Shining a Light on the Attacks on Solar Energy

January 9th, 2015 · 2 Comments · energy policy, environment, journalism, regulation

By Denise Tessier

A year ago this month, I posted some of the 2014 new year’s goals for the powerful “bill mill” known as the American Legislative Exchange Council (ALEC), one of which was to protect polluters and attack clean energy sources by metering and charging those who produce their own solar energy.

A few months before, Huffington Post had reported an example of this how this scheme could play out, saying Arizona Public Service was given state approval to charge its roof-top solar ratepayers a monthly 70 cents per kilowatt generated. (APS, which has coal, nuclear, gas and oil-fired power plants, had originally proposed charging rooftop solar customers an additional $50-100 on their monthly bills.)

A year later, Public Service Company of New Mexico is asking the New Mexico Public Regulatory Commission to allow it to charge solar rooftop generators a fee.

The Albuquerque Journal revealed this proposal in a lengthy story that ran on the front page of its print edition Dec. 21, but the solar fee information was pushed toward the end of the story to an inside page simply by virtue of the fact that PNM was already drawing fire and criticism from business and consumer advocates for proposing overall rate increases for 2016 –12 percent for small businesses like restaurants and 9.3 percent for residences.

PNM’s stated rationale for the rate increases was that it needed to raise annual revenue by about $107 million, or 12.3 percent, “to cover capital investments in generating plants and electric infrastructure through 2016,” according to the story by Kevin Robinson-Avila. The increase “would also allow PNM to recover declining revenue cases by energy efficiency programs that have significantly lowered electricity consumption.”

The story, headlined “Battle brews over PNM rate hike,” had a lot of ground to cover because of the breadth and complexity of PNM’s proposals.

So, it is to the Journal’s credit that its Business section gave Robinson-Avila the opportunity to focus  solely on the solar rooftop fee in a follow-up story that was showcased on the Dec. 29 cover of Business Outlook. “Shadow On Solar” covered two full inside pages of the section and continued on to portions of two additional pages.

The proposal by PNM – which installers said would simply “collapse” any incentive for individuals and companies to pursue roof-top solar panels – absolutely merited its own story.

Robinson-Avila reported that 4,400 customers now have solar systems linked to PNM, customer-sited photovoltaic systems that produce 38 megawatts of electricity. These systems are connected to PNM, which buys and resells the energy produced by the roof-top panels, giving those solar owners “renewable energy credit” to use when those customers need to buy electricity from PNM, as they do. PNM has made almost $23 million in REC payments to customers since 2006, the story said.

This “buyback” system has been allowed in New Mexico since 1980, when it first became apparent that solar energy had great promise in the state.

As Robinson-Avila’s story pointed out, those with solar panels generally produce most of their electricity they need, but at times will still buy electricity from PNM. According to the story, those customers now save about $27 a month on their electricity bills, compared to what they would otherwise pay PNM. Even after tax rebates and incentives for installing solar go away in 2016, solar users would still expect to save $1.40 a month.

But the story continued by laying out the implications of this increase, saying:

If PNM’s proposed monthly fee on solar customers is approved, the 6-kilowatt system owner would pay $36 per month to PNM (which) would reduce the savings with today’s subsidies from a $27 per month gain to a $9 per month loss. Without subsidies, it would turn the $1.40 gain into nearly a $35 per month loss.

. . .industry representatives say the fee – which could range from about $21 per month for small systems to $36 or more for the larger ones that many homeowners are now installing – could undermine the economic benefits of going solar . . .

“This is the fight of the century for us,” said Kevin Goodreau, vice president for business development at Direct Power & Water Corp. in Albuquerque, which designs and manufactures racks and other components for solar systems. “We’ll fight it tooth and nail. . . .”

PNM clearly is looking solely at its bottom line in coming up with this proposal as a way to increase its revenue. The official justification for charging solar producers is that it’s a “fairness” issue.

