N.M. Supreme Court explains rejection of appeals to community solar rules

Jan. 16—New Mexico’s high court on Thursday explained its reasons for rejecting a series of appeals by electric utilities challenging regulators’ rules for a statewide community solar program.

The solar program — which promises to provide significant savings on electric bills for many low-income New Mexicans — has seen yearslong delays amid disputes by the state’s three investor-owned power companies.

The New Mexico Supreme Court in March 2024 unanimously ruled in favor of the state Public Regulation Commission in the case, issuing an order hours after attorneys for the companies, as well as solar power trade and advocacy groups, had delivered oral arguments. The justices issued a 58-page opinion Thursday explaining its decision.

“We hold that the Utilities, in their various challenges, failed to meet their burden in demonstrating that the [Community Solar] Rule is unreasonable or unlawful in light of the [Community Solar] Act,” Justice Briana H. Zamora wrote in the opinion.

Spokespeople for the three utilities — Public Service Company of New Mexico, Southwestern Public Service Company and El Paso Electric — all declined to comment on the ruling.

The community solar program is intended to allow power customers — including business and nonprofit organizations — to purchase subscriptions to local solar projects and in turn receive credits for their electric bills. The state Legislature passed a law directing the Public Regulation Commission to implement the program in 2021. Each project in the state will be required to meet a quota of 30% low-income subscribers, and the commission estimates subscribers could reduce their electric bills by an average of up to 30%.

The utilities, led by Southwestern, appealed many aspects of the program to the Supreme Court, including the calculation of solar bill credits. The companies argued they should be allowed to subtract from customers’ credits the transmission costs connected with community solar projects.

The court rejected the argument, along with a handful of other objections to the program, stating in the opinion, “We hold that prohibiting the subtraction of transmission costs from the bill-credit rate is a reasonable exercise of the policy-making authority delegated” to the PRC.

The court noted in its March 2024 order the appeals had “frustrated attempts to implement the Community Solar program” and stated the commission should quickly move forward.

Renewable energy trade groups and advocates who had intervened in the appeal in support of the PRC rules warned financing for many of the approved projects could be at risk as court appeals further delay development.

Advocates celebrated the court’s ruling — and its implications for the program — Thursday.

“This ruling is significant because it upholds the method for calculating the community solar bill credit rate, outlined by the prior commission, which ensures that subscribers receive fair compensation for the solar energy they use,” said Christian Casillas, executive director of Coalition of Sustainable Communities New Mexico.

Mariel Nanasi, executive director of Santa Fe-based organization New Energy Economy, also praised the court’s decision and said the utilities’ appeals amounted to “grasping for straws to twist the plain meaning of the statute.”

“The utilities have been fabricating confusion and creating disputes where there aren’t any,” she said Thursday. “It’s their modus operandi to prevent competition.”

Nanasi pointed to the still-delayed development of community solar projects. “Unfortunately, the utilities have continued to erect barriers and stalling mechanisms that have frustrated actual implementation, and we now see no projects on the ground,” she said.

The commission has approved dozens of projects for the first round of the community solar program but acknowledged long delays in getting it off the ground, partly due to the utilities’ disputes over the rules and costs.

The state agency increased the cap for solar capacity for a second round of project bids. Still, the first round of approved projects have yet to break ground.

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