FAQ

What is the City's PNM Solar Project?

The resolution can be found HERE

Initial amendment by Councilor Maestas can be found HERE

A:

The Resolution directs the City staff to work with Public Service Company of New Mexico (PNM) to develop a PNM-owned solar project to offset electricity consumption on city facilities in pursuit of its carbon neutrality goals.

Why does New Energy Economy Oppose the City's PNM Solar Project

A:

The resolution is problematic for many reasons, including that today this contractual arrangement is in fact illegal, and also that the project unfairly discriminates against local solar businesses, is anti-competitive, and is contrary to the stated goals of:

1) reducing electricity costs

2) making community solar legal and

3) providing transparency and accountability in City procurement.  

Why is the proposal illegal?

A:

On page 2, lines 13-14, the Resolution states: “PNM is providing solar power to large entities such as Facebook and potentially other municipalities in New Mexico.” The contractual arrangement proposed by PNM to create a 3.5 megawatt system off site to offset the usage of 22 city facilities and give the City credit for the power produced is akin to “community solar.”[1]

Today community solar is illegal in New Mexico, primarily because PNM has vigorously opposed legislation to create such a financial arrangement despite that it has been adopted in many states.  

The financial arrangement between the City and PNM does not meet the legal requirement of a “Special Service Contract” between PNM and Facebook and the “Green Energy Rider” approved by the PRC in August 2016.  PRC's approval of that Green Energy Rider, only applies to large NEW customers with specified power demands, and not any of PNM's existing customers.



[1]community solar project—sometimes referred to as a solar garden or shared renewable energy plant—is a solar power plant whose electricity is shared by more than one household. The shared renewables project pools investments from multiple members of a community and provides power and/or financial benefits in return.

What About Cost?

A:

We believe, and the evidence is available that shows, that PNM-owned solar is NOT the most cost effective resource among feasible alternatives and will result in unreasonably high solar procurement costs to the City of Santa Fe. Why? PNM enjoys a guaranteed return on assets of 9.575% annually. So, PNM will charge the City the cost of electricity plus a nearly 10% return. Can independent local power producers install solar on City owned facilities for less than PNM-owned solar + 10%? Most Probably. In fact, recent actual PNM evidence shows that independent power producers’ prices have come in dollars per megawatt cheaper than PNM-owned solar. If the City owns the solar at some point the solar-produced electricity is free!

The title of this Resolution and content of this Resolution prefers a PNM development study to the exclusion of City of Santa Fe-owned OR other local companies without any analysis that:

  1. Known PNM costs on said 22 facilities are less/more than PNM’s proposed costs for the 3.5 PNM-owned development;
  2. Known PNM costs on said 22 facilities are less/more than City of Santa Fe owned solar;
  3. PNM’s proposed costs on said 22 facilities are less/more than any other financial arrangements, including development by other local companies.

PNM’s fiduciary duty must maximize its financial arrangements to create the highest return on equity for Wall Street shareholders and long-term monopoly control of resources at the expense of customers, if the Council adopts this Resolution, the City of Santa Fe. 

What is the danger in pursuing this project if we can get a great deal?

A:

First of all, we can't determine if we are getting a great deal unless we can compare PNM's offer against alternatives.

If the City of Santa Fe approves this Resolution and approves the contractual arrangement with PNM it will pay a premium for solar. But what about low cost solar for Santa Fe residents? Affordable solar will be sacrificed. It is very concerning to us that this process piece is being overlooked. Yes we NEED more renewables - and - PROCESS and OWNERSHIP matter. If we just substitute corporate-benefitting coal and nuclear for corporate benefitting solar, we've failed to learn - the process must be JUST and EQUITABLE, we need to access ownership in order to maximize public benefit and consider long-term cost savings and community control. 

 

What SHOULD the City do?

A:

The appropriate process is for the City to issue a request for proposals (RFP) -- a competitive bidding process - to meet the needs of municipal building solarization. This is in fact the policy and practice that the City employs in procurement contracts; to assess and determine the most cost effective, highly qualified bids, that saves the City of Santa Fe residents money over the long-term.

Issuing a Request for Proposal (“RFP”) is the standard procurement process for the City of Santa Fe but this Resolution bypasses this competitive and transparent process. Why has the City consistently deployed the RFP process?

◦       It protects the public from unnecessary cost and waste; and

◦       It protects the market from favoritism and unfair dealing; and

◦       It produces the greatest transparency; and

◦       It equips decision-makers and the public with the information they need to make a sound assessment of the best path forward.

We would welcome the City’s support for a bill in the legislature to make community solar legal for all and encourage PNM to endorse this legislation. It has proven to be financially and environmentally beneficial for local residents in many other states.[1]



[1] Developing community solar projects are economically viable: https://ilsr.org/minnesotas-community-solar-program/

https://ilsr.org/minnesota-has-the-best-community-solar-program-heres-why/