Environment Newsletter: Community Solar Act responses

Note: This is a sample of our weekly environment newsletter. It comes out every Thursday morning via our newsletter list. Sign up for free here! Hello everyone, The Community Solar Act requires the New Mexico Public Regulation Commission to present a report to the legislature in November about the implementation.  As the state regulators prepare […]

Environment Newsletter: Community Solar Act responses

Note: This is a sample of our weekly environment newsletter. It comes out every Thursday morning via our newsletter list. Sign up for free here!

Hello everyone,

The Community Solar Act requires the New Mexico Public Regulation Commission to present a report to the legislature in November about the implementation. 

As the state regulators prepare this report, the agency asked for information from participants and intervenors. The PRC specifically sent out a list of questions to advocacy groups, community solar developers and utilities. Here’s a look at some of the responses.

Coalition of Sustainable Communities New Mexico

A lack of deadlines for completing interconnection studies led to “significant delays” according to CSCNM. In addition to required timeframes, the organization says the process could also “benefit from implementation of performance incentive mechanisms that would encourage utilities to comply with established interconnection timeframes.”

The community solar rules require that 30 percent of those enrolled be low-income or serve low-income communities. This must be accomplished within one year of the project being selected. That means low-income people will need to sign up to receive the power from the solar arrays before the facilities are completed. CSCNM states that the community solar arrays will need to meet the 30 percent low-income enrollment threshold this fall but it is unlikely that any arrays will be online before 2025. CSCNM warns that this could cause some subscribers to believe that it is a scam or to forget about their enrollment.

The dual billing—subscribers receiving a bill both from the investor-owned utility and the community solar array—could also create challenges in attracting and retaining subscribers and will create some confusion.

SunShare LLC

SunShare was awarded five contracts for community solar within the Public Service Company of New Mexico’s territory and one within the Southwestern Public Service Company’s territory. The developer is now facing significant delays in the interconnection process that are causing barriers “to anticipated ground-breaking and commencing commercial operations.” Because of those delays, SunShare said that significant incentives or consequences are needed to ensure there are not any delays in the interconnection process.

SunShare initially planned to bring projects online this year, but now says that its arrays will not be able to provide energy to subscribers until at least August of next year.

SunShare says it is too early to start signing up subscribers because the bill credits have not yet been defined and none of the projects have interconnection agreements in place with the investor-owned utility, .

“The best time to enroll low-income subscribers is after the projects are certain to move forward and the financing aspects are clear; this way, low-income subscribers won’t experience confusion, delays, or changing terms,” SunShare states.

SunShare also expressed concerns about the dual billing creating confusion for future subscribers.

Coalition for Community Solar Access

“It is unclear when selected projects will commence commercial operations due to various delays encountered in the interconnection process,” the advocacy group states. “Additionally, unknown interconnection costs mean there is less certainty that the specific project a customer is signed up for will reach commercial operation. Until projects complete the interconnection study process and sign an Interconnection Agreement, it is unclear which projects may have prohibitive interconnection upgrade costs, which could lead a project to withdraw from the program.”

There are waitlisted projects that could commence if a developer withdraws a chosen project from the community solar program.

The delays are not just because of the lengthy interconnection application process, though CCSA states very few, if any, projects have signed interconnection agreements. 

The investor-owned utilities challenged the community solar rules in court. You can read my coverage of the New Mexico Supreme Court ruling here. The appeal led to more uncertainty and delays.

Southwestern Public Service Company

Because SPS is a member of the Southwest Public Power Pool, it must work directly with that entity to complete interconnection studies. This could create delays that would not be seen in the PNM or El Paso Electric service territory. The interconnection studies examine how the influx of energy from the community solar array will impact the grid and whether upgrades to infrastructure might be needed.

If a community solar project has the potential to impact the transmission system, SPS says that further studies are needed to determine the extent of potential impacts.

But the delays are not only on the utility’s side. Delays may also occur on the developer’s side of the equation. 

For example, a right of way may be needed to connect the project to existing infrastructure.

