Paid for by New Mexicans for Michelle, Deborah Armstrong Treasurer.

NewMexico’sFutureasaCleanPowerLeader

NewMexico’s economywasbuilt on itsposition as a leading energyproducer, andwe remain aleadingenergysuppliertothenation.Butascleanenergyemergesastheleadingpowersourceofthefuture,weareatriskoflosingourroleasaleaderinenergysupply.

Weareataturningpointinthestate.Intelisshrinkingitsworkforce.Coaluseisdeclining.Oilandgasproductiondependson factors such as fluctuating commoditypriceswe cannot control. Thenegativehealthandclimate impactsassociatedwithcarbonemissions fromcoal-firedgenerationare well documented and electricity generated from coal is becoming less competitive with thelowercostsofwind,solar,andthecomplementaryuseofnaturalgas.By2040,renewableenergywillovertakecoalasaglobalsourceofpower,atrackthatwillforcetheU.S.tomakechangestoitsenergy sector. As PNM and other energy providersmove away from coal generation,weneed acomprehensivestrategytoreplacetheenergyandplanfornewjobsintheFourCorners,includingtheNavajoNation.ThisstrategymustpaycloseattentiontohowNewMexicokeepsstableprices–toavoidincreasingthepowerbillsofthosewhocanleastaffordit–andensuresareliablesourceofpowerforallNewMexicans.

This is an opportunity for New Mexico to embrace clean energy as our economic future. NewMexicohassomeofthehighestqualityrenewableenergyresourcesinthecountry.Weranksecondnationwide for solar potential thanks to the number of sunny days we enjoy and our higherelevation. Our wind resources are among themost abundant in theWest.We have world-classgeothermalresources.

The state has all the elements necessary to be a leader in renewable energy, clean technology,energy efficiency and clean energyproduction.Weare locatedat the intersectionof threeof themajor electricitynetworks that connect the lower48 states, and three interstate regionalpowermarkets.NewMexicoisalsoclosetodemandcentersliketheborderandlargeutilitycompaniesinnearbystateshungryformorerenewableenergythantheycanproducethemselves.Wehavetheintellectual capacity at our national laboratories and universities, and existing oil and gas wellsprovideeconomicalaccesstogeothermalresources.CleanpowercanbecomeoneofNewMexico’slargestcashcrops.

We can attract approximately $10 billion in renewable energy investment - a development thatwoulddramaticallyboostthenumberofhigh-wage,cleantechnologyjobsinNewMexico.Butwe

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cannotaffordanother four yearsof inaction.We cannot slip furtherbehindour competitors.Myadministration will make clean energy a cornerstone of our economic development efforts andbuild up this important sector through policy, economic development, and job training. Asgovernor,Iwillworktodiversifythetypesofenergythatweproduceanduse,drivedevelopmentofnewenergy technologies thatproduce goodpaying jobs, andmakeNewMexico a low carboneconomy.

AnIdealFoundation:NewMexico’scurrentandfutureleadershipinenergy

NewMexicohastraditionallybeenaleadingenergyproducer.Oureconomyisbuiltonit.

● NewMexicoistheseventh-largestnetsupplierofenergytothenation,primarilybecauseofpetroleum,naturalgas,naturalgasliquids,andcoalproduction.

● The state is the largest petroleum producer among the eight Rocky Mountain states,producingmore than4%of thenation's crudeoil, and is a top-10natural gas-producingstate,providing4%ofthenation'stotal.

● TheBureauofLaborStatisticsreportsabout5,500peoplewereemployeddirectlyinNewMexico’soilandgasextractionindustryin2016.

● AccordingtotheSolarFoundation’sannualstate-by-statejobscensus,2,929NewMexicanswereemployedinsolar-relatedjobsin2016,upfrom1,899inits2015study.

● AstudybytheAmericanWindEnergyAssociationfoundthatwindenergysupportsmorethan1,000jobsinNewMexico.

Meanwhile,therestofthenationisrespondingtochangingglobalenergydemandsandhasacceleratedthetransitiontorenewableenergy.

● Clean, renewable energy is a major growth-industry worldwide. The U.S. EnergyInformation Administration estimates that renewable energy will overtake coal as thedominantsourceofelectricityworldwideby2040.

● TheTrumpAdministration’swithdrawal fromtheParisclimateaccordwillnotaffect thistrend.Morethanadozenstatesandalmost400U.S.citieshavealreadypledgedtocontinuepursuingthegoalsoftheParisaccord, includingAlbuquerque,LasCrucesandSantaFe.Amajority of Americans live in communities participating in the agreement. Demand forrenewableenergywillcontinuetogrow.

Inordertoremainaleadingenergystateandgrowmorejobs,NewMexicomustdiversifyitsenergyportfoliotomeetthegrowingdemandforcleanenergyandloweremissions.Inaction

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bytheMartinezAdministrationhasleftusfallingbehindotherstatesinpursuingrenewableenergyandcleantechindustries.

● Thecleanenergyandcleantechindustriescanprovideawiderangeofgood-payingjobs–notjust for engineers designing and inventing new technologies, but also in construction andmanufacturingofthefacilities,components,anddevicesthatwillbeincreasinglyindemandbybusinessesandconsumersaroundtheworld.

