ABQJOURNAL OPINION/GUEST_COLUMNS: PNM Request Would Hurt Photovoltaic Industry

Wednesday, January 26, 2011

PNM Request Would Hurt Photovoltaic Industry

By Janet Bridgers
Board Member, New Mexico Solar Energy Association
          Last year, the New Mexico Legislature signed House Bill 181 into law. One of its provisions allows utilities to recover from the photovoltaic system owner "costs of ancillary and standby services." This may be why Public Service Company of New Mexico has requested in its current rate an 8 cents per kWh surcharge from small photovoltaic owners who install after Jan. 1.
        Though the passage of HB 181 has codified the provision, PNM's proposed "solar access" charge will kill the momentum of our photovoltaic industry. It is extreme in relation to the amount of energy solar photovoltaic actually contributes to the grid. It indicates that PNM has changed course since introducing one of the nation's first Renewable Energy Credit programs to actively discouraging these systems. The existing credit program compensates photovoltaic system owners for the considerable expense of installing photovoltaic solar and helps PNM meet its mandated supply diversity requirements.
        PNM's decision to request the solar access charge goes against the trend of other Western states. California, Colorado and Arizona conducted studies of the benefits and costs of photovoltaic and concluded the benefits exceed the cost and that no utility surcharge is warranted.
        HB 181 was a good faith effort to allow PNM fair compensation for supporting grid-tied systems, but PNM has apparently decided to exploit this provision in a way that negates the intent of the statute. We strongly recommend that the Public Regulation Commission reduce this surcharge to a symbolic level, such as .5 cents per kWh, to remain within the law without hurting the industry.
        Additionally, the Renewable Energy Credit program, along with other state and federal policies and programs has been successful in encouraging our solar economy. Solar is among the fastest growing industries in the New Mexico economy:
        • Customer grid-tied solar systems have increased by more than 14-fold, from 82 in 2006 to over 1,200 in 2010.
        • Grid-tied systems now generate over six megawatt-hours of electricity annually.
        • Demand for photovoltaic systems has created over 100 manufacturing, installation and service businesses and thousands of solar-related jobs in the state.
        The momentum and other developments in photovoltaic nationally and internationally have reduced solar system prices by 30 percent in recent years, which will, in turn, encourage thousands of other home- and small-business owners to invest in solar, as long as there is a foreseeable payback.
        Approval of the rate riders jeopardizes this progress. With the rate riders, demand for solar systems will wane, businesses will fold, and jobs will be lost, at a time when New Mexico is struggling with unemployment and economic recovery.
        Although solar-generated electricity still contributes only a relatively small amount to the grid, it is the fastest growing energy source in the state. The net-metering and energy credit programs must continue in order to nurture this industry to maturity.
        Policy supporting solar, as for any new and growing energy technology, must be stable. On-and-off-again policy will only lead to chaos and failure, as it did in the 70s. Support for the burgeoning solar industry has to continue until there are thousands of grid-tied systems generating hundreds of megawatt-hours annually. Only then will New Mexico realize the potential of its vast solar resource.
        Solar provides abundant clean energy. It is a fuel that will not peak, does not pollute and provides good-paying jobs throughout the state. It just makes sense to maintain development of a robust solar energy industry here.
        HB 181 gives PNM the right to request a reasonable rate rider, but PNM's proposed rate rider is neither reasonable nor defendable. The New Mexico Solar Energy Association urges the PRC to reduce PNM's proposed rate rider to a mere symbolic level for customers of new interconnected solar photovoltaic systems.

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