New Mexico regulators back solar settlement

OREANDA-NEWS. August 12, 2016.  New Mexico regulators have approved a settlement that will avoid a rate increase for Xcel Energy customers with rooftop solar.

The New Mexico Public Regulatory Commission yesterday approved a deal negotiated by solar advocates and Xcel subsidiary Southwestern Public Service that leaves out the company's previously proposed rate increases of 31-48pc for net-metered customers. The ruling will keep flat and in some cases reduce the rates the company charges to customers with their own solar systems.

A coalition of renewable-energy advocates including EarthJustice and Vote Solar successfully fought the original proposal, which would have raised the "distributed generation standby service rider," or standby fee. The charge compensates a utility for the costs of connecting rooftop solar systems to the grid, whether or not rooftop owners offtake any power.

"New Mexico is a sunny state that has the potential to be a solar energy leader," Earthjustice attorney Sara Gersen said. "We cannot let utility fees put clean energy out of reach."

The New Mexico decision marks the latest development in the US solar industry's effort to defend net-metering from utility proposals to raise rates or reduce compensation for customers, with sun-belt states becoming the main battleground for two camps.

Rooftop owners that have "gone solar" now need less power from the grid. On the other side, utilities have struggled to stay profitable due to a dwindling customer base and are seeking to modify rate designs to stay solvent.

The New Mexico regulators' decision maintains the existing rate for solar arrays on homes, schools or businesses. The charge will shrink by 20pc for agricultural irrigation customers. Southwestern Public Service submitted the proposal last October to adjust the rate, which has been in place since 2011.

Xcel did not respond to requests for comment.

Under net-metering, utilities give solar owners a credit on their electric bills for the excess power they send back to the grid.

In many states, customers receive credits based on retail electricity rates, but utilities in New Mexico and elsewhere have pushed to change that to a lower wholesale-rate basis.

"It is not reasonable to expect utilities to interconnect these customers for free, pay them peak prices for non-peak production, and spread those and other costs over the shrinking base of ratepayers," said Richelle Elberg, a consultant at Navigant Research.

New Mexico regulators have disallowed recent attempts by other utilities to raise rates for solar owners. In May 2015, El Paso Electric proposed doubling a monthly fixed charge for residential solar owners while reducing their net-metering credit. A December 2014 rate case from Public Service of New Mexico proposed increasing a charge to \\$6/kW for solar customers, which regulators said was too high.