NM rate case issues and overview part 3
This is part 3 of REIA-NM’s ongoing NM Rate Case series.
Currently, it seems a solution for the utility will be a fixed cost “fee.” However, customers will have less incentive to use less energy, or invest in alternative energy. Fixed fees only ensures the utilities can recoup their expenses and profit. It will not recoup the “costs” of rooftop solar or energy efficiency to the utility, it will just eliminate a projected long term problem that more and more solar customers present for utilities. In what’s referred to as load defection, solar customers use less energy and pay lower power bills–so the financial forecasts for utilities looks grim. In Arizona, for example, where utilities had an access fee imposed on solar customers and approved by their regulatory body, solar installations decreased by 96%. It devastated the industry, companies went out of business, workers lost their jobs, and the largest national solar company left the state. Maintaining the status quo utility business model is bad for solar, utilities, and rate payers.
The Renewable Energy Industry contributes more jobs to the economy than any other sector. Solar enjoys economies of scale and prices continue to fall. Technological advancements in battery technology will soon make financial sense in our sunny state with 5.5 hours of sunlight per day. Paired with solar energy, these systems can be disconnected from the power grid. If the utilities punish solar customers instead of working with the solar community, something known as as “grid defection” could occur. This worst case scenario means customers generate their own power and can cancel their electric utility service. This will be bad for rate payers, because it will create instability in the grid, make electricity more expensive for grid-tied customers, and ultimately put electric utility companies out of business.