June 17, 2021

PRC says community solar projects cannot be approved until rules are completed

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While the Community Solar Act does not go into effect until June 18, investor-owned utilities have been receiving applications, and at least one of the utilities has expressed uncertainty about how to process such applications because rules regarding such projects will not be completed until next year.

The New Mexico Public Regulation Commission, which is tasked with regulating utilities and community solar programs, has until April 1, 2022, to issue the final order adopting rules for community solar projects.

Citing the uncertainty that utilities are facing with the applications, the PRC is issuing a notice to the state’s three investor-owned utilities explaining that the current interconnection rules will remain in place until the commission rules otherwise and that community solar project applications that have been received will not receive any priority consideration.

“Neither the utilities nor the applicants are certain as to what the pending rulemaking means in regards to the status of those applications,” said PRC General Counsel Russel Fisk during the meeting on June 15.

A community solar array is a small facility with at least 10 subscribers who receive at least a portion of their electricity from the array. This is intended to make renewable energy available to those who might not be able to install solar panels on their house, such as low-income communities or people who live in apartments.

The act does provide some details about what should be in the rule, such as a statewide capacity program cap of 200 megawatts of alternating current that will be proportionately allocated to investor-owned utilities through November 2024. Rural electric cooperatives and Native American projects will not be included in that cap. Additionally, 30 percent of the energy from each community solar project must be set aside for low-income customers and low-income service organizations.

According to an email from PRC spokesperson Sarah Valencia, more than 150 prospective projects have already requested an estimated four times the total expected community solar capacity for the years 2022 through 2024.

The act also requires a lengthy rule making process with input from tribes, low-income stakeholders, utilities, disproportionately impacted communities, state agencies and other interested parties.

Fisk said any current application for a community solar project could not possibly anticipate what the rules could look like once they are finalized.

The PRC ordered the three investor-owned utilities—Public Service Company of New Mexico, El Paso Electric and Southwestern Public Service Company—to inform current, future and likely community solar applicants that the rulemaking process may not be completed until April 2022 and that early applications does not mean the project will be prioritized over later applicants.