PRC: Utilities trying to overcharge in a solar program meant to help low-income communities

New Mexico’s community solar program is supposed to help people with low incomes and organizations get clean energy for cheaper. But regulators are calling out utility companies for trying to charge consumers too much before the program has even launched.

People and organizations will soon have the option to use solar energy from a community clean energy pool and receive credits to their monthly electricity bill for doing so. After years of advocates trying to create a community solar option, the governor signed an act into law last year establishing the program in New Mexico.

The program is mainly for buildings that house multiple residents or renters, people unable to afford solar for their houses, and rural and tribal areas. At least 30% of the clean energy the solar facilities produce must be set aside for people with low incomes and organizations to use.

Mariel Nanasi is the executive director of New Energy Economy. She said the program is beneficial for the state, even if it’s not for the utilities, because solar businesses will create jobs and boost the economy. Plus, she added, it will help people who don’t have a lot of money become more financially secure.

There have already been thousands of applications from organizations that want to be part of an interconnected solar energy grid, according to documentation the utility companies submitted to the Public Regulation Commission. And a community solar website is supposed to launch next month.

But before the program starts up, the utilities have to show the PRC what subscribers — people or organizations using community solar energy — would have to pay. The companies submitted their proposals in September and October.

The commission’s staff found issues with every single utility’s billing plan and said last week that the utilities are intending to charge or limit customers in ways they shouldn’t be.

So the Public Regulation Commission last week ordered the utilities to fix the violations and resubmit corrections by Thursday, Oct. 20, this time with help from the commission’s staff. But there are public and official frustrations about the process, with both saying the utilities just keep trying to delay the program.

New Energy Economy was one of multiple organizations that protested the utilities’ billing conditions. Nanasi said the utilities have financial incentive to block this program or make it more expensive, since community solar will generate energy in the regions the companies serve, creating an “incursion into their monopoly status.”

“They’re trying to make community solar non-competitive, because they are so afraid of the competition,” she said.

Southwestern Public Service fights back

One of the significant issues the PRC immediately rejected was a condition Southwestern Public Service proposed about who pays for what. The utility’s plan would have the subscriber covering transmission costs, despite a PRC rule directly prohibiting that.

The PRC required that the company submit a corrected version by the end of last week.

Instead, Southwestern Public Service’s attorney Zoe Lees filed a notice under protest with the PRC to say that the regulatory body was violating the company’s constitutional rights.

At the PRC meeting on Wednesday, the commission voted to forgo a public hearing on the billing issues after an attorney with the commission, Russell Fisk, said they could be resolved without one. A hearing, he said, would just delay the community solar program further.

But Lees argued that not having a public hearing violates the utility’s right to due process. She said a full hearing must be conducted in order to determine the billing charges. And, she said, there should be a temporary hold on the PRC-ordered changes until a hearing decision is made, otherwise Southwestern Public Service won’t be able to financially recover from paying for transmission costs themselves.

The Public Regulation Commission has not yet responded to this.

Nanasi said she doesn’t believe the constitutional allegations Southwestern Public Service is putting forth, and has seen similar “legal games” from Xcel Energy, the utility’s parent company, when regulators fined Xcel $1 million for stalling in Minnesota and a Public Utilities Commission put a stop to similar delays in Colorado, as well.

“These are legal games — waste of time, waste of money,” she said.

PRC Vice Chair Joseph Maestas voiced similar concerns at the meeting and said the utilities are creating “unnecessary roadblocks and dragging their feet” on the program implementation.

A history of legal battles

These aren’t the first roadblocks to getting the community solar program rolling. 

In June 2022, the Southwestern Public Service’s attorneys filed an appeal with the N.M. Supreme Court against the rules the PRC set in place in March, saying the regulations are vague and lack customer protection. A decision hasn’t yet been made.

The company’s attorneys also requested the PRC temporarily halt the program while the court comes to a decision, which the commission denied.

PNM spokesperson Ray Sandoval said his utility also raised concerns with the PRC in April about solar providers truthfully disclosing costs, benefits and risks to customers, as well as the high transmission costs. He said he hopes the commission will continue to look into the transparency issues, though no formal action has been taken on it.

“There’s got to be some way to really vet this,” Sandoval said.

Nanasi said there were other hindrances, too, as legislators worked for nearly a decade to get a solar act passed in the state, and utilities fought it continuously.

These delays are why the entire country, not just New Mexico, hasn’t yet made the transition to solar and wind energy, she said.

“Community solar is a solution, and utilities don’t want to have anything to do with it,” she said. “And they want to crush it.”

This program will allow individuals and businesses to be more energy independent amid a climate crisis and rising energy prices, Nanasi said.

“Imagine the economic activity that would be generated in New Mexico for cleaner energy (that’s) less costly — and more protections for the most vulnerable people,” she said.

Even if it’s a rocky start, most commissioners said the utilities won’t stop the program from launching.

“Community solar is here,” Maestas said, “and community solar is here to stay.”