● NewMexicowasoneofthefirststatestoadoptarenewableportfoliostandard(RPS)in2007whenitvotedtoachieve20percentofitspowerfromrenewablesourcesby2020.Sincethen,other states have adopted increasingly aggressive standards and New Mexico has slippedbehind.WhileNewMexico stands still, other states areusing farmore aggressive renewableportfoliostandardstodriveprogressinupgradinggrids, investinginnecessaryinfrastructureanddiversifyingenergysources.

● NewMexicohastherawmaterialstosurpassnearbystatesandbecomeanationalleaderin clean energy.With the right leadership, renewables can become one of New Mexico’sbiggest industries. We have high-quality renewable resources that can meet demand forrenewablepowerathomeandthroughouttheregion.

● Solar

o New Mexico is nowhere near its potentialsolarcapacity.Itisoneofthesunnieststates,butranks15thininstalledsolarcapacity.NM’ssolar capacity currently is 685MW,generating 3.81% of the state’s electricity.This may increase by as much as 1,546MWover the next five years, a250% increase inNM’s solar capacity, and still well below itspotential capacity. Further, solar energysupports peak load because it is generatedduringtheday,andiscomplementedbywindproductionwhichisstrongestatnight.

o With solar providing 29.5 percent of newelectric generating capacity in 2015, for thefirst time, it beat natural gas capacityadditions.Thereisplentyofroomtogrow.

o TheNationalRenewableEnergyLaboratory(NREL)estimatesthatNewMexicohasthetechnical potential to develop7,087 GW of rural utility-scale solar – a capacity thatwouldgenerate16millionGWhannually.

NewMexico’shighelevationandhighnumberofsunnydays,makesthestatesecond,behindonlyTexas,intotalconcentratedpotentialforsolarpower.(NREL)

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● Wind

o IneasternandeastcentralNewMexico,windspeedsaverage8to8.5meterspersecond(m/s) – speeds significantly higherthan those in nearby states likeArizona and California. These windresources can meet demand in thestate and produce enough extra toexportwindenergy toCaliforniaandother states in need of morerenewablepower.

o NRELestimatesthatNewMexicohassufficient “windy landarea” to install490 GW of wind energy, generating1.6 million GWh annually. Forcomparison, New Mexico consumesapproximately 23,000 GWh ofelectricityannually.

o New Mexico’s current installedcapacityis1353MW,with1058MWindevelopment and 743MW in“advanceddevelopment.”

o Projects now underway at Broadview(Clovis,324MW),ElCabo(TorranceCounty,300MW),andSagamore(RooseveltCounty,522MW)willproducethousandsofconstructionjobs,hundredsofpermanentjobs,andmorethandoublethestate’swindproductioncapacity.

o Adding 6 GW of wind in New Mexico would create approximately 15,000 direct,indirect, and induced jobs in construction and support 1,400 direct, indirect, andinducedpermanentjobs.

o NewMexicoiswellpositionedtomeetthedemandforadditionaltrainedworkers.Wecan expand and replicate training programs already in place to help students andenergysectorworkersprepareforcareersincleanenergysuchastheoneatMesalandsCommunity College. Job retraining programs like its occupational certificate can takejust15weeks,whileanassociate’sdegreecanbeearnedintwoyears.

NewMexico’swindpotential,particularlyintheeasternpartofthestate,isoneofthehighestinthenation.(NREL)

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MovingForward:TowardaGreenEnergyEconomy

Weneedleadershiptogrowourrenewableenergy,cleantechnologyandsustainabledevelopmentcapacity.AsGovernor,Iwillprovidethenecessaryleadershipbyintroducingpoliciesthatsupporteducation,researchanddevelopment, investment,andcommercialization.TomakeNewMexicoanationalleaderincleanenergyandcleantechnologies,weneedtofocusonfourareas:

1. Increase thedemand for clean energywithin our state.Wewill do this primarily byrequiringourpowerproviders tomeet increasingstandards forcleanenergyuse intheirgenerationmix.Andwewillalsoexpandtheirmarketsforsuchcleanenergybymakingiteasiertoexportittootherstates.

2. IncreasethesupplyofcleanenergyhereinNewMexico.Wewillprovideincentivesforwindandsolarproductionandencouragebusinesses,homeowners,farmers,andrancherstoproduceit.Wewillmandatethatnewstategovernmentbuildingshavesolarinstalledonthem and retrofit existing ones that can support it. We will encourage our utilities tosupport a more competitivemarketplace by partnering with private companies that canhelpcost-effectivelymeetrenewableenergydemand.

3. Spurothercleanindustriesandtechnologiesinourstate.We’llencouragehomeownersandbusinesses to install energy-efficiency and conservation technologies, and incentivizeutilitiestosupportenergyconservation.

4. Tackle the transportation sector, a major producer of greenhouse gases. We’llpromote thepurchaseanduseofelectricvehicles inourstate, inorder tohelpmake itacenterofthatgrowingindustry.ThiswillrequirethedevelopmentofEVchargingstationsthroughout the state aswell as exploringotherways tohelp expandadoptionof electricvehicles.

