Making community solar programs a reality

November 26, 2018

El Paso Electric Co. has filed an application at the New Mexico Public Regulation Commission for approval to provide a monopoly “community solar” program in Las Cruces.

Community solar programs aggregate a large array of solar panels in one location to provide solar electricity to individual electric customers using utility transmission and distribution systems. The customer pays a rate based on the cost of constructing and maintaining the community solar facilities and use of the utility transmission and distribution system.

Community solar programs are available in many states, offering solar energy to customers who cannot, for various reasons, install solar facilities on their roofs or property, such as renters. These community solar programs often provide customers with a lower cost of electricity than the public utility residential electric tariff rate or individual rooftop solar facilities.

PNE, an independent power producer that specializes in providing wind and solar renewable energy, has filed a motion with the PRC seeking to block El Paso Electric Co.’s attempt to extend monopoly utility rights into community solar. Specifically, PNE is contesting the fairness of El Paso Electric’s request for proposals for its community solar program, which sought only bidders willing to sell and install equipment for El Paso Electric, while denying independent power producers the opportunity to own the solar facilities and sell solar electricity to El Paso Electric at market rates.

Independent power producers have been seeking legislative authority to provide community solar programs in New Mexico for several years, but they have always been stopped by monopoly utilities, like El Paso Electric, which would prefer customers buy higher-cost electricity from its large coal and nuclear central facilities. New Mexico’s monopoly utilities have been quite successful in their efforts, limiting solar generation to under 5 percent of New Mexico’s electricity generation, despite the lower cost of electricity from such solar facilities and New Mexico’s huge solar potential.

As solar technology has improved, the cost of energy from solar facilities has dropped dramatically, leaving utilities holding the more expensive coal and nuclear facilities. El Paso Electric Co. has now proposed a community solar program that would compete with rooftop solar facilities, while maintaining the utility’s monopoly on central-station generation and extending its monopoly into community solar.

The utilities in New Mexico have abused their monopoly powers, failing to provide New Mexicans with the lowest cost electric generation facilities, as required by New Mexico law, and limiting request for proposals so as to restrict the ownership of electric generation facilities to only the utilities themselves, instead of allowing independent power producers to own the electric generation facilities and submit bids on providing electricity to the utilities at market rates.

Next year, with a new governor and Legislature supportive of lower-cost community solar programs, New Mexico will have the opportunity to pass legislation to make community solar programs a reality, lowering electric costs for New Mexico residents, reducing the harmful environmental pollution caused by coal and nuclear facilities, and increasing jobs and investment in New Mexico. But this will only happen if the PRC rejects El Paso Electric’s attempt to extend its monopoly utility rights into community solar and requires a competitive community solar marketplace.

Ron Flax-Davidson, a resident of Santa Fe, is the chairman and chief executive officer of PNE USA Inc., an independent power producer and developer of wind and solar facilities.

Update hourly