In order to get power producers to do their part in reducing carbon dioxide emissions, federal and many state regulations require a certain percentage minimum of renewable energy sources.
New Mexico, for example, uses a credit system to keep track of how much renewable energy power producers are using. Under the law, which was just signed, not even a year ago, 1kWh or solar, wind, or geothermal energy, for example, counts as one credit. The more kWh of renewable energy the power producer uses, the cleaner the utility is, and the clearer the air is. As the law stands, utilities need to already be at 10% renewable, upping that percentage to 15% in 2015. By 2020, New Mexico utilities need to be at least 20% renewable.
Don’t forget, though, that the percentage is in credits. Utilities striving to meet the 10% renewable energy standard buy and redistribute energy from solar power plants. Imagine that the annual output of Utility A is 100,000kWh. In order to meet the standard, they’d have to collect 10,000 credits or use 10,000kWh of renewable energy, that is, until the New Mexico PRC [Public Service Company] basically hamstrung the law with a new amendment.
In a recent vote, the New Mexico PRC didn’t change the percentages of renewable energy credits required, but how much each kWh is worth in credits. For example, 1kWh of wind power is still worth one credit, but 1kWh of solar power will be worth 2 credits, and 1kWh of any other renewable, such as biomass or geothermal, will be worth 3 credits. Essentially, this means that Utility A could use as little as 3,333kWh of renewable energy and still get credit for 10,000. Solar power producers and other renewable energy producers will suffer decreased demand and, well, “Way to go, New Mexico.”