1.0 Introduction
Over the past decade global carbon emissions, which have been linked with climate change, have become an issue worldwide. The Kyoto Protocol was created in 1997 to regulate these emissions, however, its goal is to reduce emissions by the end of 2012, after which the protocol has no further provisions. Recent climate conferences, such as the one in Copenhagen, Denmark, have failed to produce any legislation to supplement or replace the Kyoto Protocol. The U.S. is one of the world’s largest producers of carbon emissions, emitting almost 6 billion metric tons of CO2 in 2008[1], which approximately 20% of the world’s CO2 emissions. Correlating with the carbon emissions increase is the fossil fuel usage increase in the latter half of the 20th Century, from 3 billion metric tons of fossil fuel in 1965 to over 7 billion metric tons in 2008. According to the Statistical Review of World Energy 2009 there are 1.3 trillion barrels of oil left which, given current consumption rates, will last another 42 years. Inevitably, non-renewable energy sources will become prohibitively expensive, so alternative sources of energy must be found and utilized.
The state of New Mexico was responsible for emitting 33 million metric tons of CO2 in 2006 and, in Santa Fe, CO2 emission has increased of 8.5% since the year 2000. In order to address this increase, the City has come up with the Sustainable Santa Fe Plan, part of which includes reducing carbon emissions by 18.9% by 2012. PNM, the provider of Santa Fe’s electricity, currently produces 71% of its output from coal and natural gas. While inexpensive burning these fuels contributes to carbon production. Part of PNM’s contract with New Mexico entails that renewable sources must constitute 7% of the current energy portfolio. Also notable is 20% increase in energy costs for residents in New Mexico since 1990. To counter both of the fore-mentioned problems pertaining to residential energy, Santa Fe has shown an interest in purchasing its electrical infrastructure.
The Sustainable Santa Fe Plan provides solutions for the municipality to provide services in an environmentally-conscious way. Part of the plan provides loans for residents to install solar panels on their homes, and any surplus electricity generated can be sold back to the grid at retail price. While the private solar panel installations aid in carbon reduction to a small extent, the carbon production of Santa Fe is influenced mostly by the practices of PNM which favors profit over the goals of the sustainability plan. Thus, the lack of control over the electrical infrastructure is a limitation on the City’s green efforts. Santa Fe has purchased its water infrastructure in 2008 for the sum of $61 million as part of the Sustainable Santa Fe Plan. Santa Fe is looking to buy its electrical infrastructure so that it can have the flexibility needed for greener power transmission practices. With control over the grid, the City can upgrade it with smart grid specifications and integrate solar power without dissent from PNM. As an example of this type of proposal, the town of Farmington, NM has owned its power infrastructure since 1965 and Farmington residents can tout that electricity rates saw no increase between 1982 and 2007.
The City has purchased the water infrastructure, but that resulted in the opposite of the intended effect: a rate increase instead of a decrease. This drastic increase in water bills for residents was to pay for the loans that made the purchase possible. There are no full maps of the City’s electrical infrastructure available to this project group to allow for a full assessment of the value of the power infrastructure. The main unresolved issue with the purchase of the electric grid is whether or not it would be cost effective to do so. The corollary to that is the method of how the City would pay for the purchase.
Our project’s goals are straight forward; first, to determine if it is cost effective for the city of Santa Fe to purchase their electrical infrastructure; second, if it is how they might pay for it. Our research will gather numbers such as operating costs, maintenance costs, age, and several other factors. After we know the purchase price and value, we can figure out what methods of financing the city could use after undertaking such a large financial burden. The financing will require the team to conduct in-depth research of how the city could potentially raise the amount of money required to purchase the infrastructure. As an added bonus to the people of Santa Fe, our team will work to develop a way to get the local students more interested in science. By performing each of these objectives, we will be able to help the City of Santa Fe determine if the possibility of purchasing the electrical infrastructure is a worthwhile endeavor for them to undertake.
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