Lawmakers in New Mexico have advanced a bill that calls for the public utilities and rural cooperatives to source all of their electricity from renewable sources by 2045, in effect phasing out power generation fueled by coal and natural gas.

Senate Bill (SB) 489, aka the Energy Transition Act, passed the state Senate on 32-9 vote Wednesday with bipartisan support. The bill is now before the state House, where it is expected to pass.

Democratic Gov. Michelle Lujan Grisham, environmental groups and the Public Service Company of New Mexico (PNM), the state's largest utility, also support the bill.

"It was a long night, but worth it to ensure a bright economic and energy future for New Mexico," state Sen. Mimi Stewart (D-Albuquerque), a bill sponsor, said Thursday.

Lujan Grisham said she would sign the bill if it reaches her desk, but time is running out; the current 30-day legislative session ends on March 16. Any legislation not acted upon by the governor is pocket vetoed on April 5.

SB 489 calls for creating renewable portfolio standard requirements for public utilities and distribution cooperatives organized under the Rural Electric Cooperative Act. At least 20% of retail sales of electricity would have to come from renewable sources of energy by 2020, with the benchmark increasing to 40% by 2025, 50% by 2030 and 80% by 2040. Zero carbon resources would supply all retail sales of electricity by 2045.

The bill would require that cooperatives source 10% of electricity from renewables by 2020, increasing to 40% by 2025 and 50% by 2030. A target of achieving zero carbon emissions, as well as at least 80% of power from renewables, is set for 2050.

The legislation also would allow PNM and other utilities that own stakes in the San Juan Generating Station, a coal-fired generation plant in northwestern New Mexico, to sell energy transition bonds to recover investments in the facility and other energy transition costs. The bonds eventually would be paid off by utility customers.

Last week, the New Mexico Supreme Court upheld plans by PNM to close two of the four coal-fired units at San Juan. PNM has an integrated resource plan in place to increase reliance on renewables and gas-fired power while coal-fired generation is phased out by 2031.