One of three investor-owned utilities in New Mexico has appealed the state’s community solar rule to the state Supreme Court and asked the court to delay implementation until what he decides on the appeal.
Southwestern Public Service Company, a subsidiary of Xcel Energy, says current rules passed on March 30 — a day before the statutory deadline — by the New Mexico Public Regulatory Commission could put service customers at risk. public and damage the company’s image.
Community solar essentially allows people who live in apartments or cannot afford solar panels for their homes to sign up to receive some or all of their electricity from a network. The Community Solar Act specified that 30% of electricity from community solar projects must be available to low-income households and organizations.
“We appreciate that the commission has devoted a great deal of time and attention to the development of its Community Solar Rule,” Wes Reeves, a spokesman for Xcel Energy, said in an emailed statement. “Xcel Energy believes that a stay of the rule pending the resolution of our appeal is in the best interests of customers and developers – and will help foster the long-term success of the community solar program – as the current rule lacks safeguards. essential for customers and has other inconsistencies with the Community Solar Act that the legislature has required to be included in the rule.
SPS court documents say the rule is vague in many cases and was influenced by secret sources who formed an advisory “team”. The court filing argues that the implementation could cause customers who do not subscribe to a community solar panel to pay more for electricity. SPS also argues that their own reputation will be affected because those subscribing to the panels may not realize that the community solar provider is not SPS, but rather a separate entity that may not have the same level of customer service.
However, from the community solar proponent’s perspective, this call goes back to issues that have already been discussed at length in an attempt to delay implementation, which will ultimately cost taxpayers money in legal fees and will also be costly for advocacy groups considering intervening.
Many of the concerns expressed in the filing were discussed at length during the rulemaking process, while the Community Solar Act was drafted and voted on in the 2021 legislative session. These concerns include ensuring that people who don’t subscribe to a community solar panel don’t end up subsidizing those who do.
Request for a new hearing
In the months following the PRC’s release of the final rule, various groups filed motions for a rehearing. In June, the PRC was facing nine motions for rehearing, including motions from SPS, Public Service Company of New Mexico and El Paso Electric. He issued a single order, partially granting five of those motions and denying the other four. The utility requests were among those partially granted.
The order allowed utilities to quickly recover administrative costs associated with the community solar program rather than having to wait until the next rate case. This was based on the recommendation of an advisory team. Delaying cost recovery until the next rate case could lead to “a temporary effective subsidy by all ratepayers,” according to the document.
However, interconnection costs were not included in this immediate recovery.
“Utilities currently charge interconnector applicants for the costs of interconnection studies and interconnection costs in accordance with the Commission’s interconnection rules,” the document said. “The same practice should apply here. The applicant will be responsible for paying these costs, unless, on application to the Commission, the applicant can demonstrate that part of the costs should be borne by subscribers to the extent that they will receive a net benefit from the expenditure of interconnection. The Commission should not consider these costs to be subsidized by non-subscriber ratepayers.
After the passage of the Community Solar Act in 2021, the PRC assembled a team that had more expertise in the community solar field. This team provided recommendations that were used to write the rule.
But who was on the team was not always transparent and SPS objects to this in its appeal.
The June order issued by the PRC in response to the rehearing motions indicates that the utility rehearing motions appear intended to improve the rule from a utility perspective. However, the “team” did not find the arguments convincing. Instead, “the team” viewed the motion for a rehearing as an attempt to delay implementation of the rule and, according to the order, “the team” found some of the arguments made “dishonest, even frivolous.
Among these arguments was the concern of the public services about “the team”.
“The specific people who made up the ‘team’ have not been identified, and it is unclear whether anyone not employed by the Commission had roles on the ‘team,'” SPS says in court documents. .
The PRC’s decision to rely on “the team” came from the agency’s lack of expertise in community solar energy.
During the rulemaking process, SPS points out that the “team” did not file any written comments. For this reason, SPS maintains that “it is not clear from the record what the ‘reasonings and recommendations’ of the ‘team’ were, how they were communicated to the Commission and by whom they were communicated. As a result, stakeholders interested in this regulation, including SPS, have not had the opportunity to review or respond to the “reasoning and recommendations” of the “team” prior to the close of the regulatory filing. . »
Consequences of delay in implementation
In that same order, the PRC outlines the consequences of delaying implementation of the rule — less information and an “insubstantial record of initial program performance” for the state legislature to assess.
The law itself did not fully encompass community solar power. Instead, it created a three-year pilot program that allowed up to 200 megawatts of community solar power – in the form of five-megawatt panels – to be available to certain subscribers who are customers of the three utilities. owned by investors.
If the court rules in favor of SPS, the new rules will be sent back to the PRC and the new commission will be tasked with developing a new set. That could lead to a potential delay of a year or more, which could make investors nervous about backing new community solar projects, according to Jim DesJardines, executive director of the Renewable Energy Industry Association.
DesJardines said ratepayers will ultimately absorb the costs of legal fees incurred by SPS, while REIA plans to hire a lawyer and intervene in the case, the cost of which will not be passed on to community solar subscribers, but rather supported by REIA members.
DesJardines said community solar rules are complex, and when things are complex, people who are paid to pick them out and find potential problems usually can, especially when lawyers are involved.
He said the Community Solar Act had been introduced in the Legislature for several years before it was passed. This gave time to sort out issues like those expressed in the court case.
“I would say the public, through their legislators, made their voices heard,” he said. “And their voice was ‘we the general public want access to community solar power’.”
The legislation includes provisions geared towards low-income communities.
In its appeal, SPS argues that the PRC failed to include guidelines to ensure that the requirements of low-income customers are met. These guidelines, according to SPS, are required by the Community Solar Power Act.
Investor-owned utilities have expressed concerns about community solar early on, including during the legislative process.
Some advocacy groups say this is because utilities have operated largely as regulated monopolies. People who wanted electricity had no choice but to buy it from the utility that serves their area. Community solar energy offers competition. People can subscribe to get some or all of their electricity from a grid. This electricity will be delivered to their home or business using infrastructure that the electric utility has paid for and maintained.
While the utility will collect interconnection fees and can essentially charge for the use of the infrastructure, SPS argues that the rules do not provide adequate protection to ensure that customers who do not subscribe to the community solar panel do not end up paying to support those who do, or essentially subsidizing subscribers.
But, even with the appeal, Mariel Nanasi, executive director of New Energy Economy, said community solar power will grow.
“The NM PRC rules for community solar power are in place and the program will create clean solar power at competitive prices and includes the promise of several hundred jobs despite the obstruction of electric utilities monopolists who appealed the rules,” she said in an email. . “Even though SPS, PNM and EPE have tried to sabotage the new energy economy with false complaints and incessant delays, because the appeal will take an average of 1.5 years, the community solar program will have a chance to build and develop strong energy advantages in NM.”