2021 FEB. 6 ISSUE: ‘COMMUNITY SOLAR ELECTRIC’ BILL ADVANCES

If you don’t have your own photovoltaic panels to generate electricity for your home or business, might you be interested in subscribing to use the output from a community solar facility? A bill under consideration in the 2021 session of the N.M. Legislature calls for rules to govern how a community solar facility should operate. Senate Bill 84 was introduced by Liz Stefanics and Linda Lopez.

The bill directs the N.M. Public Regulation Commission to adopt rules to implement such a program around the state, with special consideration for Native American communities. The bill defines a community solar program as one which is “created through the adoption of rules by the commission that allows for the development of community solar facilities and provides customers of a qualifying utility with the option of accessing solar energy produced by a community solar facility in accordance with the Community Solar Act.”

It would operate based on a community solar bill credit that is the credit value of the electricity generated by a community solar facility and allocated to a subscriber to offset the subscriber’s electricity bill on the qualifying utility’s monthly billing cycle. SB84 defines a “low-income customer” for such a program as “a residential customer of a qualifying utility with an annual household income at or below eighty percent of county area median income, as published by the United States department of housing and urban development, or that is enrolled in a low-income program facilitated by the state or a low-income energy program led by the qualifying utility or as determined by the commission; And a “low-income service organization” would be an organization that provides services, assistance or housing to low-income customers and may include a local or central tribal government, a chapter house or a tribally designated housing entity; A “subscriber” means a retail customer of a qualifying utility that owns a subscription to a community solar facility from a subscriber organization; A “subscriber organization would be an entity that owns or operates a community solar facility and may include a municipality, a county, a for-profit or nonprofit entity or organization, an Indian nation, tribe, or pueblo, a local tribal governance structure or other tribal entity authorized to transact business in New Mexico; Selected text of the bill reads as follows.

Section 3. Community Solar Facility Requirements.
A. A community solar facility shall:
(1) have a nameplate rating of five megawatts alternating current or less;
(2) be located in the service territory of the qualifying utility and be interconnected to the electric distribution system of that qualifying utility;
(3) have at least ten subscribers;
(4) have the option to be co-located with other energy resources;
(5) not allow a single subscriber to be allocated more than forty percent of the generating capacity of the facility; and
(6) make at least forty percent of the total generating capacity of a community solar facility available in subscriptions of twenty-five kilowatts or less.

B. The provisions of this section shall not apply to a native community solar project; provided that a native community solar project shall be located in the service territory of a qualifying utility and be interconnected to the electric distribution system of that qualifying utility.

Section 4. Ownership of Community Solar Facilities.
A. A community solar facility shall be owned or operated by a subscriber organization.
B. Third-party entities or subscriber organizations developing projects on the land of an Indian nation, tribe, or pueblo are subject to tribal jurisdiction.
Section 5. Subscription Requirements. A. A subscription shall be:
(1) sized to supply no more than one hundred twenty percent of the subscriber’s average annual electricity consumption; and
(2) transferable and portable within the qualifying utility service territory.

B. The provisions of this section shall not apply to a native community solar project; provided that subscriptions to a native community solar project shall be transferable and portable within the qualifying utility Community Solar Program Administration.
A. A qualifying utility shall:
(1) acquire the entire output of a community solar facility connected to its distribution system;
(2) apply community solar bill credits to subscriber bills within one billing cycle following the cycle during which the energy was generated by the community solar facility;
(3) provide community solar bill credits to a community solar facility’s subscribers for not less than twenty-five years from the date the community solar facility is first interconnected;
(4) carry over any amount of a community solar bill credit that exceeds the subscriber’s monthly bill and apply it to the subscriber’s next monthly bill; and
(5) on a monthly basis and in a standardized electronic format, provide to the subscriber organization a report indicating the total value of community solar bill credits generated by the community solar facility in the prior month as well as the amount of the community solar bill credits applied to each subscriber.