Increasingdemandforcleanenergy

Demandforcleanenergyandtheindustrywillonlycontinuetogrow.Toensureasmoothtransitiontorenewablepowerandencouragecleanenergyproduction,weneedtodeveloparobustandreliablemarketbycreatingasmuchdemandaspossible.IwillworkwiththeLegislatureandstakeholdersontaxpolicytoencouragetheuseofrenewableenergy,aswellasthedevelopmentofnewtechnologieslikeenergystorageandkeeppacewithinfrastructuredemandslikemoresolarinstallationstoensureaccessibility.

● IncreaseandexpandNewMexico’sRenewablePortfolioStandards(RPS):TheRPSisoneofthemosteffectivepolicytoolsavailabletothosewantingtobuildacleanenergyeconomy.In

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thelastfiveyears,thecostofwindhasdeclinedover60percent,andsolarcostshavedeclinedover50percent,theresultofRPSprogramsthathavehelpeddrivethespreadofcleanenergy.NewMexico’sRPSwaslastincreasedin2007andisoverdueforanincreasebeyonditscurrentgoalof20%by2020.Toremaincompetitiveandbuildanationalmarket,weneedtoaccelerateNewMexico’stransitiontocleanpower.AnaggressiveRPSwillhelpcontinuetodrivemarketdemand.Inmyfirstlegislativesession,IwillsupportlegislationtoincreaseNewMexico’sRPSto50%by2030,andwouldconsiderarequirementorgoalof80%by2040,solongasstudiesindicatethatcustomerbillimpactsarezeroorminimalandreliabilitycanbemaintained.

Ten states, including California, Colorado and Oregon currently have RenewablePortfolioStandardsat least5%higherthanNewMexico’scurrentrate.(NCCleanEnergy)

● Establish a regular process to update the RPS as warranted to ensure it continues to

drivedemand(and,hence,supply).AnRPSof50%by2030and80%by2040shouldbeafloor,notaceiling.Wemustcommittoaregularscheduleofrevisitingthestandardtoensureitkeepspacewithtechnologicalandinfrastructuresimprovementsandismosteffectivelydrivingdemand.AsNewMexico’sinfrastructureandtechnologiesadvance,wemustcontinuetodrivetowards100%cleanenergyforNewMexico.Aregularreviewofthestandardwillhelpachievethisgoalfaster.Asgovernor,Iwillorderthestatetoestablisharegularprocessforcomparingourgoalsagainstthe utilities’ annual power procurement plans and update the RPS to continue driving ourtransitiontocleanenergy.

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Nearbystatesareincreasingtheirrenewablestandardsportfolios.IfwedonotkeeppacethesestateswillhavegreaterrenewableenergygeneratingcapacitythanNewMexico.ByincreasingNewMexico’sRPSon a regularbasis,we canhastenmarket growthand remain competitivewithotherstatesjockeyingtobecomecleanenergyproducers.

● Expand the RPS to include customer-scale (“distributed generation”) minimum

requirementsforsmall-scale,customer-ownedsolarandwindsystems.AportionoftheRPS,20percent,shouldbemetbycustomer-scalesystems.Morejobsarecreatedwithinthesesmallsystemsanditacceleratesmarketdemand.

o ThecurrentrulefromthePublicRegulationCommission(PRC)thatdiversifiesthesource of renewable energy, including a 3 percent contribution from distributedgenerationshouldbemadelaw.

o “Distributed generation,” means something different to everyone. PRC andpolicymakers shouldworkwith the community to revisit this capacity level on aregularbasistoensureitiskeepingpacewithtechnologicaladvances.

● Join theWestern Energy ImbalanceMarket (EIM). Participation in regionalmarkets isessential,andwillprovideareliablemarketforourwindandsolarpower,creatingjobsinNewMexico.

Thecostofutilityscalesolarandwindhavedeclinedbelowcoal,gas,andnucleargenerationcostsinrecentyears.(Lazard)

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This voluntary market, managed by the overseer of California’s power system, CaliforniaIndependent System Operator, was established in 2014 to improve electric reliability andincreaseefficiencyacrosstheregion.EIMisdesignedtohelpensurethatthereisenoughsupplytomeetlocaldemandinrealtime.ThemarketincludesagrowingnumberofmajorutilitiesalongtheWestCoastandtheInteriorWestfromSeattletoArizona.Meanwhile,theFixtheGridCoalitionisadvocatingforaCAISOexpansion to streamline the Western markets; and the Mountain West TransmissionGroup, an informal collaboration of utilities from Arizona, Colorado, Montana, NewMexico,UtahandWyoming,isexploringhowtoimprovetheregionaltransmissionmarkets.Asmorestatescontinuetoexpandtheirportfoliostandards,thismarketwillhelpmatchsupplyand demandacross the region. ForNewMexico to become a leading producer of renewableenergy,participationinthismarketisessentialasitprovidesareliablemarketand improvestheeconomicsofwindpower.

● Leverage our growing clean energy supply to attract new employers. Facebook’s data

center in Los Lunas is an example of the rapid growth in corporate renewablepurchases. Facebook is not the only major corporation committed to sustainable businesspractices,andwhoareseekinglocationswheretheycanprocureclean,sustainablerenewableenergy.

