Truth or Consequences in the PNM Rate Case

Solar panel in New Mexico

Solar is a no-brainer in sun-drenched states like New Mexico—or at least it should be. Despite having a sun symbol proudly emblazoned on the state flag and every license plate, New Mexico barely makes SEIA’s top ten states for solar PV installations. Digging into PNM’s latest rate case—it’s easy to see why.

New Mexico’s largest electricity provider, PNM, filed a rate case with the New Mexico Public Regulation Commission (Commission) in December. Complicated rate cases result in lots of questions from intervenors, especially when it involves a brand new, never before used cost allocation method; decoupling; large increases in monthly customer charges; large increases in monthly demand charges; a surcharge on customers with on-site solar facilities; a future test year; and changes from a monthly net metering rollover kWh to a cash payout at the Company’s view on avoided costs. As a result of this massive filing, many intervenors in this proceeding (including Vote Solar) filed requests for information (discovery). Shockingly, PNM asked the judge to limit discovery to no more than 25 questions at a time or 100 questions max. This audacious move was universally opposed by all intervenors and was ultimately denied by the judge.

While there are many important issues in this proceeding, our primary concern is the solar surcharge the utility seeks to impose.  The charge would result in additional costs to the solar homeowner of over $350 per year for a typical 5 kW PV system.  We believe this would be a job killer and hurt the State’s economic development.  Ironically, PNM is also proposing a discounted “Economic Development” rate, designed to attract new customers to the service territory to add jobs and increase economic activity. Apparently in PNM’s eyes, all jobs are not created equal!

There has been a great deal of interesting pre-trial activity in this case.  The Albuquerque-Bernalillo Water Authority and New Energy Economy asked for the entire case to be dismissed based on lack of support, particularly with respect to some of the more complicated bases for setting rates PNM employed.  Not long after, The Alliance for Solar Choice (TASC)–along with five other parties–moved to dismiss the solar surcharge element based on lack of evidence and support consistent with legal requirements. Vote Solar supported TASC’s motion and added another section of statute with which the surcharge was inconsistent.   Virtually all other parties, including Commission staff, agreed and filed supporting responses. Parties are now awaiting PNM’s response.

Hearing Examiner Carolyn Glick was assigned by the Commission to oversee the litigation and to act upon motions and requests of parties. Glick recommended rejection of the utility’s proposal for being incomplete. Glick agreed with parties that the utility did not fully explain and support why it needed a 12% rate increase.  The full Commission will have to adopt her recommendation for the case to be thrown out, which will take some time.

The ruling, if it stands, leaves the option open for PNM to refile its application in the future.  The current schedule is for testimony to be filed by June 5 and hearings will be held at the end of July/beginning of August.

PNM serves more than 500,000 residential and business customers in New Mexico. Only 4,400 of those participate in the utility’s rooftop solar program, contributing a very small amount to PNM’s measly 1% solar. In a state with abundant solar resources, this is just unacceptable.  Only through Vote Solar’s work with the public to engage in arcane regulatory proceedings, such as the PNM rate case, can we expect utilities to tell the truth–or–face the consequences.  The days of utility “black box accounting” need to end and make way for public participation in an energy democracy.

Read our 6 principles of good solar rate design here to learn how it’s done right.

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