New Mexico kills attempted hike on discriminatory solar fee

New Mexico regulators have killed the standby fee that critics say has paralyzed rooftop solar in the territory of Southwestern Public Service.

September 7, 2018 Tim Sylvia

Another utility has been denied the fixed rate increase that they so frequently crave. This week the New Mexico Public Regulation Commission (PRC) decided by a 4-1 vote to kill Rate 59, a “standby fee” that charged solar customers of Southwestern Public Service (SPS) in Eastern New Mexico $28 a month, which critics say has crippled rooftop solar in the area.

The case came before regulators when SPS requested a roughly 14% increase on the fee, bringing it to just under $32 per month, or around $384 a year. The company claimed the increase was necessary in order to maintain standby capacity for solar customers in the event that they cannot produce enough electricity themselves.

The issue raised by the opponents of the increase, including Vote Solar, was that there were no customers to serve, thanks to the rate itself. Vote Solar claimed that the rate killed residential solar development in SPS’ service area, citing only around 112 solar customer households.

Vote Solar also believed the fee to be was discriminatory in nature, arguing in a release:

Earthjustice and Vote Solar, in partnership with local counsel Jason Marks and the Coalition for Clean Affordable Energy, showed that Rate 59 discriminatorily collects extra fees from customers who are less expensive to serve than other customers, forced solar customers to pay for costs unrelated to their own rooftop solar, and that SPS failed to consider the proven economic benefits that rooftop solar provides to all customers, such as avoiding the need for new power lines and displacing more expensive sources of power. Rate 59 was one of the most punitive solar customer fees in the country.

It’s no surprise that the decision comes as a relief not only to customers of SPS, but to the New Mexico solar community, as there were fears that other utilities in the state would follow SPS’ lead.

“Today’s decision is a victory for SPS customers who finally have the freedom to choose affordable solar and the opportunity to save money on their electric bill,” said Rick Gilliam, Vote Solar’s program director of DG regulatory policy and expert witness in the proceeding.

“Ending this punitive charge is especially welcome news for low-income and fixed-income residents who spend a higher portion of their income on utility bills, yet for years were unable to lower their bills with solar because of this charge. We applaud Hearing Examiner Carolyn Glick and the Commission for reviewing the facts and putting control over energy bills back in the hands of New Mexico residents.”

A point to note is that the case’s Hearing Examiner recommended that Rate 59 be further ruled invalid because “the types of costs it collected were not the costs of providing ancillary and standby services.” This was ultimately not adopted by the commission, meaning that SPS may reapply later to charge solar customers for these costs.

In the meantime, this case now becomes another installment in the summer’s trend of utilities being denied fixed-rate charge increases.

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