Community solar passed the senate yesterday, but not without utilities undermining the gains that community solar would have provided. Poison pill amendments added regulatory roadblocks that will strip away the market incentive from independent developers and consolidate utility control over solar, destroying the vision of independent solar gardens blooming across the state. The bill retains the “community” name but has effectively been stripped of all the community benefits.
For all their talk about competition, Republicans joined Democrats in approving floor amendments proposed by Democratic Senators Daniel Ivey-Soto and Katy Duhigg that introduced regulatory roadblocks and excluded municipalities, schools, religious organizations (churches, etc.) from participating, making the development of community solar arrays more expensive and less profitable for any small or mid-size solar developer.
WHAT'S WRONG WITH THE AMENDED BILL
POISON PILL #1: The utilities can own a “community solar” project. That defeats the whole purpose: A true community solar program, means that a subscriber owns shares in the system, gets the electric-generated offset, and gets the tax advantages. The term “community solar” has been around for more than a decade, and in 20 states it refers to projects with shared ownership in which participants receive direct financial benefits, including reduced utility bills. A utility owned solar array does not fit the definition of "community" solar.
POISON PILL #2: Requires community solar projects to be subject to PRC Regulation. If a community solar developer has to be subjected to the same conditions as a monopoly utility, they would have to have lawyers, regulatory experts, and provide minimum data requirements for each project; this would be prohibitive at such a small scale of production. There is not enough “profit” built into these projects to afford this regulatory overlay and expense. We are not aware of any other community solar legislation in the country that requires PRC oversight of small community solar projects.
POISON PILL #3: Limits subscribers only to a residential retail customer or “a small commercial retail customer,” that cannot consume more than 40% of the output of each solar facility. While we don’t know exactly who this excludes because the definition is excluded from the bill, these amendments practically prohibit nearly all state agencies, municipalities, supermarkets, schools, larger fire departments, counties, movie theaters, places of entertainment, churches, mosques, and synagogues, bowling alleys, and any large retail customer. Utilities successfully lobbied to ensure they don't lose any large customers to a community solar project.
POISON PILL #4: ALLEGED enforcement of no cross-subsidization. Cross-subsidization refers to potential cost sharing between subscribers and utility customers. In reality with an interconnected system like the energy grid, cross-subsidization is found throughout utility rates. There are huge swathes of customers who pay less than their full cost of service, thus being subsidized by other customers who pay more to make up the difference. We don't demand proof of no cross-subsidization for rooftop solar, and to make community solar providers give proof in advance that there will be no cross-subsidization will cause solar providers (and their lawyers) to be caught in a dragnet of utility obfuscation for years on every project.
For those who want to read a more in-depth analysis click here.
The investor owned utilities want to slow deployment and implementation of community solar and undermine the very purpose of the bill: local control and energy democracy. After so many years and input from so many experts, environmental activists, citizens, business groups, tribes, and legislators, the capacity of the utility executives to pervert the system once again for their own benefit underscores the necessity of a system free of monopoly utility influence. Another argument for Local Choice Energy in New Mexico.
Moving forward in the House, we hope to see the Ivey-Soto/Duhigg Amendments stripped from the bill entirely. Given the influence of powerful utilities clearly demonstrated on the floor of the Senate yesterday, it will be a significant challenge for House Democrats to find the votes to restore the "Community" in Community Solar.