State regulators have reopened the debate over how utilities should calculate renewable energy costs, granting a request by the state Attorney General’s office and industry groups to rehear the case.
The Public Regulation Commission in December changed the cost-calculation rule to require utilities to include savings from avoided fossil-fuel purchases and new plant construction in calculating net costs for procuring renewable energy. Renewable advocates contended such factors are critical to determining the real cost of alternative energy. Two PRC members who backed the measure, Doug Howe and Jason Marks, have since left office.
On Wednesday, the commission voted 4-1 to reconsider the change. Karen Montoya cast the no vote.
“I think avoided costs should be fuel costs only, not capacity costs because that’s so hard to define,” said Commissioner Pat Lyons, who cast the lone vote against the change in December.
PRC Chairman Ben Hall and Theresa Becenti-Aguilar, who backed the rule in December, also voted for the rehearing. “The avoided cost issue, the capacity issue, I decided my vote was the wrong way to go in December,” Hall said.
The cost-calculation rule is used to determine if renewable projects fall within a PRC-imposed price cap on what utilities can spend to comply with the state’s renewable energy mandates.
In a joint motion for a rehearing, the Attorney General’s Office, PNM, PRC utility staff and New Mexico Industrial Energy Consumers argued only fuel and purchased power costs that are avoided in the same year an investment is made in a renewable should be considered.
“Avoided environmental and capacity benefits are hard to measure,” PNM spokeswoman Susan Sponsor said. “They may be speculative and, to that extent, actually mask the cost to the customer.”
The Sierra Club Rio Grande Chapter opposed a rehearing.
“Changes to the rule could either significantly weaken the development of renewable energy… or strengthen utilities’ responsibility to clean up their pollution and bolster renewable energy businesses,” said Denise Fort, chapter liaison to the state Coalition for Clean, Affordable Energy, in a statement.
Under PRC rules, the commission must rehear the case by May 15, Lyons said.
— This article appeared on page B1 of the Albuquerque Journal