AccordingtoPWC,oneofthebiggestgrowthareasintherenewableenergymarketplaceinthe

lasttwoyearshasbeencorporaterenewablespurchases.PWCconductedasurveyand foundthat 72 percent of companies are seeking more renewable energy as they try to meetsustainability goals, reduce greenhouse gas emissions, and limit exposure to energy pricevariability.

NewMexicohas thepotential toproducemorepower thancanbeusedathome,making thestateanideallocationforcompanieswithsignificantpowerneeds.IwouldpersonallyrecruitthesecompaniestobuildfacilitiesinNewMexicopoweredbyrenewableenergyanddirecttheEconomicDevelopmentDepartmenttoworkwithotherCabinetagenciesandstakeholdersonaprogramtomakethathappen.

● Commit the state to supporting responsible carbon action, and join the U.S. Climate

AlliancetoupholdthegoalsoftheParisclimateaccord.Tobealeaderincleanenergy,New

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Mexico must continue to drive clean energy production by supporting responsible carbonaction.Undermyleadership,NewMexicowilljointheU.S.ClimateAlliance,agrowingcoalitionof other states and Puerto Rico that will adhere to the goals set by the 2015 Paris ClimateAgreement. A market-based policy solution is the right approach, and I would work withstakeholderstodeterminetheappropriatevenueandapproachforsettingemissionlimits.

PNM’splantodecommissionthestate’stwolargestcoalpowerplantsoverthenextdecadeisjust one opportunity to cut emissions further. Both the San Juan and Four Corners Plantscontribute about 10 millionmetrictonsofCO2.Eliminatingbothoftheseplantswillreducethe state’s carbon emissionslevels. But industrial activity,wood and biomassconsumption, agriculture andother sources of greenhousegasemissionsremain,etc.

● Allowcommunitiestodeterminetheirenergyportfolio.Asgovernor,Iwillworkwiththe

PRCandstatelegislaturemodernizethestate’spublicutilitieslawstopromotecompetitionanddiversifythestate’senergysources.WemustdeterminehowaCommunityChoiceAggregation(CCA)programcouldbeadoptedinNewMexico.CCAprograms,likecommunitysolar,allowacommunity to produce or purchase (or both) electricity on behalf of its residents. Thecommunity determines its preferred energy portfolio, and by negotiating in bulk, is able toproviderenewableenergyatasavings.

● Launcha“NewMexico’sGotSol!”Campaign:NewMexicoshouldadoptanaggressive“New

Mexico’sGotSol!”publicoutreach,marketingandfinancingcampaign to increaseroof-topPVandsolarcarportdeploymentdramaticallyinthenext5years.

o Weshouldalsosetagoalof15percenton-sitesolarforcustomer-ownedpropertiesby2022,and30percentby2025.

o Customer-scale (homes and businesses) solar photovoltaics (PV) are now extremelycost-effective vis-à-vis electric utility rates, yet consumer uptake of PV is still slow.Residentialratesmayslowevenfurtherwiththerecentimpositionofa30percenttariffonsolarequipment.Settingagoalandincludingcustomer-scalegenerationintheRPSstandards,alongwithfinancialincentives,canhelpcounteractthefederalgovernment’s

PNM is decommissioning two of New Mexico’s largest coal power plants over the next decade. This is a rare opportunity to dramatically cut our carbon emissions.

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newtaxandcoulddramaticallyincreaseuse.o This program will provide information to customers on how to finance solar

installations.Ialsowillworkwithpublicandprivatefinancingorganizationtoexpandtheuseof low-interest loans for low-andmoderate-income familiesseeking toaffordsolar.

Increasingthesupplyofcleanenergy

Asdemandforcleanpowergrows,weneedtohelpbothlarge-andsmall-scaleenergyproducersthroughout New Mexico increase output and ensure reliable delivery to markets in state andthroughouttheregion.

● Gettransmissioninfrastructurenowbeingdevelopedonlineby2020toensurethatNewMexico’swindisnotstranded.Additional high voltage direct transmission lines are needed to deliver wind power fromeasternNewMexico to localandregionalmarkets.Developmentofsuch lineshasbegun.Butchallengesremain.TheProductionTaxCredit(PTC)issettoexpirein2020andwemustworkwithdeveloperstoensurethatprojectsalreadyunderwayareonlineasquicklyaspossibletoensurefullcrediteligibility.Asgovernor,IwillstrengthentheNewMexicoRenewableEnergyTransmission Authority (RETA) to facilitate development of renewable energy projects tomaximizetheiruseofthesecredits.

● ExpandaccesstoothermarketssothatsurplusenergycanbeexportedtonearbystateslikeCalifornia.NewMexicohasthepotentialtoproducemuchmoreelectricityviawindthanwhatthepopulationcouldconsume,puttingitinagoodpositiontoexportexcesswindpowertoothermarkets.In2015,CaliforniaincreaseditsRenewablePortfolioStandard(RPS)from33percentby2020to 50 percent by 2030. This year the state senate approved legislation to accelerate thestandard to 50 percent by 2026 and 100 percent by 2045. California’s homegrown solarcapacity cannotmeet these goals. The California2030 Low Carbon Grid andNREL’s BeyondRenewable Portfolio Standards have identified NewMexico wind as a valuable resource forCalifornia to affordably and reliablymeet its RPSgoals. The stateneedsNewMexico’swind,whichisproducedatatimeofdaythatcomplementsCalifornia’ssolarbyprovidinggenerationassolarrampsdownatsunset.