“Interconnections may be contingent upon securing an easement to extend utility facilities to the point of interconnection at the generating site. When such easement does not exist, the utility must work to secure an easement from a landowner, and that process can be lengthy when going through negotiations or title research,” SPS states. “Delays could also occur when the developer must relocate their point of interconnection due to service territory conflicts that were not fully understood during the project selection process.”

Additionally, there are current supply chain constraints that can create delays in receiving necessary equipment for substations that may be needed to connect the community solar projects to the grid.

SPS says that if a project requires upgrades to the distribution system, the average time that it takes to design and construct these upgrades ranges from seven months to a year.

US Solar

The developer states that its projects will likely not break ground until the third or fourth quarter of 2025, though its project within the El Paso Electric service territory may begin construction earlier and could be in operation by the end of 2025.

“Every step of the interconnection process has taken longer than it should under existing PRC rules,” US Solar states.

US Solar has not yet begun the process of subscribing customers. This is for various reasons including the appeal to the New Mexico Supreme Court, though, it states that “fortunately, that cloud has now been lifted by the state Supreme Court.”

“The best practice is to acquire subscribers in the several months leading up to project completion and commissioning—not two to three years prior to that milestone and drive subscriber dissatisfaction, so we have not yet started direct subscription activity,” US Solar states.

Renewable Energy Industries Association of New Mexico

There are different challenges when working with different investor-owned utilities.

PNM has been able to procure the necessary interconnection equipment fastest, generally within 10 months compared to 19 months for EPE and 18 to 24 months for SPS.

But PNM also had delays “due to slow project review services by third-party consultants, internal approval delays, and the sluggish processing of application payments. These aspects have contributed to extended timelines for achieving interconnection agreements.” 

While EPE has a longer timeframe for procuring equipment, REIA states that the utility has “efficiently managed the earlier stages of conducting interconnection studies and securing necessary approvals.”

Meanwhile, SPS has the additional requirements for internal transmission studies that are aimed at assessing potential impacts to the regional transmission organization, Southwest Public Power Pool. REIA says this “significantly exacerbates the delay in moving projects forward.”

Public Service Company of New Mexico

PNM has had challenges with multiple projects that require the same feeders and substations. These can cause challenges with system capacity. Eight of the projects within PNM’s service territory require transformer upgrades at substations.

This can impact other people who are wanting to install solar.

“The biggest impacts that Community Solar projects are having on rooftop solar interconnections is the absorption of capacity on feeders in rural areas of the service territory,” PNM states. “That is to say, there are multiple instances of feeders being closed to new rooftop solar applications once the Community Solar project(s) on that feeder apply for interconnection. Homeowners are therefore not able to install and interconnect rooftop solar.”

PNM supports the dual billing system, which utility officials say will “reduce administrative costs, streamline the process of answering customer questions about community solar, and allow subscriber organizations to keep their customer agreements confidential.”

El Paso Electric

EPE states that “a reasonable timeframe to complete the study phase preceding the execution of an interconnection agreement is approximately 4 to 6 months.” 

The utility says that it has completed the study phase for all six of the community solar projects in its service territory and has tendered interconnection agreements.

Electric vehicles

The New Mexico Environmental Improvement Board is set to make a decision on Friday regarding whether to pause implementation of rules that would lead to increasing numbers of new vehicles being sold in the state. 

This comes amid a lot of misinformation about electric vehicles.

Emily Atkin, who pens the newsletter Heated, has a series addressing many of the electric vehicle myths prevalent across the country. Last week, Atkin focused on policy. This week, she examined myths from both sides of the debate. Atkin writes that there is no such thing as a “good” car in terms of environmental impact and instead the question is how bad is one vehicle in relation to another.

One of the key arguments in New Mexico is that there is not enough demand for electric vehicles.

Tesla saw a 9 percent decrease in sales during the first quarter of 2024. But, at the same time, Ford’s electric vehicle market started the year strong with an 86 percent increase in sales. 

According to the International Energy Agency, about 4 percent of the cars sold in 2020 were electric vehicles. By 2022, that had increased to 14 percent.

If New Mexico is to make a transition to electric vehicles, it will need to invest in more charging infrastructure, especially rapid chargers and charging stations in rural areas.

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