New Mexico homeowners, renters and businesses who participate in the state’s future community solar program could save more than half of their normal electric bill under credit rates after the state regulators approved some financial details this week.
What’s community solar?
The governor signed the Community Solar Act into law last year, which included the community solar program. This will allow multiple homes and businesses to get solar energy — almost a third of which is reserved for low-income communities — from a single solar facility.
The New Mexico Public Regulation Commission voted Wednesday to approve solar bill credit rates for the community solar program, which will apply to participants’ monthly electric bills.
Many details of how the program will work, however, remain unresolved since the PRC has yet to approve utilities’ plans for instituting the system, repeatedly finding issues with how the energy companies want the program to work.
Investor-owned utilities operating in New Mexico — the Public Service Company of New Mexico, El Paso Electric and Southwestern Public Service — are required to enact community solar and had to submit drafts to the PRC that detail how the program will work almost two months ago, none of which have been fully approved.
And again at Wednesday’s PRC meeting, the plans didn’t completely get through. PRC economist Christopher Dunn said there could still be errors from all the utilities, so the drafts should be reviewed more thoroughly — something that could delay an already prolonged process.
“While staff believe that the filings don’t appear to directly violate any statute or commission rule, staff does believe that there are still issues that warrant further review,” he said.
However, PRC attorney Russell Fisk reminded commissioners about the timeline they’re trying to meet with the community solar program. Officials are trying to decide in March or April 2023 who will get to be part of the solar projects.
Fisk said the billing credits, more than anything else in the plans, need to be urgently approved, so people know if they want to participate or not.
Arthur O’Donnell, a solar innovator fellow with the U.S. Department of Energy, is advising the PRC on community solar and presented at Wednesday’s meeting as well. He said the credits in the three plans are consistent with others in the country, ranging from 8.5 to 10 cents per kilowatt-hour. And the exact amount of money can be adjusted if needed as time goes on, he pointed out.
So commissioners voted to enact the solar credit plans, one of the first approvals in what’s been a back-and-forth process to get the program ready to go in time. The rest of the details will continue to be hammered out between the utilities and PRC.
Southwestern Public Service protests credit rate approval
The now-approved credit plan for Southwestern Public Service isn’t what the company first submitted. The utility’s first draft would’ve given customers a lower credit amount so they — not the utility — would be covering the cost of energy transmission, which would be breaking program rules.
The PRC rejected that last month, and Southwestern Public Service had to turn in a new version. At the same time, the utility’s lawyers appealed the rejection with the state Supreme Court, hoping to keep the original credit plan alive.
The Supreme Court hasn’t released a decision on the appeal, something that could take months. While the court looks into the issue, Southwestern Public Service asked the Public Regulation Commission to hold off on enacting the new credit plan. Commissioners denied the request, so the lawyers went back to the Supreme Court, asking instead for the court to grant a temporary halt.
Fisk questioned the requests’ validity and said this may just be something the utility keeps doing while the PRC tries to roll out community solar. “They may file a motion to stay or vacate every order that the commission does from now on as part of implementing the program,” he said.
Since there hasn’t been a court response yet, the regulators moved forward in approving the new credit plan along with the other two utilities’ at Wednesday’s PRC meeting.
“There’s no stay, so the commission’s rule’s in place,” Fisk said. “The commission is going forward.”
Other issues the PRC is trying to work out
O’Donnell said the utilities have been meeting with PRC staff weekly to finalize details about electricity generated by community solar facilities. Those meetings will continue through the end of November, and if the groups don’t reach an agreement by then, there will be a hearing process, he said.
However, he said he thinks everyone “can come up with a more unified approach” that would avoid that lengthier process.
Not all of the disagreements can be resolved through informal resolutions, though. Financial charges called rate riders allow utilities to recover administrative costs of the program, and O’Donnell said it’s likely a full proceeding will be needed to finalize those costs. Figuring out the rates will likely be contentious, he said, but they don’t need to be fully in place until the projects are started.
PRC Vice Chair Joseph Maestas said he’s hopeful that everyone’s moving toward a resolution. At a meeting last month, he voiced frustration that the utilities just keep trying to “obstruct and delay community solar and the intent of the Legislature, to the detriment of our low-income communities.” But this solar credit approval now is a good step forward, he said.
“I know I had some critical words to say when we received those initial advice notices, but I’m very optimistic that we can work this out and continue with the implementation of community solar,” Maestas said, “and deal with these other issues as they come up without impacting the implementation schedule.”
All of the commissioners voted to pass the solar credits and keep working on the rest of the details in the utilities’ plans, even Commissioner Jefferson Byrd, who voted no on suspending and partially rejecting the drafts last time.
“I think that we have to keep our eyes on the prize,” Maestas said, “and that is a potential benefit for many New Mexicans when they have an opportunity to access cheaper solar energy through the community solar program.”