State regulators voted unanimously Wednesday to cancel a planned public hearing next week over a controversial rule that defines and caps the costs of renewable energy to public utilities and their customers.
The New Mexico Public Regulation Commission also voted to launch a whole new rule-making for the so-called reasonable cost threshold, or RTC. Wednesday’s vote allows an RCT rule approved in December, but never published or implemented, to take effect while the PRC conducts a new rule-making.
“Letting the existing rule go into effect is a good outcome,” attorney Steven Michel with Western Resource Advocates said of the vote. “I think reopening the rule is also a good outcome because there are some fundamental improvements that could be made to the rule.”
PRC chairman Ben Hall said controversy surrounding the commission’s recent actions on the RCT rule had prompted the five commissioners to reopen the issue. “It is better to start fresh,” Hall said. “Hopefully we’ll get a good rule-making that will suit everyone.”
The reasonable cost threshold is a complex rule that has a big impact on how public utilities boost renewable energy supplies while holding down consumer costs. “The RCT was a protection, a safety valve,” Michel said.
“Unfortunately, it has become this loophole to litigate every nickel and dime spent on renewable energy.”
The RCT act was put in place by lawmakers to ensure a state mandated requirement for more solar, wind and other renewable energy doesn’t cost utility customers too much money. Public utilities are allowed to charge their customers through rates to recover the costs of new infrastructure such as a solar power or natural gas facility. But the PRC is required to make sure those rates are reasonable for consumers.
It was left to the Public Regulation Commission to define the particulars of a renewable energy RCT in a rule. After more than two years of testimony, meetings and evidence, the commission approved an RCT rule in December on a 4-1 vote.
Less then a month later, with two newly elected commissioners on the board, PRC utility staff and large industrial power users urged the PRC to reconsider the rule. Newly elected Santa Fe commissioner Valerie Espinoza was asked by PRC attorneys to sign an order giving the commission an opportunity to rehear the rule.
PRC attorneys said at the time that “single signature” orders were routine. But staff were never able to produce similar orders issued for a similar purpose – to reconsider a rule.
The full commission later agreed to rehear a portion of the rule, preventing the RCT rule approved in December from being implemented until the case was finished. More than 1,000 written comments, many form letters, were submitted regarding the rule. A public hearing was scheduled May 9.
Hall said ongoing controversy over Espinoza’s single-signature order was one of the reasons the commission decided to hold a new rule-making.
Wednesday’s vote effectively vacates the hearing and allows the December-approved RCT rule to take effect 15 days after it is published in the state’s register. The new rule-making entails appointing a hearing officer and accepting testimony again from industry, utilities and renewable energy advocates. Michel said he hopes the new rule-making won’t simply rehash the same information everyone spent two years debating.
According to the PRC, the new rule-making will consider three things. It will look at the costs avoided and incurred by utilities due to using renewable energy. It will consider a discrepancy between the rule’s definition of a renewable energy certificate and the legal definition. (Renewable energy certificates are the intangible benefits of renewable energy that are traded separately from the actual electricity produced.)
Finally, the new rule-making will reconsider the mix of solar, wind, geothermal and other renewable energy required under the rule.
For more information about the PRC and to see agendas, visit www.nmprc.state.nm.us.
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