New Mexico’s Supreme Court on Monday (Mar. 18) approved the state’s nascent community solar law under attack from the state’s three investor-owned utilities. The court upheld 2022 regulations that the state’s Public Regulation Commission (PRC) put in place to implement a 2021 law requiring the distribution utilities to buy electricity generated by solar arrays serving communities, neighborhoods, and other jointly-owned small-scale solar farms.
Under the program, the member owners of the community solar resource – homeowners, renters, businesses — will get credits on their electric bills, similar to what happens with rooftop solar, although the community’s solar panels are centrally located on the ground. At least 30% of the power is reserved for low-income consumers.
The law caps the amount of electricity from community solar projects divvied up among the three conventional utilities at 200 MW until Nov. 1, 2024. After that date, the PRC will set an annual cap. Under the current allocation, PNM gets 125 MW, Southwestern Public Service 45 MW, and El Paso 30 MW.
When the PRC issued the regulations, Southwestern Public Service (a subsidiary of Minnesota-based Xcel Energy) immediately challenged them at the Supreme Court on a variety of grounds. El Paso Electric, and Public Service Co. of New Mexico (PNM) then joined the appeal. Among the utilities complaints was that the PRC rule did not permit them to deduct transmission costs from the customer bill credits.
The utilities also asked the court to stay the program during the legal challenge. On Jan. 16, the court denied the stay request.
“Community solar will continue to play a crucial role in advancing state clean energy goals and this is a step towards cementing our role as a national leader.” — State Sen. Liz Stefanics
Democratic state Sen. Liz Stefanics said, “As a proud sponsor of The Community Solar Act, I applaud the New Mexico Supreme Court for doing right by the people and honoring the Act’s legislative intent. Community solar will continue to play a crucial role in advancing state clean energy goals and this is a step towards cementing our role as a national leader.”
A January 2021 University of New Mexico study found the state program could result in $517 million in economic benefits to the state, create 3,760 new jobs over five years, and yield $29 million in yearly tax revenues.
New Mexico becomes the 21st state to adopt a community solar program. A report last month from the Department of Energy’s National Renewable Energy Laboratory estimates “that community solar could conceivably serve 53.2 million households and 311,750 businesses that cannot access behind-the-meter solar in the United States. In practice, market, economic, and policy constraints mean that the actual number of households and businesses potentially served by community solar is much smaller. Our analysis suggests that community solar could theoretically grow to serve all residential electricity customers who are unable to adopt behind-the-meter solar, including low- to moderate-income (LMI) households.”
Ultimately, concludes the NRL study, “Community solar could reduce subscriber electricity costs by around $110 million– $330 million per year, serve 210,000–630,000 LMI households, generate $50 million–$160 million per year in grid resiliency and service value, drive $20 million–$160 million per year in economic benefits into host communities, and support around 7,000 permanent jobs.”
–Kennedy Maize