A PNM spokesman wrote the Journal in an email:

This is a fairness issue. A central question is whether other electric customers should continue to pay for PV (photovoltaic) systems on other customers’ homes and businesses.

PNM says the fees would help pay for grid operating and maintenance costs that solar customers pay less for as their electric consumption declines. Gerard Ortiz, PNM vice president for regulatory affairs, told the Journal, “Those costs are now spread among customers who don’t have PV.”

Looking at the numbers and deciding solar customers are a problem is disingenuous, however, considering that in creating electricity, roof-top solar producers reduce the amount of electricity PNM needs to provide, which should be saving PNM money. And reducing the need for coal-fired production would also reduce pollution, or so it would seem.

Journal readers have picked up on this paradox, as is reflected in excerpts from their letters to the editor (Dec. 30):

. . .Instead of saying “Good job! Thank you” for achieving this conservation goal, PNM is accusing me of being a mooch and planning to charge me more than it charges my neighbors! – Willard Steinsiek, Albuquerque

. . .Of course PNM doesn’t mention that many solar systems put more power back into the grid than they use, and the time of day that they put power back into the grid is during peak-use times, which helps lower stress on the infrastructure. And PNM doesn’t mention that while they do pay a small amount for solar produced power, they turn around and sell it to other users for a profit during those most expensive and profitable peak hour times. . . .– Hunter Mortley, Albuquerque

. . .We invested in the infrastructure on our end to build our mini power plant. We are not freeloading off the PNM infrastructure; we are the future of energy in America. Corporations profit when there is a centralized system, and profit less when there is a distributed system. That is the conversation here. . .– Wendy Tanner, Albuquerque

It won’t be long until I plant a garden in my backyard and go on a diet and therefore have to pay higher rates at the grocery store to offset the increased cost to other customers for my not buying as much food. – Jim Buchanan, Albuquerque

. . .Perhaps it’s time to consider public ownership of this “public utility.” – Ted Cloak, Albuquerque

The industry, of course, also questions PNM’s premise that “by consuming less of PNM’s electricity, solar customers should be charged more to pay for fixed costs,” as Robinson-Avila put it. He quoted Patrick Griebel, general manager at the Affordable Solar Group in Albuquerque and a board member of the Renewable Energy Industries Association, who said:

PNM is taking a fairly radical position that customers don’t have a right to buy less of their product. If kids move out and go to college and the parents start using less electricity, should they get a surcharge for that too? We believe that’s a slippery slope and a fundamentally flawed argument.

Robinson-Avila added that national solar groups are expected to intervene against PNM when it makes its case for the solar fee before the Public Regulation Commission. One of those groups is The Alliance for Solar Choice, or TASC, whose spokeswoman said:

Utilities nationwide are trying to alter rooftop solar programs because it threatens their profits. We’ve seen almost two dozen utility cases like PNM’s in about 20 different states get defeated, and we plan to intervene in the PNM rate case as well.

PNM has responded to these huge stories in the Journal with a full-page ad in the newspaper, which ran Sunday (Jan. 4) on A8.

“MORE SOL. LESS COAL. PNM is bringing more solar energy to all of New Mexico,” the ad beamed.

Under four sub-headlines, the ad said:

Our plan to close two coal-fired generating units at San Juan Generating Station will result in 36% less coal capacity. That’s less coal . . .

Three new solar centers came online in 2014 and four more are planned in 2015. By the end of this year, PNM will have invested almost $270 million in utility-owned solar power, enough to power more than 40,000 average homes for a year. . .

. . .Our goal is to deliver sustainable, diverse and affordable power in ways that increase the use of renewable energy while keeping power affordable for all New Mexicans.

The fourth sub-head urged readers to “Talk to us.”

Meanwhile, in Arizona, APS recently sought and gained approval to actually compete with private companies and will start installing rooftop solar panels on homes, according to an Associated Press story that ran in the Journal Dec. 26.

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