SENATE BILL 80
54th legislature - STATE OF NEW MEXICO - second session, 2020
William P. Soules and Antoinette Sedillo Lopez
RELATING TO UTILITIES; ENACTING THE COMMUNITY SOLAR ACT; PROVIDING FOR THE ESTABLISHMENT AND INTERCONNECTION OF COMMUNITY SOLAR FACILITIES; PROVIDING RULEMAKING AUTHORITY TO THE PUBLIC REGULATION COMMISSION; CREATING THE COMMUNITY SOLAR ENERGY ASSISTANCE FUND; ESTABLISHING THAT RENEWABLE ENERGY CERTIFICATES FROM COMMUNITY SOLAR FACILITIES ARE OWNED BY THE PUBLIC UTILITY; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 11 of this act may be cited as the "Community Solar Act".
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Community Solar Act:
A. "commission" means the public regulation commission;
B. "community solar bill credit" means a credit to a subscriber on the qualifying utility's monthly billing cycle;
C. "community solar bill credit rate" means the dollar-per-kilowatt-hour rate determined by the commission that is used to calculate a subscriber's community solar bill credit;
D. "community solar facility" means a solar electric generation facility that is interconnected with the distribution system of a qualifying utility in the service territory of customers of the qualifying utility that subscribe for a portion of the capacity of the facility;
E. "community solar program" means the program created through the commission's adoption of rules 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 through a subscription process;
F. "energy storage" means technology that allows the capture of energy produced at one time for use at a later time;
G. "low-income customer" means a residential customer of a qualifying utility who is enrolled in one or more of the following types of public assistance:
(1) temporary assistance for needy families;
(2) general assistance;
(3) supplemental nutritional assistance program;
(4) supplemental security income;
(5) federal food distribution program on Indian reservations; or
(6) low income home energy assistance program;
H. "low-income service organization" means an organization that provides services, assistance or housing to low-income customers;
I. "qualifying utility" means an investor-owned electric public utility certified by the commission to provide retail electric service in New Mexico pursuant to the Public Utility Act or a cooperative organized under the Rural Electric Cooperative Act that has not been granted an exemption from the commission pursuant to Section 10 of the Community Solar Act;
J. "subscriber" means a retail customer of a qualifying utility that contracts with a subscriber organization for one or more subscriptions to the capacity of a community solar facility;
K. "subscriber organization" means an entity, including a municipality, county, Indian nation, tribe or pueblo, a for-profit or nonprofit entity or organization authorized to transact business in New Mexico or within the jurisdiction of an Indian nation, tribe or pueblo located in New Mexico or a partnership of entities, that owns or operates a community solar facility; and
L. "subscription" means a written contract between a subscriber and a subscriber organization that allocates to the subscriber a proportional interest in the nameplate capacity of a community solar facility.
SECTION 3. [NEW MATERIAL] COMMUNITY SOLAR FACILITY-- REQUIREMENTS.--
A. A community solar facility shall:
(1) have a nameplate rating of ten megawatts alternating current or less; and
(2) be located in the service territory of a qualifying utility and be interconnected to the electric distribution system of that qualifying utility.
B. Except for a community solar facility located on the land of an Indian nation, tribe or pueblo exclusively serving subscribers on that land:
(1) a community solar facility shall have at least ten subscribers;
(2) no single subscriber shall be allocated or acquire more than a sixty percent interest in the capacity of a community solar facility; and
(3) a community solar facility shall not be co-located with another community solar facility on a single parcel or contiguous parcels of land if the nameplate rating of ten megawatts is exceeded in the aggregate.
C. Energy storage may be co-located with a community solar facility.
SECTION 4. [NEW MATERIAL] OWNERSHIP OF COMMUNITY SOLAR FACILITIES--SUBSCRIBER ORGANIZATIONS.--
A. A community solar facility shall be owned or operated by a subscriber organization.
B. A subscriber organization may enter into construction agreements, leases, sale-and-leaseback transactions, operating agreements or other ownership and operating arrangements with third parties relative to community solar facilities.
SECTION 5. [NEW MATERIAL] SUBSCRIPTIONS.--A subscription shall:
A. be sized to:
(1) represent at least one kilowatt of the community solar facility's generating capacity; and
(2) supply no more than one hundred twenty
percent of the previous year's consumption of electricity by the subscriber at the physical retail location to which the subscription is attributed, with a deduction for the amount of any existing solar facilities located at the physical retail location;
B. identify one or more retail locations in the service territory of the qualifying utility to which the subscription is attributed; and
C. state the per kilowatt rate to be paid by the subscriber for the nameplate capacity of the community solar facility allocated to the subscriber.