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● Ensurethatthestate’senergyinfrastructurekeepspacewithsupplyanddemand.Asthestate’scleanenergyindustrygrows,wemustensurethatthepowergeneratedmakesittothegrid,notjustforuseinNewMexicobutthroughouttheregion.NewMexico’s proximity to three of the nation’s regional transmission organizations, meansexcesspowercanbesenttootherstateslikeArizona,ColoradoandCaliforniawhichwillneedadditional clean energy tomeet their state’sRPS.ButNewMexico’s cleanpower canonlybeexportedtootherstatesifwecangetittomarket.

o Weneeda comprehensive transmissionplan to identify current gaps in transmission

and storage.Developedwith input fromRETA, thePRCandotherpublic, private andacademicstakeholders,thetransmissionplanwillprovidearoadmapformodernizingthestate’sdeliverysystem.

o We need to support the development of bulk electric transmission lines designed toexport renewable energy andworkwith communities and landowners to ensure thatsuchhighcapacitylinesaresensitivelysited.

o As governor, I also will order a review to determine if New Mexico’s geothermalindustry should be an approved power source for compliance with the state’s morerobustRPS.

● ExpandNewMexico’ssolarcapacityforuseinstate.NewMexicohasthetechnicalpotential

to develop 7,087 GW of rural utility-scale solar, which would generate 16 million GWhannually. Ourmost likelymarkets for surplus power - California and Arizona,which alreadyproduce more solar energy than they use at home – need New Mexican wind power aftersunset. By developing utility-scale solar to use here at home, New Mexico can reach itsrenewableenergygoalsandleavemorewindpoweravailableforexporttootherstatesintheregion.

● ExpandNewMexico’sincentivestodriverenewableenergydeploymentandtheadoption

ofenergyefficient technologies. Several importantstate taxpolicieshaverecentlyexpired,includingtheresidential/agriculturalSolarMarketDevelopmentTaxCreditandtheutility-scalerenewableenergyproductiontaxcreditthatexpiredattheendof2017. IwillworkwiththeLegislature and stakeholders to reform our tax policies to better encourage the use ofrenewableenergy,aswellasthedevelopmentofnewtechnologieslikebatterystorage.ThefederalRenewableElectricityProductionTaxCredit(PTC)andtheInvestmentTaxCredit(ITC),which spurred the development ofwind and solar power nationwide, have started to

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winddown.Stateincentivescombinedwiththefederaltaxcreditswillensurethatwecanmostaffordablytransitionmoreofourpowerplantstoclean,renewablesources.

Thisisespeciallytrueforsolarenergy.PresidentTrump’sill-adviseddecisiontoimposeanewsolartariff isexpected tobeadragon thesolar industry. Justhowmuch ithurtsadoptionofsolar,remainstobeseen,however,sincedemandforcleanenergyisstillgrowing.For New Mexico to remain competitive, it is even more important that we renew ourcommitmenttorenewableenergyandincreaseoursupportforsolar.Forexample,somestatesprovidemoregeneroussolarrebatesforhomeowners.NewMexicoiscurrentlyranked7thforfavorabilityofsolar investment,basedon12 factors includingstatepoliciessuchaspropertyand sales tax exemptions, rebates and tax credits, net metering, as well as local electricityprices.Weneedtorevitalizeincentiveslikethestate’sSolarTaxCreditprogramthatendedin2016.Itallowed homeowners and businesses to deduct up to 10% (capped at $9,000) of solarinstallationcosts.Theseincentiveswereassociatedwitha2,000percentincreaseinresidentialsolar installations alone between 2009 and 2014. New Mexico’s legislature is currentlyconsideringabill(HB87)whichwouldrestorethesolarcreditandgiveindividualsinstallingsolarintheirhomes,businessesorfarmsa10percentcredit,upto$9,000.Asgovernor,Iwouldbehappy tosignsuch legislation into lawandworkwiththelegislatureandprivatesectortokeepdrivingthissectorforward.We also need to respond to changing technologies and economies of scale. For example, theTrumptariffmaymakeConcentratingSolarPower(CSP)amorepricecompetitivetechnology.Asgovernor,Iwillworkwithindustryandcommunityleaderstoidentifyemergingtrendsandtechnologytomakesurethatstatepolicyallowsustorespondtosuchpossibleopportunities.Finally,thefull impactofthefederaltaxbillpassedinDecemberisstillunclearasdevelopersscrambletodetermineifchangeswillhelporhindertheeconomicsoftheirprojects.Wemust re-energize andenhance state incentives tomaximize thebenefit of federal creditswhile they are still available. Once the federal incentives are gone, state credits can helpcontinuedrivingourtransitiontoacleanenergyeconomy.

● Createapublic/privatefinancingmodeltoaddressfinancialconstraintsforbusinessesseekingtolowerbillsandemissions.Businesseshavesignificantchallengesfinancingsolar

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installations.IwillworktoexpandprogramssuchasPropertyAssessedCleanEnergy(PACE)tocoverenergyefficiencyimprovements,andworkwiththepublicandprivatesectorstoprovidemorefinancingsolutionsthatcanhelpreducetheheavyupfrontcostsofsolarinstallationsandsupportingtechnologieslikeenergystorage.

