EPA carbon rules could force changes in New Mexico

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ALBUQUERQUE, N.M. (AP) — New Mexico gets most of its electricity from coal-fired power plants, but new federal guidelines aimed at reducing pollution could mean changes for the state and higher electricity rates for customers, state officials said Monday.

The Obama administration's long awaited proposal calls for curbing carbon dioxide emissions at power plants nationally by nearly one third over the next 15 years. Each state is required to come up with a plan for reaching specific goals set by the U.S. Environmental Protection Agency. Some states will be allowed to emit more pollutants and others less.

The EPA wants New Mexico to aim for a 33 percent reduction of 2012 levels, when power plants in the state emitted some 16 million metric tons of carbon dioxide.

Meeting the federal standards will be challenging for New Mexicans, who get more than two-thirds of their electricity from coal-fired plants and another quarter from natural gas-fired plants, both of which emit carbon dioxide.

Still, New Mexico Environment Secretary Ryan Flynn said the state is in a good position to meet the standards thanks to a recent agreement brokered by Gov. Susana Martinez's administration, the state's largest electric utility and the EPA to shutter two units at a major coal-fired power plant in northwestern New Mexico.

The agreement targeted haze-causing pollution at the San Juan Generating Station, but carbon dioxide emissions will also be reduced by half as a result.

"On one hand, I'm pleased that we appear to be well positioned," Flynn said. "On the other hand, I still remain concerned about impacts to consumers. There's no question that EPA's action is going to result in increased costs for electric generation around the country."

U.S. Rep. Steve Pearce, R-N.M., was among the lawmakers arguing that the regulations will cost the economy billions of dollars and hundreds of thousands of good-paying jobs while having a marginal effect on global carbon emissions.

"The president and the EPA are using these regulations to force states into using cap-and-trade systems that could not even pass in the Senate with a filibuster-proof Democratic majority," said Pearce, co-chair of the Congressional Western Caucus. "The administration's radical war on coal is nothing more than a war on the poor."

In New Mexico, roughly 20 percent of the population lives below the poverty line. This will be a consideration, Flynn said, as the state crafts its plan and weighs how the costs of pollution control equipment, efficiency improvements and more investment in renewable energy will be passed on to customers.

The EPA disputed that energy prices will increase due to the guidelines, and some environmentalists said the state and federal government need to do even more to curb pollution.

U.S. Sens. Tom Udall and Martin Heinrich, both New Mexico Democrats, said the guidelines will help address climate change. They said persistent drought, larger wildfires and threats to agriculture are already problems in New Mexico.

"The time has come for us to act in the best interest of our children and all future Americans," Heinrich said.

Officials with the state's largest utility, PNM, said they are ready to work with the state as it crafts a plan to meet the standards.

PNM already has plans to replace some of the lost electricity from San Juan with nuclear-generated power and another 40 megawatts of solar. Yet, a recent filing by the utility to address the possibility of purchasing more coal power to meet demand has angered environmentalists who are pushing for the closure of San Juan.

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