ALBUQUERQUE, N.M. — The Public Regulation Commission approved a new way on Tuesday for utilities to calculate renewable energy costs but kept the current price caps that limit the impact on consumers.
The commission also voted to maintain “diversity requirements” that obligate utilities to buy a specific percentage of solar, wind and other sources when complying with the state’s renewable portfolio standard. And they supported inclusion of savings from avoided fossil-fuel purchases and new plant construction when utilities calculate net costs for procuring renewable energy.
Those issues had become contentious in the rule-making process, which began in June 2011.
During hearings this year, proposals to eliminate diversity requirements riled renewable advocates, who feared solar development would suffer as utilities instead opted to buy “least-cost” renewable electricity.
However, the PRC voted to retain diversity, albeit with changes that raised wind requirements from 20 to 30 percent of a utility’s clean energy and lowered the “other” requirement for things like geothermal and biomass from 10 to 5 percent. The current 20 percent solar mandate was left unchanged.
Green Chamber of Commerce CEO Allan Oliver said the ruling gives small solar businesses “greater security going forward.”
A decision to broaden avoided expenditures used to calculate net costs of alternative energy also pleased renewable advocates. They wanted future savings from avoided construction of natural gas plants, and from reduced compliance costs with federal laws on fossil-fuel emissions, included in calculations.
Utilities and PRC staff wanted only avoided fuel purchases included to sidestep speculative calculations of future savings.
In addition, during the rule-making process, PRC staff recommended an increase in the cost cap, or renewable cost threshold, that limits clean energy expenditures to 2.25 percent of customers’ bills this year, and 3 percent after 2015. Raising the cap, staff said, would make it easier for utilities to comply with the state’s renewable mandates, which obligate them to derive 10 percent of their electricity from clean energy today, 15 percent in 2015 and 20 percent in 2020.
In the end, the PRC voted to allow more avoided costs and maintain the price cap at current levels.