Dec 5 - McClatchy-Tribune Business News Formerly Knight Ridder/Tribune Business News - Russell Max Simon Albuquerque Journal, N.M.

Santa Fe city government wants to start buying its electricity from a new wind power company, but it may run into opposition from Public Service Co. of New Mexico, the state regulated power monopoly.

Delaware-based Patriot Wind, in cooperation with Santa Fe-based Windforce Inc., has plans to build a 20-turbine wind ranch in eastern New Mexico. The ranch is to be built on 640 acres of state-owned land about 30 miles southeast of Springer.

But before Patriot Wind can get financing for the project, according to a memo from Santa Fe City Attorney Frank Katz, it needs to get commitments from potential customers to buy the electricity -- a prospect that could prove daunting, considering PNM's monopoly.

PNM spokesman Jeff Buell said a change in state law was needed if Santa Fe wants to buy its electricity from someone other than PNM.

"Essentially, what they're proposing is a deregulated energy industry ... an issue already studied exhaustively," Buell said. "The conclusion was that was not in the best interest of the state of New Mexico."

Katz, on the other hand, said it was his understanding that the Public Regulation Commission, the state agency that regulates PNM, could approve the change. In his memo to city councilors, Katz said the city "could expect PNM to fight" the change.

PNM already has a program in place called Sky Blue that allows customers to purchase energy generated from a wind farm in southern New Mexico. Customers pay 22 percent more for their electricity after enrolling in the program.

In addition, Patriot Wind would have to transmit the electricity through PNM transmission lines, although it is unclear how much additional money PNM would charge or whether PNM would agree to do so.

"Why would they agree to help a competitor?" Katz asks in his memo.

City councilors who discussed the issue Monday at a Public Works Committee meeting said they think PNM may be obligated to transmit the electricity based on a federal law. The committee approved a "memorandum of understanding" that commits Santa Fe to buying electricity from the company, provided that Patriot Wind can overcome the legal and regulatory hurdles.

City Councilor Rebecca Wurzburger said the commitment effectively opens the door to an alternative, sustainable approach to energy.