New Mexico Expands Net Metering to 80 MW

The New Mexico Public Regulation Commission (NMPRC) unanimously approved a large expansion to the state’s net metering policy late last week. The new rule will allow electric utility customers to net-meter electricity generated from renewable energy systems with a peak capacity of up to 80 megawatts (MW). Previously, net metering in the state was limited to systems smaller than 10 kW.

This new rule opens the door for commercial size net-metered systems in New Mexico according to Ben Luce, the director of the New Mexico Coalition for Clean Affordable Energy. “There is also no cap on the total amount of net-metered capacity, short of what might endanger the safety or reliability of the grid. This is in contrast to virtually every net-metering rule in other states, which tend to cap either or both the system size or aggregate amount,” stated Luce in a recent e-mail. The new rule is essentially a modification of NMPRC Rule 570, which governs the interconnection of qualifying facilities (QFs) under the federal PURPA law. PURPA stands for Public Utilities Regulatory Policy Act of 1978 and is a Jimmy Carter era law that allows QFs — defined as renewable energy or co-generation systems under 80 megawatts — to interconnect with their local utility and sell their power back into the grid at “avoided cost”, which is roughly equal to the wholesale rate for electric power generation. At the end of a specified period, which varies from state to state, the “accounts” of net-metered systems are reconciled or “trued up”, such that the excess credits of the net-metering customer are zeroed out, and the customer receives a payment at the avoided cost rate for any net excess credits they happen to have at the time. Under the new rule, systems greater than 10 kW in New Mexico will be reconciled at the end of each billing cycle. The PRC’s existing rule for net-metering of systems under 10 kW allows systems to reconcile their accounts on an annual or system-life-time basis, that is, any excess credits at the end of a billing cycle are carried for month-to-month until the true up time kicks in. “This perhaps is the weakest aspect of the new rule from the standpoint of subsidizing renewable energy systems and there was much discussion of this by the Commission and parties involved with the new ruling,” stated Luce. “Personally, I feel that this compromise is far outweighed, at least for the time being, by the fact that we now have a rule with no caps on either systems size or total aggregate — notwithstanding safety limitations.” The biggest impact of this will likely be to decrease the size of commercial systems somewhat, said Luce, adding that people will be inclined to size their system closer to their monthly minimum usage as opposed to their average usage. The PRC has indicated clearly, however, that it will reconsider this aspect if it turns out that the impact is greater than currently anticipated. While the new modification technically allows electric customers to net-meter renewable energy systems up to 80 MW, in actuality the size of the system allowed to interconnect will be governed through the interconnection process. The PRC is currently undergoing a process to address interconnection next.
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