● Create more incentives for clean energy production in rural locations. New Mexico’snatural resources and unique geographyare ideal for renewable energy generation. Projectsshouldbeinstalledthroughoutthestate.

o OurRPSshouldencouragelocatingrenewableprojectsinruralareas.RecenteffortsinTaos have demonstrated the feasibility and cost-effectiveness of rural renewableenergy,withthecommunityontracktoreach100%renewabledaytimegenerationby2022andsavethecommunityover$50millionoverthenexttenyears.

o The state’s enterprise zones program should be enhanced to provide additional taxincentives for renewable energy projects. These incentives will include property taxabatement,andincreasingthesizeofexistingtaxcreditssuchastherural jobandjobtrainingcredits.Suchprogramshaveproveneffectiveinotherstates.

● Protectanddefendnetmetering.Customerswhogeneratemoresolarpowerthantheyuseshouldbecompensatedforthepowertheygenerateandaddtothegridatthefullretailprice.NewMexicoisoneof41stateswithastatewidenetmeteringpolicythatallowscustomerstoexport extra power onto the grid and earn credits against their power bill. Some investorownedelectricutilities(IOUs)havechallengednetmetering.Butaswemakethetransitiontocleanenergy,netmeteringisthesinglegreatestincentiveformakingPVfinanciallyviable.Weneed to keep this incentive intact.While theNewMexico Public Regulation Commission hasjurisdiction over the utilities, I will work with the legislature to ensure that net meteringremainsavailableandprovidesafaircreditforthosewhoputrenewableenergybackintothepowergrid.Iwillopposeanyeffortfromourutilitiestolimitoreliminateprotectionsfornetmetering.

PromotingefficientandcleanenergytechnologiesinNewMexico

Energy efficiency and conservation remain the most immediate and cost-effective ways to cutenergy costs, consume fossil fuels more efficiently and reduce carbon emissions. As the nationcontinues its move towardsmore sustainable development and clean energy, demand formoreenergyefficienttechnologiesandcleanenergysolutionswillcontinuetogrow.ForNewMexicotomeet itssustainabilitycommitments, strengthen itseconomy,andcreatenew jobs,wemust fully

pg. 14

support this emerging economic sector. As governor, I will promote such technologies in NewMexicobycreatingataxandinvestmentsystemthatencouragescommercializationhereathome.

• Promote the commercialization of various emerging technologies that support cleanenergy or lower emissions andmodernize traditional energy sources like oil and gasproduction to make themmore efficient and reduce greenhouse gas emissions. NewMexico iscurrentlya leader inoilandgasproduction.Asweexpandourportfolio to includecleanenergyalternatives,thestateisuniquelysuitedtobecometheprovinggroundforawidearray of emerging energy technologies. As governor, I will seek creative opportunities tosupportnewtechnologiesandinnovativesolutionsforeveryenergysubsector.Emerging technologies such as anaerobic digestion of agricultural waste, geothermal,small/microhydro,carbonsequestrationinagriculturalfields,wasteheatrecovery,andrelatedtechnologies hold the promise of increasing efficiency and reducing adverse environmentalimpact.NewMexicoisanidealtestinggroundforthesetechnologies,andweneedtosupporttheirdevelopment.NewMexicans also should receive the full benefit of developing all of ournatural resources,including oil and gas. To do this, we must ensure our lease rates are fair and in line withneighboring states, andmake oil and gas production as efficient as possible by limiting thewasteofnaturalgasresourcesduetoventing,flaring,andleaksfromoilandgasinfrastructure.

● Develop NewMexico’s homegrownmethanemitigation industry. NewMexico is ranked10thinthenationforjobsfocusedontacklingmethaneemissions.Failuretocapturemethane-theprimarycomponentofnaturalgasandadangerousgreenhousegas-islostrevenueforoilandgasproducersandNewMexicotaxpayers,andanenvironmentalthreattoourstate.

IthasbeenthreeyearssinceNASAfirstidentified the 2,500-square-milemethane cloud hovering over the SanJuanBasin.Eachyearwewasteabout$2billionofnaturalgas through leaksandintentional releases of methanenationwide – more than $100 millionworth of natural gas from federal andtriballandsinNewMexicoalone.

NASAscientistsrecentlyidentifiedagiantcloudofmethaneemissionsovertheFourCornersarea.Theyellowandred “hotspot”,ontheimageabove, isthelargestconcentrationofmethaneintheUnitedStates.(NASA/JPL)

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As governor, I willwork hard to addressmethane waste. I will put in place common sensestatewiderules torequireoilandgascompanies tocutmethanewasteandpollutionatbothnewandexistingwells.Byimprovingtheairqualityrequirementsofoilandgaswells,wecan

create more jobs inmethane mitigation, andbetterprotectourcitizensfrom the health risksassociated with this toxicgreenhousegas.

