Jul. 26—The process of setting up new energy resources that help power New Mexico could be delayed by nearly four months, a result of recently updated federal policies.
The challenges reflect broader barriers the energy industry is facing now in selecting and deploying future intermittent renewable sources under a second Trump administration set on making cuts to renewable energy tax credits while propping up oil and gas. Even so, experts say the changed policies will only slow down — not stop — a clean energy transition that has been decades in the making.
The nation is also facing an increased demand for energy in the coming decades, due to economic growth, advanced manufacturing and technology like data centers and artificial intelligence.
President Donald Trump, on July 4, signed the “One Big Beautiful Bill Act” and approved phasing out certain federal solar and wind project tax credits toward the end of the decade. The new timeline ends the credits faster than initially set in law.
“For too long, the federal government has forced American taxpayers to subsidize expensive and unreliable energy sources like wind and solar,” Trump wrote in a July 7 executive order about the tax credit revisions. “… Ending the massive cost of taxpayer handouts to unreliable energy sources is vital to energy dominance, national security, economic growth and the fiscal health of the nation.”
The impending lack of incentives will lead to higher energy costs, Harry Godfrey, managing director of Advanced Energy United, said at a press conference on Monday. But, he added, it doesn’t equate to the death of the renewables industry.
“We’ve been here before,” he said. “We’ve seen this sort of volatility and variation in the market and policy, and we’ve endured that even when we had less developed technology and a less mature industry here. We are built to endure, sustain and continue to grow in this.”
The same is true of New Mexico’s market, according to Sheila Hallstrom, regulatory principal at Advanced Energy United. She told the Journal that energy fundamentals and economics still favor renewables. The high number of sunny and windy days in New Mexico lends well to solar and wind technology.
Still, Hallstrom said, states are feeling the impact of the “One Big Beautiful Bill Act” faster than she expected.
A few days after Trump signed the bill, Public Service Company of New Mexico filed a request with the New Mexico Public Regulation Commission asking for additional time in its ongoing resource selection case, partly because the change in federal policies will impact bid pricing. PNM asked for 120 extra days to evaluate resource bids.
A PNM spokesperson said the utility will continue to evaluate future projects through an independently monitored process “that considers cost and other factors when determining the best resources to meet customer needs.” The utility is still on track to meet its 100% carbon-free goal by 2040, and is currently 72% carbon-free.
The PRC hadn’t approved or denied the deadline extension request as of Wednesday.
“For PNM to already have submitted a motion to extend the time to review their bids — and not just a brief extension of time, but doubling the entire time — is pretty shocking, and I think it really raises the alarm that this isn’t just the end of this,” Hallstrom said. “We’re going to keep seeing this in New Mexico and in other states across the nation. So, it’s definitely concerning.”
In response to a separate Journal inquiry, a PRC spokesperson said, “It’s too early to speculate about any potential effects on New Mexico’s utility providers and their customers,” though the state agency is monitoring the federal policy shifts closely.
Similarly, Southwestern Public Service Co. President Adrian Rodriguez said Xcel Energy is still evaluating the federal legislation. Xcel Energy serves towns and communities in the eastern part of New Mexico, from Carlsbad to Clovis.
“While we would have liked to have seen some production tax credits last even longer, there’s a good opportunity for us to have renewable generation as part of our portfolio,” Rodriguez said in an interview.
Xcel Energy announced 17 new power projects in its New Mexico and Texas service areas earlier this month, including two solar projects added to meet New Mexico’s 50% renewable energy generation requirement by 2030.
The company anticipates that increased electrification, along with oil and gas industry expansion, will add up to $5 billion in economic impact over five years.
“Many of our oil and gas customers … are not only growing, but they are electrifying their existing resources, and as a result, we need to increase our generation in order to meet their demand,” Rodriguez said.
Knowing that energy demand is only growing, Hallstrom said, ongoing political uncertainty provides an opportunity for utilities and state leaders to better coordinate on future operations.
She added that New Mexico could better take advantage of existing technologies, like load shifting and flexibility. That can include activities like using less electricity at peak energy periods, which PNM estimates is between 6 and 10 p.m.
“Even if we’re operating in this confusing, hostile environment, there’s still such an opportunity to welcome these renewables and really bring on a lowest-cost, long-term resource for New Mexico’s future,” she said.
There’s also still a clear path for renewables other than solar and wind to get tax credits, Godfrey said, specifically referencing geothermal, hydrogen, advanced nuclear and storage.
“But let’s be clear about what’s been done here: This is a step away from a … clean, all-of-the-above approach,” he added. “The government may not be picking winners here, but it is certainly picking losers.”