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NM Climate Investment Center bill advances through first committee
SB169 looks to fund NM climate action and attract big federal IRA grants
The Climate Investment Center and Fund bill (SB169) passed its first test on Thursday morning, February 9th 2023, as it faced the Senate Conservation Committee (SCONC). Consisting of mostly democrats, SCONC is chaired by the sponsor of the bill, Senator Elizabeth “Liz” Stefanics. After some discussion and friendly amendments, the bill passed 7-1.
Stefanics’ bill proposes creating and funding the Climate Investment Center, a nonprofit, independent, public corporation (if you’re confused as to what this is, so was the committee), and appropriates $20 million for the administration of the program. The center would award grants and loans to public, private, and public-private partnerships for green projects around the state to kickstart a climate-friendly economy in New Mexico.
With newly added amendments, a nominating committee would appoint a board to govern the climate investment center. The nominating committee would be selected by the Governor and legislative leadership from both parties.
The $20 million appropriation is non-recurring, and the board would have the authority to create or adopt new programs in the future. The climate investment revolving fund, which will hold the $20 million, will be used to run the investment center. The fund would have the opportunity to grow, increasing the center’s investment capacity over time.
While the bill is vague on the types of programs that will be financed, they will likely need to meet the climate and economic goals of the state, and the funding programs within the Inflation Reduction Act (IRA). The IRA is known as the biggest investment in clean energy, US infrastructure, and environmental justice the world has ever seen. IRA funding is a major driver of Stefanics’ push for the climate investment center.
The Greenhouse Gas Reduction Fund (GHGRF), a major part of the Inflation Reduction Act, is set to dish out $27 billion worth of funding for states to finance greenhouse gas-reducing projects around the state. According to former Albuquerque Mayor and current advisor to the Governor, Marty Chavez, New Mexico could receive upwards of $500 million from the GHGRF. NMED notes in the Legislative Finance Committee Fiscal Impact Report (FIR),
“If SB169 is not enacted, New Mexico may miss out on the opportunity to receive competitive grants from the U.S. Environmental Protection Agency from the Greenhouse Gas Senate Reduction Fund, which provides funding to mobilize financing and leverage private capital for clean energy and climate projects that reduce greenhouse gas emissions.”
For decades, climate change action has been associated with suppressing the economy, but as renewable energy becomes more affordable and federal incentives rush into states, projects are becoming easier to finance. For example, the price of utility-scale solar has decreased by 82% since 2010, and residential costs have decreased 64%. Advocates of the bill say the climate investment center could, in time, finance rooftop solar for houses, utility-scale renewable energy projects, and more. While important, renewable energy is only part of what is possible.
Affordable climate action financing could kickstart energy storage, mass transit, alternative fuels, carbon sequestration, and other projects, public or private, especially in environmental justice (EJ) and disadvantaged communities. As the bill makes its way through the committees, we may find out more about the potential projects the legislature has in mind.
In opposition, Sen. Gregg Schmedes, a republican from Tijeras, expressed his concern that dispursing funds from the Inflation Reduction Act could cause inflation in New Mexico. Schmedes was the only conservation committee member to vote no on the bill.
The New Mexico Economic Development Department, a supporter of the bill, expressed concern within the FIR that $20 million may not be enough to get the program off the ground. It is unclear whether this will be addressed in the coming committees.
The next committee hearing has not been posted yet but should be posted soon along with an updated draft of the bill here.