● Adopt decoupling rate structures. Traditionally, power rates are fixed and the utility’srevenuecomes fromhowmuchenergy it sellsatthatpricerate.Themorepower it sells, themore profit it makes. It is an economic structure that encourages more energy use anddiscourages interest in energy efficiency and investment in new technologies. It is time tochangethatoutdatedbusinessmodel.Weneedtoseparateconsumptionfromprofit–apolicyknownasdecoupling.Underthisratemaking structure, New Mexico’s utilities would annually submit revenue requirements andexpected sales to the NM Public Regulation Commission, which would then regularly adjustrates to reflect real sales. The commission sets the power rate by dividing sales into fixedrevenuerequirements.Theutilitiesstillmakeaprofit,butitisbasedonhowmanycustomersareserved,nothowmuchenergyissold.Excessrevenuesarecreditedbacktothecustomers.By separating (“decoupling”) energyusage fromprofit,we can ensure thatutilitiesprovide afairreturntoshareholders;whilegivingcustomersabreakinrates.The policy has proven effective. California first decoupled profits from consumptions in the1970sandnowcreditsthepolicyasthereasonthestate’senergyefficiencypolicieswork.Sincedecouplingwas adopted, energy use per capita has increased almost50 percentnationwide,whileCalifornia’spercapitaenergyusehasremainedrelativelyflat.

● Protect consumers by ensuring that power bills are affordable, and promote energyefficiency.NewMexico’saverageelectricityprice–about13centsperkilowatthour–ranks20thhighestinthecountry,butourstateis44thinmedianhouseholdincome.Andwithoneofthehighestunemploymentratesinthecountry,NewMexicansareparticularlysensitivetorateincreases. As Governor, Iwillwork to ensure that consumers are not burdenedwith higherrates. I also favor more support for low-income consumers to ensure they can afford basic

Methane mitigation companies have seen some 30% business growth in states with methane regulations. Jobs in this sector pay annual salaries of up to $113,110.

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energyservices,withoutthethreatoflosingaccesstoelectricity,andhaveaccesstoprogramssuchaslow-incomeweatherizationandenergyefficiencyimprovements.

● Createastate-levelLow-IncomeEnergyEfficiency(EE)RenovationsProgram.

o Energy efficiency renovations (weatherization improvements, windows, insulation,moreefficientfurnaces,appliances,etc.)reduceutilitybillsforthecustomer,createjobsforNewMexicansandreduceoverallenergydemandandcarbonemissions.

o We expect continued efforts to cut funding for the federal LIHEAP program. Ifsuccessful,itwoulddisproportionatelyhurtlow-incomehouseholdsbecauseofthehighproportionoftheirincomeusedforelectricandnaturalgasbills.

o NM Mortgage Finance Authority (NMFA) should administer a statewide low-incomeenergyefficiencyrenovationprogramsince ithastheexpertiseas the implementerofthefederalLIHEAPprogram.

● Use the state’s regulatory and tax programs to encourage broader adoption of energy

efficientandconservationtechnologiesandpractices.

o New Mexico should follow the example of other states by expanding its energyefficiencyresourcestandardinitsnextRenewablePortfolioStandard.

o Thesustainablebuildingincometaxcreditshouldbeincreasedandexpandedsomorebusinessesandresidencescantakeadvantageofiteachyear.

o NewMexico’sbuildingenergycodesmustbeupdatedtoensureNewMexico’sbuildingsaresustainableandreflectthelatesttechnologiesandindustrystandards.Iwouldcallon the Construction Industries Division to immediately start the process of updatingNewMexico’sbuildingcodesinconsultationwithallstakeholders.

● CreateataxandinvestmentsystemthatencouragescleantechcommercializationinNew

Mexico.o Improve and extend New Mexico’s Research and Development tax credit. The

currenttaxcreditprovidesgrossreceiptstax(GRT)incentivesforsmallbusinessesforwhichR&Dmakesupatleast20%ofexpenditures.

o Expand and improve the Small Business Assistance program. This successfulprogramprovidessmallbusinesses,providingupto$20,000inresearchsupportfromtheNationalLabs.Wewillfundandimprovetheprogramsothatbusinesseswithhighpotentialcanreceiveahigher levelof researchsupport.Wewillalsoworktocreateaprogramthatwillallowsmallbusinessestopurchasefurtherresearchassistance.

pg. 17

o Expand State Investment Council (SIC) New Mexico Private Equity Programinvestment, and coordinatewithour commercialization strategywhilemaintainingafocusonreturns.o TheSICprogramhashadamajorroleinencouragingventurecapitalinvestmentin

NewMexico,butthereismuchmoretobedone.o Direct the SIC to invest 9% (the greatest amount allowed under statute) of the

SeveranceTaxPermanentFundintoitsNewMexicoPrivateEquityProgram.o Encouragecoordinationwithcommercialization, industry,andventure investment

experts.o These investments are made in partnership with experienced private equity

investors,sothenearly$450millioninvestmentwillhaveamajorroleinpromotingresearchandcommercializationinNewMexicoinavarietyoftechnologiesincleanenergyandotherindustries.

● Develop a green energy workforce. New Mexico’s population provides an ideal mix ofworkerstofilljobsinthegreenenergyeconomy.NewMexicoispositionedtomeetthedemandfor workers, with training programs already in place to help students and energy sectorworkers prepare for careers in renewable energy. I will work with our schools and privatesector to grow these programsand ensure that NewMexicans have the skills and educationtheyneedtoworkinthisindustry.

New Mexico’s community collegenetwork, high schools andvocational programs shouldcontinue developing programs tomeet the needs of these emergingindustries.

