NM Regulators Reject Separate Rate Class for Solar
The same blazing sun that makes Southern New Mexico famous for its eye-watering chile also gives the area incredible solar potential. El Paso Electric (EPE) Company tried to squash that potential with its proposal to create a new discriminatory rate class for residential solar customers and then charge them a higher rate than other residential customers. Thankfully, the New Mexico Public Regulation Commission (PRC) dismissed (PDF) the EPE proposal as unfair.
We were proud to work with Earthjustice, in partnership with New Mexico attorney Jason Marks, to stop EPE from becoming one of the first regulated utilities in the nation to establish a separate rate class for rooftop solar customers. We successfully made our case that net metered customers are not markedly different from other customer classes and therefore do not require discriminatory rate classes. Additionally, El Paso Electric did not perform a cost and benefit study to support their proposal.
The Public Utility Regulatory Policies Act (PURPA) prohibits commodity price discrimination in electric rates, but EPE claimed that PURPA allows EPE to “charge residential customers owning qualifying facilities a different rate from other residential customers if it can be shown that there are different load or other cost-related characteristics between those two groups of customers.” EPE apparently didn’t realize that New Mexico state law requires that they charge residential qualifying facility owners the same rate charged to other residential customers.
“While [the exception] gives EPE a path to avoid violating [PURPA], nothing in that section can be read to also give EPE a path to avoiding the requirements of [a New Mexico state law] that [EPE] charge residential qualifying facility owners the same rate charged to other residential customers,” the PRC said.
“Over the past couple years, utility interests have made it clear that they want to stall consumer solar adoption and have chosen net metering and rate design as their targets for achieving that end,” Rick Gilliam, DG Regulatory Policy Program Director for Vote Solar, said. “We are hopeful that, as we saw today in New Mexico, Commissions and policy leaders will continue to see past the utility rhetoric, recognize the true value of local renewable energy, and uphold solar options for the consumers they serve.”
This ruling should encourage utilities across the country to think twice before deciding to discriminate against customers who decide to go solar. Now that’s a solar victory that will get your eyes watering.