SANTA FE -- The state Supreme Court issued an opinion upholding regulations for a program allowing electric utility customers to buy power from community solar projects.
In a unanimous opinion, the Court rejected arguments by Southwestern Public Service Company, Public Service Company of New Mexico and El Paso Electric Company that a rule adopted by the Public Regulation Commission (PRC) in 2022 violated the state's Community Solar Act.
"We hold that the Utilities, in their various challenges, failed to meet their burden in demonstrating that the Rule is unreasonable or unlawful in light of the Act," the Court wrote in an opinion by Justice Briana H. Zamora.
The written opinion provides the legal reasoning for a decision announced verbally from the bench after the Court heard arguments by lawyers in the case in March.
The community solar law allows residential and certain other utility customers, including small businesses and nonprofits, to purchase electricity from local solar energy projects through a subscription. A utility takes the power from the community solar array and delivers it to subscribing customers through the company's distribution lines. Subscribers receive a credit on their utility bills for their share of power from the local solar project. The program is intended to allow renters and others to receive solar power if they are unable to install rooftop or on-site solar arrays.
In appealing the PRC regulations, the utilities contended that the commission wrongly prohibited them from passing along to subscribers the costs of transmission of power to the utility's distribution system -- the lines delivering electricity to customers' meters.
Higher voltage transmission lines move electricity from a power generating facility to the distribution system. By deducting transmission costs from the subscriber's bill credit, the utilities argued, customers who do not participate in the community solar program improperly subsidize the subscribers. The Court disagreed.
"We hold that prohibiting the subtraction of transmission costs from the bill-credit rate is a reasonable exercise of the policy-making authority delegated under the Act to the New Mexico Public Regulation Commission," the Court wrote.
Because the law makes no mention of transmission expenses but explicitly prevents utilities from passing along distribution costs to community solar subscribers, the Court explained, it is "highly persuasive of the Legislature's intent not to subtract transmission costs" from the electric rate used to determine a subscriber's bill credit.
According to the PRC, the Court noted, electricity generated by a community solar project is distributed and consumed locally without the use of a utility's transmission system.
The Court rejected other challenges to the PRC regulations, including an argument by utilities about the costs of connecting community solar energy generators to the electric grid.