ALBUQUERQUE, N.M. — Solar energy advocates are suing the city of Farmington for charging residential consumers with solar systems a monthly fee of $7.28 for each kilowatt of electricity they produce.
The Farmington Electric Utility System says the fee, which took effect in 2017, aims to recover fixed costs to continue providing electricity to solar customers when the sun doesn’t shine.
But solar advocates say the fee is “discriminatory” and “illegal” under the federal Public Utilities Regulatory Policies Act, which Congress passed in 1978 to protect consumers with self-generating systems from unreasonable electric rates that discourage them from pursuing renewable energy.
The national advocacy group Vote Solar partnered with Earthjustice to sue Farmington Aug. 16 in U.S. District Court in New Mexico, representing 11 residential and small business customers with solar systems.
Earthjustice attorney Dave Bender called it an “anti-solar charge” that most regulated utilities in New Mexico and other states have discarded because of public backlash. Earthjustice and Vote Solar have helped defeat similar fees in five other states, including an effort by Public Service Company of New Mexico to impose a solar charge in 2014.
“The (Farmington) utility incorrectly presumes to be entitled to more of its customers’ money, even when those customers produce their own electricity instead of buying it from the utility,” Bender said in a statement. “That’s wrong. What’s more, it’s illegal.”
Vote Solar program director Rick Gilliam said the fees are killing the solar industry in San Juan County, where the Farmington utility serves about 45,000 customers.
Residential plaintiffs in the suit face monthly charges ranging from a low of $13.40 for a small, 1.84 kilowatt installation to $80 per month for an 11 kilowatt system. One commercial customer, who has a higher rate of $8.05 per kilowatt as “a small power producer,” faces a $162 monthly fee for a 20.1 kilowatt system.
“The surcharge is so high it makes solar virtually uneconomical for customers,” Gilliam told the Journal. “…As a result, the solar market in Farmington is dead. Nobody will install rooftop solar with that kind of penalty.”
In general, unregulated utilities like Farmington, which the City Council oversees, have more freedom than state-regulated ones like PNM to impose solar fees, said Earthjustice attorney Sara Gerson.
“Utilities that have generally been offenders are ones that don’t answer to ratepayers,” Gerson told the Journal.
Farmington representatives said they couldn’t discuss a pending legal case. But spokesperson Georgette Allen said the city did a cost-of-service study to determine fair rates so that customers without self generation don’t carry a greater burden for fixed-cost recovery than ones with solar systems.
“The study was completed with a qualified and experienced company, knowledgeable in rates and rate design,” Allen told the Journal in an email. “The multi-month process was vetted through the Municipal Public Utility Commission and approved by the Farmington City Council.”