B. A subscriber organization shall, on a monthly basis and in a standardized electronic format, provide to the qualifying utility a list indicating the kilowatt-hours of generation attributable to each subscriber. Subscriber lists may be updated monthly to reflect canceling subscribers and to add new subscribers.

C. If a community solar facility is not fully subscribed in a given month, the unsubscribed energy may be rolled forward on the community solar facility account for up to one year from its month of generation and allocated by the subscriber organization to subscribers at any time during that period. At the end of that period, any undistributed bill credit shall be removed, and the unsubscribed energy shall be purchased by the qualifying utility at its applicable avoided cost of energy rate as approved by the commission.

D. The environmental attributes, including renewable energy certificates, associated with a community solar facility may be sold or transferred by the owner of the community solar facility to the qualifying utility.

E. Nothing in the Community Solar Act shall preclude an Indian nation, tribe or pueblo from using financial mechanisms other than subscription models, including virtual and aggregate net-metering, for native community solar projects.

Section 7. Public Regulation Commission Rule making.

A. The commission shall adopt rules to establish a community solar program by no later than November 1, 2021. The rules shall:
(1) provide an initial annual statewide capacity program cap of one hundred megawatts proportionally allocated to investor-owned utilities until November 1, 2024. The annual statewide capacity program cap shall exclude native community solar projects and rural electric distribution cooperatives;
(2) establish an annual statewide capacity program cap to be in effect after November 1, 2024;
(3) require a target thirty percent annual statewide carve-out of the annual statewide capacity program cap to be reserved for low-income customers and low-income service organizations. In facilitation of this target, the commission shall issue guidelines to ensure the carve-out is achieved each year and develop a list of low-income service organizations and programs that may pre-qualify low-income customers;
(4) establish a process for the selection of community solar facility projects and allocation of the statewide capacity program cap;
(5) require a qualifying utility to file the tariffs, agreement or forms necessary for implementation of the community solar program;
(6) establish reasonable, uniform, efficient and non-discriminatory standards, fees and processes for the interconnection of community solar facilities that are consistent with the commission’s existing interconnection rules and interconnection manual that allows a qualifying utility to recover reasonable costs for administering the community solar program and interconnection costs for each community solar facility;
(7) provide consumer protections for subscribers, including a uniform disclosure form that identifies the information that shall be provided by a subscriber organization to a potential subscriber, in both English and Spanish, and when appropriate, native or indigenous languages, to ensure fair disclosure of future costs and benefits of subscriptions, key contract terms and other relevant but reasonable information pertaining to the subscription;
(8) provide a community solar bill credit rate mechanism for subscribers derived from the qualifying utility’s total aggregate retail rate on a per-customer-class basis, less the commission-approved distribution cost components, and identify all proposed rules, fees and charges;
(9) reasonably allow for the creation, financing and accessibility of community solar facilities; and
(10) provide requirements for the siting and co-location of community solar facilities.

B. The commission shall solicit input from relevant state agencies, public utilities, low-income stakeholders, disproportionately impacted communities, potential owners or operators of community solar facilities, Indian nations, tribes and pueblos and other interested parties in its rule making process.

C. By no later than November 1, 2024, the commission shall provide to the appropriate interim legislative committee a report on the status of the community solar program, including the development of community solar facilities, the participation of investor-owned utilities and rural electric distribution cooperatives, low-income participation, the adequacy of facility size, proposals for alternative rate structures and bill credit mechanisms, cross-subsidization issues, community solar facilities’ effect on utility compliance with the renewable portfolio standard and an evaluation of the effectiveness of the commission’s rules to implement the Community Solar Act and any recommended changes.
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Section 9. Exclusion from Commission Regulation.. Subscriber organizations, or the subscribers to a community solar facility, shall not be considered public utilities subject to regulation by the commission under the Public Utility Act solely as a result of their ownership, interest in, operation of or subscription to a community solar facility. Rates paid for subscriptions shall not be subject to regulation by the commission.