February 5, 2020

Community solar bill passes first committee

Photo Credit: CoCreatr cc

A proposal to expand access to solar energy for New Mexico residents through the development of community solar projects passed its first committee Tuesday.

Community solar projects, also referred to as “solar gardens,” are programs in which the energy generated by local solar systems are shared among energy subscribers. The power generation is typically located in a central location and distributed to subscribers in the area.

Albuquerque Democrat and bill sponsor Rep. Patricia Roybal Caballero presented HB 9 to the House Energy, Environment and Natural Resources Committee. Santa Fe Democratic Rep. Andrea Romero and the Speaker of the House Brian Egolf, who also represents Santa Fe, are co-sponsors of the bill, along with Albuquerque Democratic Sen. Antoinette Sedillo Lopez.

The bill would direct the Energy, Minerals and Natural Resources Department (EMNRD) to develop and administer a community solar program with a recurring $10 million appropriation. It would also allocate $100,000 to the Public Regulation Commission (PRC) to hire an additional employee to assist the PRC in implementing the act. It includes a five-year period for the state to evaluate the program and adjust it if needed.

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Under the proposal, the PRC would develop rules to establish community solar programs, but EMNRD would have oversight authority over the program. The bill would also establish an initial state-wide cap of 200 MW of solar energy generation for investor-owned utilities and a 10 MW cap for each rural electric distribution cooperative.

Roybal Caballero said the bill is designed to help low-income communities take advantage of the program.

“The language in the bill actually protects consumers and it opens access to all Indian nations, tribes and pueblos,” she said. “Anyone that wants to participate, the [bill] is designed to facilitate that process.”

There was a broad showing of support for the bill among renewable energy advocates at the hearing, but representatives from rural electric coops spoke out against the bill, arguing that the bill would raise rates for customers and would impose additional costs on utilities.

There was plenty of opposition among Republican committee members, too. House Minority Whip Rod Montoya, R-Farmington, pointed out that some of his constituency on the Navajo Nation would not be eligible to benefit from the program because their electricity is provided by an out-of-state utility.

“I just want the folks from San Juan County to understand this. [It] doesn’t exclude them in the language, they would be excluded by practicality,” Montoya said. “I don’t want folks in my community to have false hope here.”

Rep. Larry Scott, R-Hobbs, raised concerns about the cost of energy in these programs, given that smaller community solar projects could not compete with utility-scale solar generation on pricing. A provision of the bill requires utilities to purchase any excess power that’s generated.

“This piece of legislation creates, in effect, an unregulated power generation facility, with a mandate that the power developed be purchased by regulated utilities,” he said. “The subscriptions will be sold to low-income people at 10 cents per KWh when it’s available from similar resources at 2.5 cents, and then making up the difference with state subsidies — only in New Mexico would we develop a program to mandate the purchase of higher-priced power and then subsidize it for low-income people,” he said.

“Utility scale renewables are coming at a very low cost.That’s part of the full portfolio of energy sources when you get your bill at home,” said Marta Tomic, senior director of Interior West at Vote Solar, a solar energy advocacy organization. Tomic served as one of Roybal Caballero’s expert witnesses.

“The community solar facility itself, compared to utility-scale [renewables], is an important factor, but I don’t think it’s the only factor when we’re talking about cost comparison,” Tomic said.

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Rep. James Strickler, R-Farmington, also challenged the wisdom of small-scale renewable projects.

“The [Energy Transition Act] is a very ambitious program. We have to develop renewable resources at a fast clip, and large-scale solar, for example, is the way to go. These large-scale solar farms can cut the costs down to a very low rate,” he said.

“These small-scale 5 MW facilities take 30 acres. It’s going to be hard to find 30 acres in the city of Farmington, or Las Cruces, or Albuquerque or Santa Fe. It’s going to be hard to locate those facilities. You’re going through all this effort at a higher cost. It’s going to cost you three times, four times more than a large-scale solar farm would cost,” he said.

The bill ultimately passed 8-5 along party lines.

Albuquerque Democratic Rep. Melanie Stansbury and Rep. Abbas Akhil, D-Albuquerque, both said they believe there are some technical issues of the bill that still need to be worked out.

“I think some of the concerns that were raised by the coops and utilities around business model issues, and how it affects their ability to operate — and issues around technology and infrastructure — are really critical to work out to make this actually plausible,” Stansbury said.

The bill will head to the House Appropriations and Finance Committee next.