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Thursday, February 04, 2010
3rd-Party Generation Weighed Legislature May Expand Utility Act
Copyright © 2010 Albuquerque Journal
By 2010 Michael Hartranft
Journal Staff Writer
State lawmakers are considering legislation that would expand the Public Utility Act to govern third-party renewable energy generation and allow public utilities to recover costs related to the impact on their services.
Passage likely would head off appeals of a recent Public Regulation Commission decision on the issue, said Ron Darnell, vice president of regulatory affairs at PNM, one of the parties that filed a notice of appeal with the state Supreme Court.
The measure is a "consensus bill" supported by utilities, electric co-ops and environmental and renewable energy groups, he said.
"The impetus behind it was really to get the rules of the road set correct so that all parties would know how third-party transactions would roll out and also give certainty that they could roll out as early as next year," Darnell said.
The PRC ruled in December third-party developers that install renewable energy generation systems — such as solar arrays — on customers' property and sell the electricity to them are not public utilities subject to state regulation. PNM and others argued the Public Utility Act doesn't permit such arrangements.
Bills introduced in the House by Rep. Jose Campos, D-Santa Rosa, and Senate by Sen. William Payne, R-Albuquerque, would add a section to the act, which in effect declares renewable generation systems of the type addressed in the PRC ruling are not public utilities. There is a provision for utility companies to recover the cost of "ancillary" and "standby" services to ensure reliability when a distributed generation system is interconnected with their system.
"The sun doesn't always shine, yet the utility has to stand ready to serve that load," Darnell said, explaining standby service.
"This ... is a good first step in dealing with some of the important issues that are going to come up as solar distributed generation becomes more prevalent on our electrical system," said Brian Cassutt of the Renewable Energy Industries of New Mexico.
The House bill, as of Wednesday, has been approved by the Energy and Natural Resources Committee and is now with the Business and Industry Committee. The Senate bill is in the Conservation and Industry Committee.
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