Concise Summary of Why Solar Tariffs Are Bad

Below is the verbatim testimony of our partner Tom Solomon 350NM given at the PRC hearing on Jan. 17, 2018. It had no influence whatsoever because the PRC Commissioners decided to vote before hearing public comment. Nonetheless, this battle is not over and it is good to have a concise argument as to why the PRC has erred in this decision and how to get it right.  Read on.

Mr. Chairman, commissioners, my name is Tom Solomon. I’m a board member of NMSEA, also co-coordinator of 350.org New Mexico, a group fighting for a safe climate.

I’m here to support the appeal by Vote Solar and CCAE of the hearing examiner’s ruling in the SPS rate case, #17-00255-UT. Vote Solar and CCAE moved to dismiss SPS’s proposed increased rates on solar customers. I also oppose any increase in solar tariffs. I am concerned that the hearing examiner’s ruling to deny their motion, would have the effect of setting a new PRC precedent, allowing utilities to burden solar customers with such high fees and costs that it could choke off the distributed solar / rooftop solar business in most of the state. That has largely happened in SPS’s region, where solar surcharges are so high that new solar is no longer financially viable. SPS has less than 200 DG solar customers, whereas PNM reports that they have over 11,000 (1).

I ask that the commission approve Vote Solar’s request to withdraw and dismiss these solar tariffs

Here’s why:

1. Schools around the state, for example in Rio Rancho, NM, are saving thousands on their electric bills by installing their own solar farms. RR HS and Sue Cleveland HS and Santa Fe HS are three examples and they are saving well over $100,000 per year on electricity. If fees such as SPS proposes were to be imposed on schools around the state, their electric costs would double. Rooftop Solar employs 2900 workers in 76 companies in NM (2). These fees would destroy their business model. We should be nurturing these growing businesses, not choking them back.

2. The State legislature has a history of supporting distributed and rooftop solar, for example in passing the Solar Market Tax Credit in 2006. And the state’s 2007 Renewable Energy Act clearly supports DG by mandating a minimum DG diversity requirement of 3%.(3) To re-interpret the meaning of the statute 62-13-13.2 to allow utilities to recover full system costs, instead of just ‘ancillary and standby services’ will kill DG in the state. That is contrary to the stated intent and actions by past legislatures.

3. Multiple past studies (4) including from the PUC’s in Vermont, Maine and others have shown that the value that solar DG delivers to the grid exceeds what customers receive back through net metering. One example is that a homeowner that buys a 5kW solar system is making the capital investment in generation that a utility would otherwise make. But they don’t demand cost recovery plus a 10% profit from ratepayers as the utility would. They provide solar power to the grid during peak hours when the utility can resell it for peak profit. And they recover that power at night when the utilities costs are lowest.

I ask the commission to rule in favor of the schools and farmers and ranchers and homeowners who are saving money on their electric bills with solar. And rule in favor of the growing solar business and solar workers who are serving these customers. Please don’t allow this increase in solar tariffs.

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References:

1) “There are currently more than 11,000 solar customers interconnected to the PNM system which drives the local solar industry. “  https://www.pnm.com/solar1

SPS has 112 residential DG customers, 14 Small Commercial, and 29 irrigation customers. The customer table is on page 49 of Evans’ testimony. The 112 / 14 / 29 are for rate 59. There are 8 more under rate 67.

2) 2929 solar jobs in New Mexico
https://solarstates.org/#state/new-mexico/counties/solar-jobs/2016

3)  PRC statute 17.9.572.7 – G :  3% diversity requirement for solar distributed generation  http://164.64.110.239/nmac/parts/title17/17.009.0572.htm

4) Grid studies https://environmentamerica.org/reports/ame/shining-rewards