SECTION 6. [NEW MATERIAL] NOT SUBJECT TO COMMISSION REGULATION.--
A. 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.
B. Rates paid for subscriptions shall not be subject to regulation by the commission.
SECTION 7. [NEW MATERIAL] ACQUISITION OF OUTPUT FROM COMMUNITY SOLAR FACILITIES--BILL CREDIT--UNSUBSCRIBED OUTPUT--COST RECOVERY--RENEWABLE ENERGY CERTIFICATES.--
A. A qualifying utility shall:
(1) acquire the entire output of a community solar facility interconnected to its distribution system;
(2) provide a community solar bill credit to a subscriber's monthly electric bill for the proportional output of a community solar facility attributable to that subscriber for the previous month. The value of the community solar bill credit for the subscriber shall be calculated by multiplying the subscriber's portion of the kilowatt-hour electricity production from the community solar facility by the applicable community solar bill credit rate for the subscriber. The utility shall apply community solar bill credits to subscriber bills within one billing cycle of that in which the energy was generated by the community solar facility. Any amount of a community solar bill credit that exceeds a subscriber's monthly electric bill shall be handled in accordance with the procedures for crediting a customer for excess output from an interconnected renewable energy distributed generation 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; and
(4) 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 and the amount of the community solar bill credits applied to each subscriber.
B. A subscriber organization shall:
(1) provide a qualifying utility with real-time production data to facilitate acceptance and integration of the electricity output of a community solar facility into the qualifying utility's distribution system and to facilitate the provision of community solar bill credits to subscribers; and
(2) 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 shall be updated monthly to reflect canceling subscribers and new subscribers.
C. A subscriber organization may accumulate community solar bill credits in the event that all of the electricity generated by a community solar facility is not allocated to subscribers in a given month. On an annual basis, the subscriber organization shall provide the qualifying utility allocation instructions for distributing excess community solar bill credits to subscribers.
D. A qualifying utility and subscriber organization may agree that the subscriber organization provide the per kilowatt subscription rate and contractual terms of each subscription for purposes of billing a subscriber for the subscription price; provided that in no case shall the provision of subscription rates and contractual terms be a prerequisite for either the qualifying utility or the subscriber organization for interconnection or other requirements of the Community Solar Act.
E. Renewable energy certificates associated with a community solar facility shall be the property of the qualifying utility to which the community solar facility is interconnected.
SECTION 8. [NEW MATERIAL] PUBLIC REGULATION COMMISSION-- RULEMAKING--REPORTS.--
A. The commission shall adopt rules to establish a community solar program by no later than January 1, 2021. The rules shall:
(1) require a qualifying utility to file the tariffs, agreements or forms necessary for implementation of the community solar program;
(2) reasonably allow for the creation and financing of community solar facilities;
(3) allow all customer classes to participate in the community solar program and ensure participation opportunities for all customer classes. A customer shall not be removed from its otherwise applicable customer class in order to subscribe to a community solar facility;
(4) allow a qualifying utility to establish an annual cap on new community solar installations of no less than five megawatts per year or five percent of the qualifying utility's peak demand in New Mexico per year, whichever is greater;
(5) reasonably allow for the transferability and portability of subscriptions, including allowing a subscriber to retain a subscription to a community solar facility if the subscriber moves within the same qualifying utility territory;
(6) establish uniform standards, fees and processes for the interconnection of community solar facilities that allow a qualifying utility to recover reasonable interconnection costs for each community solar facility;
(7) provide for consumer protection in accordance with existing laws;
(8) allow a qualifying utility to recover reasonable costs of administering the community solar program;
(9) ensure non-discriminatory and efficient requirements and procedures for interconnecting community solar facilities;
(10) include a community solar program implementation schedule; and
(11) establish a reasonable process, commencing no later than two years after the commission's adoption of rules pursuant to this section, for the commission to review, on at least a biennial basis, the status of the development of community solar facilities, including the status of participation by low-income customers and low-income service organizations in each qualifying utility's community solar program. Interested persons shall be provided with the opportunity to submit comments to the commission concerning the effectiveness of its rules to implement the Community Solar Act.
B. By no later than November 1, 2023, the commission shall provide a report to the appropriate interim legislative committee that addresses energy issues. The report shall address the status of the development of community solar facilities in accordance with the Community Solar Act, including the status of participation by low-income customers and low-income service organizations in each qualifying utility's community solar program, the effectiveness of the commission's rules to implement the Community Solar Act and any recommended changes.
C. Within one hundred eighty days of finalization of the commission's rules for the community solar program, a qualifying utility shall begin crediting the subscriber accounts of each community solar facility interconnected in its service territory.
SECTION 9. [NEW MATERIAL] UTILITY LOADS AND RESOURCES TABLES--INTEGRATED RESOURCE PLANS.--A qualifying utility shall:
A. include and address the effects of the development of community solar facilities pursuant to the Community Solar Act in its loads and resources tables, integrated resource planning processes and integrated resource plans; and
B. notify the commission and participants in the commission's public advisory process, in accordance with the commission's applicable integrated resource plan rules, of the development of community solar facilities pursuant to the Community Solar Act that would have the effect of changing the results of the utility's most recent integrated resource plan filed with the commission.