MakeNewMexico’stransportationsectormoresustainable

Each year,more consumers aremoving to electric vehicles. Under theMartinez Administration,NewMexicofellfarbehindotherstatesinpromotingelectricvehicles.AsGovernor,Iwillworktoensurethatourresidentscanenjoytheloweroperatingcosts,higherfuelefficiencyratesandlowercarbonemissionsthatelectriccarsoffer.Undermyleadership,NewMexicowill:

● Build the infrastructure necessary to support greater usage of electric vehicles (EVs).

The number of solar jobs in New Mexico grew 179 times faster than the state’s overall economy in 2016.

pg. 18

NewMexiconeedstoexpandthecharginginfrastructurethatresidentsneediftheyaretouseelectricvehicles.

o NewMexico’sDepartmentofTransportation(DOT)andEnergy,Minerals,andNaturalResources Department (EMNRD) should work with car manufacturers and the localelectricutilitiestodeploycar-chargingstationsstatewide.

o NewMexicowill incentivizeexpansionofthecharginginfrastructurenetworkthroughgrants,rebates,andreducedelectricityrates–anapproachthathasproveneffectiveinotherstates.

● Facilitate the development of this infrastructure while maintaining wildlife, natural

resourceandenvironmentalprotection. WewillestablisharesponsivepermittingsystemandprovideadequatefuelingandelectricchargingstationsalongourInterstates.

● Usethestate’spurchasingpowertobuildtheEVmarketinNewMexico.Transitioningthestate’sautomotivefleettohybridandelectricvehicleswouldhelpjumpstartthestate’selectricvehicle market and lower carbon emissions. It would also improve the state fleet’s overallefficiency, air quality, and public health while saving taxpayers money and operating moreefficiently.

● Adopt enhanced emission standards for vehicles.As governor, Iwill support adoption ofenhanced standards for vehicles as away to promote clean technologies such as alternativefuels, advanced tire technology, engine adjustments and improved air conditioning systems.Tenyears ago,NewMexicowasa leader in fighting climate changewhen it adopted tougheremissions standards for cars that would have brought cleaner cars to our roads. But theMartinezAdministrationrepealedthatinitiative,leavingthestatebehindotherstatesindrivingwidespreadmarketadoptionoftechnologiestoreducetailpipeemissions.

● Attractbatterymanufacturersandotherenergystoragetechnologies.Thesetechnologies

helpaddresstheoccasionalintermittencyofrenewablepowerandincreasesolarpenetration.NewMexico’s potential as an energy producermakes the state a natural testing ground forenergystoragecompanies.

o Tohelpdrivethedeploymentofenergystorageequipmentsuchaslithiumionbatterypacks,andmakethestateattractivetothisemergingfield,Iwillworkwithstakeholdersto promote and expand financingprograms likemaking the Property AssessedCleanEnergy(PACE)modelavailableforcommercialproperties.

o NewMexicowillalsouse thepurchasingpowerof thestategovernmenttohelpdriveadoptionofenergystoragetechnologies.

pg. 19

ACleanEnergyEconomyisPossibleIt is timetoexpandourenergyeconomy.Fordecades,NewMexicohasbeena leader in fossilfuel energy exports. We are the seventh largest energy supplier in the nation, thanks to ourpetroleum,naturalgas,andcoalresources.ThePermianBasinisoneoftheprimeareasfornewoildevelopment and exports, but across the state, opportunities aremoremixed. Lower oil prices,decliningproductionlevels,andthecyclicalnatureoffossilfuelcommoditiesmeanweneedtostoprelyingfossilfuelstopaythestate’sbillsanddiversifyourenergysectortoprovidenewjobs.Energy production, and the jobs it creates directly and indirectly, is a critical foundation of ourstate’seconomy.Butthedemandforsustainablepowerandthethreatofclimatechangearedrivingthe nation’s transition to a more diverse portfolio of energy sources. This is a tremendousopportunityforNewMexicoandessentialtothestate’seconomicfuture.Thisisnotjustaboutenergyjobs.Demandforcleanenergyisrisingacrosseveryeconomicsector.NewMexico’sbroadereconomicdevelopmentplansrequirethestatetoincreaseitscleanenergyproduction.CountlessmajorU.S. corporationsarepartofthiseffort. Theyrecognizethatclimatechange is a reality and they will have to adapt their operations to changing real-world factors,publicdemand, and regulatory pressures here and acrossmost of the globe. This is true of thepower industry, as well. They know that, like it or not, change is coming: Sustainable energydevelopmentandusewillbemoreandmorearealityofthefuture,andtheywanttogetaheadofthatcurve.Alongsidegoodpoliciesthatwill increasedemandandsupplyofrenewableenergies,wewillalsoalign our resources to enhance the attractiveness of NewMexico as a place for innovation andtalent. The failure of theMartinez administration to embrace this industry hasputNewMexicobehind our neighboring states.Wemust leverageNewMexico’s competitive advantages in cleanenergy and energy technology, develop incentives to enhance our manufacturing capacity, andgenerate opportunities to raise NewMexico’s profile and attract out-of-state public and privateinvestment.It’stimetoletindustryleadersknowthatNewMexicoisopenforbusinessagain.