The story went like this: you could install solar panels that would generate electricity on your roof. When the sun was shining, you’d generate enough to power your house and then your meter would run backwards and the power company would send you a check instead of a bill. How cool was that!
That works, and it’s called “distributed generation,” but the real world has complications. One complication is that the power generated while the sun shines is not stored. The utility still has to provide another source of power to turn the lights on at night.
Beyond that – – no surprise – – utilities don’t like having to buy back power. That’s not unreasonable. Utilities have a mandate to provide reliable power all the time and must build and maintain costly infrastructure to meet that requirement.
The more solar capacity you have on your house, the fewer hours you will buy. Therefore, the cost to deliver power to your house is more expensive per hour than for the typical household. To compensate, the utility does not pay you nearly as much for the power you sell as you pay for the hours you buy.
The price of power today to New Mexico homeowners is about 12-13 cents per kilowatt hour, varying with each utility. What the utilities pay back also varies.
Utilities have tried to squeeze a little more profit out of solar powered homes by adding surcharges. A national organization called Vote Solar challenges these surcharges on behalf of consumers. Recently in New Mexico, Vote Solar has intervened in several rate cases before the Public Regulation Commission. It’s represented here by former PRC Commissioner Jason Marks.
PNM tried to get distributed generation surcharges in 2011 and again in 2015. Each time, it gave up that request as part of a global rate case settlement. The 2015 proposal was $6 per kilowatt (not kilowatt hour), roughly $18 per month for a typical distributed generation customer. PNM’s original 2015 case was dismissed in spring 2015 for technical issues. When the case was refiled in the fall, PNM agreed with Vote Solar not to include a surcharge for distributed generation.
Southwest Public Service, which serves parts of southeastern New Mexico, had a surcharge of 1.8 cents per kwh and raised it in 2012 to 3.7 cents. They attempted to increase it again in 2016 to 4.8 cents but, according to Marks, Vote Solar intervened. Marks said Vote Solar prevented the increase and negotiated a change so the surcharge applies to fewer kilowatt hours.
El Paso Electric serves the Las Cruces area. Marks said El Paso Electric tried a different approach. EPE tried to segregate distributed generation customers into a separate rate class, which might enable EPE to charge more in the future. That was defeated after a Vote Solar intervention, based on PRC rules that prohibit discrimination between classes of customers.
Even though utilities’ advertising encourages efficient energy use, they make less money when consumers buy less power. This reality does not fit the model under which these “regulated monopolies” (or the cooperatives that serve the rural areas of New Mexico) were developed.
Rooftop solar make sense for a number of reasons. Central New Mexico experienced a massive power outage a few weeks ago. Homeowners who have rooftop solar could look forward to their refrigerators and home computers starting back up in the morning, no matter how long the outage might last.
The economics of distributed generation will continue to improve as the cost of installation goes down. In addition, decentralized power generation could be a significant benefit to national security, as the centralized grid system is a potential target for terrorist attack. The freedom to expand rooftop solar is something we should be welcoming, and let’s hope the utility companies figure out a way to make it work for them, too.
Triple Spaced Again, © New Mexico News Services 2016