A hearing examiner has recommended state regulators approve a Public Service Company of New Mexico request to add a new renewable energy charge to customer bills — and for the first time include a line item about the cost.
Until now, renewable energy investments have been recovered through base rates approved by the PRC and invisible to ratepayers, and the proposal to specifically identify the charge for renewables drew the ire of environmental groups.
“Line-item treatment of renewable energy on bills creates a target for customer dissatisfaction,” said Steve Michel, chief counsel for Western Resource Advocates. “It singles out renewable energy for extraordinary treatment, and we think that’s being done by design.”
Peter Gould, general counsel for Industrial Energy Consumers, said environmentalists want to hide renewable energy expenses from the public.
“I think they don’t want ratepayers to see the costs,” Gould said. “It’s the commission’s decision, but we will always come down on the side of price transparency.”
PNM had recommended a special charge of 2.1 percent to cover the cost of investment in renewables such as wind and solar since 2011. The rider would have raised about $7.9 million this year and $23.2 million in 2013.
But it’s now unclear how much more customers would pay because hearing examiner Carolyn Glick recommended a different way of calculating it than PNM had requested.
Glick said she expects the Public Regulation Commission to hold hearings in July for a final ruling and PNM must submit proposed charges to the commission.
“We’ve reviewed the recommended decision and overall, we’re very pleased,” PNM executive director of regulatory services Gerard Ortiz told the Journal.
Company spokeswoman Susan Sponar said the rate rider will save customers money by avoiding interest charges that would accrue if PNM waited to recover renewable investments in its next rate case.
The utility wants to recover costs for building five solar photovoltaic plants since 2011, which together produce enough electricity to power about 7,000 average New Mexico homes.
The rate rider also would pay for some investments in wind energy and incentive payments the utility made to help customers install individual solar PV systems.
Environmental organizations opposed the rider and want PNM to continue recovering renewable investments through the traditional hearing process in rate cases.
But PNM and its supporters, which include New Mexico Industrial Energy Consumers, the Attorney General’s Office and PRC staff, said a rate rider is more appropriate because state law forces PNM to acquire renewable energy whether it needs it or not.
That puts solar, wind and other clean energy into a “special category” of investments that differs from fossil fuels and merits a different method for cost recovery, Gould said.
Under the state’s renewable portfolio standard, public utilities are required to derive at least 10 percent of their electricity from renewable sources this year, 15 percent in 2015, and 20 percent in 2020.
“I think the hearing examiner got it right,” Gould said.
Glick also supported PNM’s request that the new charge be included as a line item on bills that clearly highlights the costs of renewable energy to customers.
That’s something environmentalists opposed because it singles out renewable energy expenses without showing the benefits, such as lowering the amount of fossil fuels the company must purchase, Michel said.
His group intervened in the case against PNM along with the Coalition for Clean Affordable Energy and the Sierra Club.
He said environmentalists will press their case on the line item when the full commission holds hearings.
“If you’re going to identify the costs for utility services, then to be fair, you should have a line item for all costs, including coal, nuclear and natural gas,” Michel said. “That’s still an issue for us.”
Glick did recommend that the new line item also show the benefits of renewable energy by including PNM’s monthly charges for fuel purchases immediately after the renewable energy line item on bills to demonstrate how solar, wind and other clean energy procurements contribute to lower fossil fuel costs.
In addition, Glick accepted environmentalists’ request that the renewable energy charge be calculated on a per-kilowatt-hour basis, reflecting the amount of renewable energy each customer consumes, rather than as a straight percent of customers’ bills as PNM had proposed.
— This article appeared on page A1 of the Albuquerque Journal