State regulators voted Wednesday to reopen a hearing on part of a rule approved last year that determines the costs of renewable energy to utility companies and their customers.
The Reasonable Cost Threshold, or RCT, rule plays a key part in determining how much renewable energy companies add each year without raising customer rates too much. The rule, approved in December, is the first successful attempt to come up with a method for calculating the costs and benefits to utilities of adding renewable energy from solar, wind and other sources.
Advocates for the rule said it was a compromise reached by utilities and renewable-energy advocates after more than two years of testimony and two public hearings. They worry that reopening the hearing risks weakening the rule and giving utilities more opportunities to avoid meeting a state-mandated renewable-energy standard.
“The rehearing is a waste of the public’s time and money,” said Camilla Feibelman, the new director of the Rio Grande Chapter of the Sierra Club.
The Public Regulation Commission’s utility staff had concerns with the rule from the moment the PRC approved it in December. The staff joined with the state attorney general, Public Service Company of New Mexico and the New Mexico Industrial Energy Consumers to appeal the rule in January.
PRC attorney Rick Blumenfeld convinced four of the five commissioners on Wednesday that the rule as written will hide the true cost of renewable energy to customers.
Commissioner Karen Montoya voted against rehearing the rule, saying she preferred to leave the prior decision in the past and, if needed, open a new hearing on the rule with a “well defined scope.” Two of the commissioners who voted for the rule in December – PRC Chairman Ben Hall and Commissioner Theresa Becenti-Aguilar – voted to rehear it Wednesday. Commissioners Pat Lyons, who opposed the original rule, and Valerie Espinoza, also voted to rehear the rule.
Blumenfeld told the commission that renewable energy in New Mexico “is an emotional issue. But it should not be decided based on emotion. It should be based on math, it should be based on science.”
But that math all depends on who is crunching the numbers and how.
Under state law, investor-owned utilities such as PNM have to obtain 15 percent of their power from renewable sources by 2015 and 20 percent by 2020. But they have to do that at a “reasonable cost” to consumers.
The PRC decides the renewable-energy cost cap for each utility. If the costs of adding renewable energy threaten to push customer rates above the threshold, utility companies can ask to be exempted temporarily from meeting the state standards.
Renewable-energy advocates say the way RCT is calculated is key to how much wind and solar a utility company can add. It is important, they say, to include all the provable benefits of renewable energy to customers.
The RCT rule proposed by then PRC member Jason Marks set the RCT at 3 percent.
Utility director Dwight Lamberson had originally proposed last year an RCT that increased to 5 percent over the next few years, giving utilities more leeway to meet the state renewable-energy standard.
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