COMMENTARY: Thanks to due diligence by the New Mexico Public Regulation Commission, current and potential solar customers in El Paso Electric’s service area will thankfully not be put into an unfavorable rate class.
In its rate filing, El Paso Electric (EPE) had proposed to create a separate rate class for solar customers, thereby reducing some of the financial benefits of solar that have been codified in state law provided by net metering. The PRC ruled that this request by EPE violated the law and rejected it.
This action comes as a relief to solar customers and Las Cruces-area leaders who have taken a strong stand in support of the future of solar power. Since many studies in neighboring states show that solar on homes and businesses provides a net benefit to the power grid (e.g. eliminates transmission losses, reduces peak demand, stimulates local jobs, etc), it seems unlikely that El Paso Electric would take on the battle to charge solar customers more than other customers.
In addition, local solar customers have greatly benefitted EPE. Currently, the utility pays solar customers an average wholesale price of 5 cents per kilowatt-hour for excess energy and then sells it to their next door neighbor for about 13 cents, while suffering virtually zero transmission losses. A tidy profit, for sure.
Solar users reduce peak demand
In their current rate case, EPE is requesting increased revenue because of the new fossil fuel generating facilities that they have built in order to have enough capacity to meet peak demand (plus an excess safety factor).
In EPE’s own filing, they show that their customers with solar place their peak demand on the grid around 7:30 p.m., while EPE’s overall peak is at about 4:30 p.m..
This flattening of the demand curve means that the more residents install solar, the lower EPE’s overall peak and fewer new generating facilities they will have to build. That will save us all money.
Apparently, after all of these benefits, our utility companies have difficulty realizing that solar is an effective, popular source of energy among consumers and is here to stay. El Paso Electric would be wise to note that as more and more solar systems are installed, the renewable energy industry’s voice is growing, amplified by thousands of happy customers who are generating their own power.
A booming industry
Despite an obvious lack of support for renewable energy, as demonstrated by this unsuccessful move to penalize solar customers, El Paso Electric still claims it is committed to supporting the development of renewable energy in the region.
Perhaps the utility should first engage in a dialogue with its customers and the renewable energy industry rather than continue pursuit of new rate cases that penalize local solar users.
Solar installation has become a booming industry and job creator in southern New Mexico, providing jobs for 1,600 New Mexicans and continuing to be a source of affordable energy while also reducing greenhouse gases.
Slowing that momentum serves no one.
Westbrock is branch manager for Positive Energy Solar in Las Cruces and a frequent intervener in PRC cases involving solar.