ALBUQUERQUE, N.M. (AP) — A proposal that would allow electric utilities to choose their alternative energy sources rather than be required to use solar as part of the mix has New Mexico’s solar industry worried.
The industry’s leaders and other renewable energy advocates tell the Albuquerque Journal (http://bit.ly/TS5mbI) that the current mix mandated by state law is needed to sustain New Mexico’s budding market for solar installations.
The Renewable Energy Industry Association and the Green Chamber of Commerce have launched a petition and letter campaign to encourage state regulators to keep the diversity rules.
“If they eliminate them, it would substantially reduce the pressure and leverage we now have to continue building solar programs,” said Randy Sadewic, president of Santa Fe-based photovoltaic installer Positive Energy Solar. “It would have a very adverse effect on the industry.”
The attorney general’s office and New Mexico Industrial Energy Consumers are pushing the Public Regulation Commission to eliminate the requirement. They contend it drives up costs for customers by forcing utilities to buy more expensive resources, such as solar and geothermal power, rather than cheaper alternatives such as wind.
Under the state’s renewable portfolio standard, utilities are obligated to generate 10 percent of their electricity from renewable sources, with certain percentages coming from solar, wind and other renewable resources. The standard will jump to 20 percent by 2020.
The diversity requirement is part of the Public Regulation Commission’s current rule-making process to establish a methodology for utilities to calculate costs for renewable energy.
To protect customers, the PRC set an annual cost cap that limits renewable energy expenditures to 2.25 percent of customers’ bills. After 2015, it will be 3 percent.
Ensuring utilities use a certain mix of renewable energy has made compliance with the cost cap difficult.
Peter Gould, general counsel for Industrial Energy Consumers, said compliance would be easier if utilities could choose the most affordable alternative.
“Diversity quotas have been the single largest factor driving up procurement costs,” he said.
PRC staff is proposing adjustments in the current mix to make it more flexible for utilities.
Solar industry leaders say they’re open to adjustments but would oppose huge cuts.
“It’s the wrong answer to zero out solar, but there’s plenty of room for discussion about the right amount for a diverse energy portfolio,” said Allan Oliver, CEO of the Green Chamber.
Commissioner Jason Marks said he’ll push for a vote on the diversity rules in mid-December. Marks and Commissioner Doug Howe, who have both been active in the case, will leave the commission at the end of the month when their terms expire.