLY CHILDHOOD PROGRAM FUND; CREATING THE EARLY
CHILDHOOD PROGRAM FUND.”
The problem comes when the “final draught” is voted on and some committee has added a ‘rider’ or ‘spot bill’ to move this money into say the State’s General Fund. Or perhaps a bill providing monies to a program that would build a bridge to nowhere. This is the REALITY of politics and taxes. Use children to hide behind the ‘reason’ for the tax increase and at the last moment change the course of the money collected and put it somewhere other than early education funding. Wow, that sounds great, (just) 0.1 cent per kWh more and be able to fund early childhood development. It will be the wording at the end of the committee process and what ‘other’ riders will make it into the bill that will determine the actual amount the ratepayer is taxed and where it will go, children’s early education or the State’s General fund.
I don’t think that implying the senator is a communist adds to the debate. As Reagan once explained, it moved, so he proposed taxing it. It’s disappointing perhaps, but not surprising, and definitely not Communistic.
And as to the second paragraph, hopefully anyone old enough to vote would understand that the tactics of P.T. Barnum were adapted from the political arenas that never abandoned them. Now maybe this bill could be funded by another tax on coal consumption, but not forever, right? Not after it’s mostly un-needed except as (by then) expensive, occasional, backup power.
Perhaps a better tax-to-societal-cost match would be the taxation of solar PV based on the estimated decommissioning, recycling, and clean-up costs. It would shut off the yapping about Cadmium Telluride and other thin films’ toxicity as a reason to oppose solar PV in general. Better yet it might slow or stop their manufacture altogether, and begin to fund the cleanup and replacement with non-toxic silicon based syatems.
I agree with this. We have a tax for the disposal of things like tires. We should have a tax on the disposal of every product based on how hard it is to recycle it.
Is that the ONLY point you could glean from my post? Really? First Solar has had a cradle to cradle program for its CdTe panels since the late 1990’s.
“…a better tax-to-societal-cost…” Now that’s a little “progressive”, ‘Comrade’?
First Solar is not the only company making thin films. And companies that appear to be solid and that could be expected to be around for ages, can go under. Especially when a new disruptive technology supercedes theirs. Especially when new sales fund old obligations. Like recycling or warranty.
Kodak, Xerox, Trident Exploration..