PRC to take comments on rule that impacts pace of renewable energy projects 

The Public Regulation Commission will take public comments May 9 on revising a new rule that determines how much renewable energy utilities can add each year without increasing their customers’ rates too much.

The commission voted 4-1 in December in favor of the reasonable cost threshold rule. The rule impacts public utilities’ ability to meet a mandated state standard for providing electricity from renewable sources.

The state requires Public Service Company and other investor-owned utilities to acquire 15 percent of the electricity they sell from solar, wind and geothermal sources by 2015 and 20 percent by 2020. But customers ultimately pay for the costs of adding renewable energy to the grid. Companies that can show that adding renewable energy projects will exceed the “reasonable cost threshold” for their customers can ask the PRC for a delay or an exemption from the state’s renewable energy standard.

The way renewable energy costs are calculated, then, directly impacts how much solar, wind and geothermal power the utilities can add each year.

The rule approved in December grew out of two years of hearings, testimony and public comments. However, the PRC, with two new members, voted 4-1 in early March to reopen a hearing on the rule after it was protested by PRC staff, the attorney general, PNM and the New Mexico Industrial Energy Consumers.

Utility companies must file written comments on the rule by April 17. Members of the public also can file written comments by then. Replies to written comments are due April 26.

New evidence won’t be accepted in the case. Commenters are limited to considering the central point of contention in the rule – what to include in calculating the costs and the savings of renewable energy.

Utilities save money on coal and natural gas when they use solar and wind energy. That’s the “avoided fuel cost” everyone agrees should remain in the rule.

But what about the amount of money utilities could save by using cleaner fuels that make it cheaper to meet environmental regulations, such as reduced carbon emissions? That’s included in the rule now, but PRC staff and utilities think it should be taken out.

What about the fuel utilities use to provide electricity when the wind doesn’t blow and the sun doesn’t shine? Renewable energy advocates say that’s already been taken into account by utilities. Others disagree and think it should be added as a cost in the rule.

The rule, say some, is overly complicated and still makes it too complex to figure out the costs of renewable energy.

Steven Michel, counsel for Western Resource Advocates, said he hoped renewable energy advocates and utilities could collaborate on a simpler way to calculate renewable energy costs. He said a similar effort, headed by PRC member Pat Lyons, had led to an energy-efficiency bill still awaiting legislative action before the session ends Saturday.

Camilla Feibelman, new executive director of the Rio Grande Chapter of the Sierra Club, said the reasonable cost threshold rule, as written, would cost consumers an additional 50 cents to $2 per month for renewable energy. The amount residents would save by simply making homes more energy efficient would more than offset that amount, she said. “My own energy-efficiency efforts at home have saved me $25 a month. This is not a money issue.”

The public hearing will be at 9 a.m. May 9 at the PRC hearing room in the PERA Building, 1120 Paseo de Peralta.