We have a generational opportunity to reduce carbon in New Mexico, through the double-sided coin of increasing our state’s renewable energy portfolio, the leading climate priority for Gov. Michelle Lujan Grisham, and retiring the San Juan Generating Station in San Juan County, a source of coal-based carbon emissions for decades.

The Energy Transition Act, Senate Bill 489, sponsored by Sens. Jacob Candelaria, D-Albuquerque, Mimi Stewart, D-Albuquerque, and Rep. Nathan Small, D-Las Cruces, does just that.

This watershed policy, backed by over a year’s worth of research, stakeholder meetings and conversations with a diverse group of organizations, will set New Mexico on a course toward clean energy, lower energy costs, help workers impacted by the retirement of New Mexico’s biggest coal plant, and signal to the country that New Mexico is doing its part to address climate change.

The Energy Transition Act is a comprehensive package of reforms, painstakingly negotiated.

First, New Mexico communities impacted by coal plant closures will receive $40 million in economic relief to assist plant employees, mineworkers and others with severance pay and job training. In addition, with public input from community stakeholders, the fund will assist the Four Corners’ economy to transition away from its dependence on fossil fuel extraction.

Second, the Energy Transition Act will transform New Mexico’s energy sector. Through this bill, our state will be 50 percent renewable by 2030 and 80 percent by 2040. To combat climate change, our electricity will be 100 percent carbon-free by 2045. These standards will be among the strongest in the country, making New Mexico a leader in addressing climate change.

Third, our economy will be bolstered by a large renewable energy build-out, with a local workforce trained to supply the needed unionized labor, and a priority placed on training workers from traditionally disenfranchised areas of the state. In addition to the air, land, water and public health benefits for New Mexicans that the new renewable standards would provide, there also are substantial economic benefits.

Renewable energy is today among the least expensive sources of energy, and New Mexico contains premier sites for its wind and solar. By moving utilities away from fossil fuels, and requiring a robust renewable energy build-out, those low costs will be available to all residents.

Finally, the Energy Transition Act protects consumers and reduces electricity costs as New Mexico moves away from coal. New Mexico utilities have long relied on coal-fired generation to produce electricity. While coal power has historically been low cost, the declining price for renewables makes that no longer the case. And coal-fired electricity adversely impacts our health and environment.

In short, it makes sense for New Mexico to quickly transition away from coal. Some utilities however, such as the Public Service Company of New Mexico, have substantial coal plant costs approved for recovery but still on their books. Utilities earn a return on the outstanding balance of those costs.

The Energy Transition Act provides low-cost financing to pay off coal plant costs and close the facilities, often referred to as “securitization,” a tool used by environmentalists in many states to advance coal plant retirements and renewable development and assist workers in affected areas.

Securitization is like refinancing a mortgage at a lower rate. The lower-interest, AAA-rated bonds will reduce the overall cost of closing coal plants by as much as 40 percent — in large part because the utility no longer earns a return on the now-paid-off plant balance — and pay for things like economic transition funding for displaced workers and communities. For New Mexico, securitization is a fair way for utility customers and shareholders to move away from coal and share in the responsibility of doing so.

The Energy Transition Act has taken a year of careful negotiations among a diverse set of stakeholders, in order to carve a path toward clean energy and economic prosperity for the state. It’s a new day in New Mexico, and the Energy Transition Act can set our course toward renewable energy and better paying jobs for decades to come.

Stephanie Maez is the executive director of ProgressNow New Mexico. Demis Foster is executive director of Conservation Voters New Mexico. Sanders Moore, executive director of Environment New Mexico, and Mike Eisenfeld, community organizer for San Juan Citizens Alliance, were contributors.