SECTION 10. [NEW MATERIAL] RURAL ELECTRIC DISTRIBUTION COOPERATIVES.--
A. A rural electric distribution cooperative may request of the commission an exemption from participation in the community solar program for a period of up to five years. The commission may grant an exemption if the rural electric distribution cooperative:
(1) demonstrates that it is limited in its ability to participate in the program because of the amount of contracted generation on its system and the limits imposed by those contracts; or
(2) provides other reasons for its inability to accommodate community solar facilities and the commission finds the reasons compelling.
B. A rural electric distribution cooperative that intends to opt out of participation in the community solar program shall apply for an exemption prior to April 1, 2021.
SECTION 11. [NEW MATERIAL] COMMUNITY SOLAR ENERGY ASSISTANCE FUND--CREATED--PURPOSE.--
A. The "community solar energy assistance fund" is created as a nonreverting fund in the state treasury. The fund consists of gifts, grants, donations and appropriations. The energy, minerals and natural resources department shall administer the fund, and money in the fund is appropriated to the energy, minerals and natural resources department to assist low-income customers in subscribing to the capacity of a community solar facility as provided in this section. Disbursements from the fund shall be made by warrant of the secretary of finance and administration pursuant to vouchers signed by the secretary of energy, minerals and natural resources or the secretary's authorized representative.
B. Money in the community solar energy assistance fund may be used to pay up to twenty-five percent of the subscription rate for a low-income customer to participate in a community solar facility as a subscriber.
C. The energy, minerals and natural resources department shall establish processes for:
(1) low-income customers and low-income service organizations to apply for funds from the community solar energy assistance fund; and
(2) dispersal of the community solar energy assistance fund. Priority shall be given to those applications that include matching gifts, grants or donations from organizations or local governments that seek to make solar energy accessible to low-income customers.
SECTION 12. Section 62-16-5 NMSA 1978 (being Laws 2004, Chapter 65, Section 5, as amended) is amended to read:
"62-16-5. RENEWABLE ENERGY CERTIFICATES--COMMISSION DUTIES.--
A. The commission shall establish:
(1) a system of renewable energy certificates that can be used by a public utility to establish compliance with the renewable portfolio standard and that may include certificates that are monitored, accounted for or transferred by or through a regional system or trading program for any region in which a public utility is located; and
(2) requirements and procedures concerning requirements for renewable energy certificates pursuant to Subsections B and C of this section.
B. Renewable energy certificates:
(1) are owned by the generator of the renewable energy unless:
(a) the renewable energy certificates are transferred to the purchaser of the electricity through specific agreement with the generator;
(b) the generator is a qualifying facility, as defined by the federal Public Utility Regulatory Policies Act of 1978, or a community solar facility in which case the renewable energy certificates are owned by the public utility purchaser of the renewable energy; or
(c) a contract for the purchase of renewable energy is in effect prior to July 1, 2019, in which case the renewable energy certificates are owned by the purchaser of the electricity for the term of such contract, unless otherwise agreed to in a contract approved by the commission;
(2) may be traded, sold or otherwise transferred by their owner, unless the certificates are from a rate-based public utility plant, in which case the entirety of the renewable energy certificates from that plant shall be retired by the utility on behalf of itself or its customers. Any contract to purchase renewable energy entered into by a public utility on or after July 1, 2019 shall include conveyance to the purchasing utility of all renewable energy certificates, and the entirety of those certificates shall be retired by that utility on behalf of itself or its customers or subsequently transferred to a retail customer for retirement under a voluntary program for purchasing renewable energy approved by the commission. A utility shall not claim that it is providing renewable energy from generation resources for which it has traded, sold or transferred the associated renewable energy certificates. The commission shall not disallow the recovery of the cost associated with any expired renewable energy certificate. The public utility shall annually file a report with the commission discussing:
(a) its use, sale, trading or transfer of renewable energy certificates; and
(b) whether and how its public claims of renewable energy generation account for renewable energy certificates that it has traded, sold or transferred;
(3) that are used for the purpose of meeting the renewable portfolio standard shall be registered with a renewable energy generation information system that is designed to create and track ownership of renewable energy certificates and that, through the use of independently audited generation data, verifies the generation and delivery of electricity associated with each renewable energy certificate and protects against multiple counting of the same renewable energy certificate; and
(4) may be carried forward for up to four years from the date of issuance to establish compliance with the renewable portfolio standard, after which they shall be deemed retired by the public utility.
C. A public utility shall be responsible for demonstrating that a renewable energy certificate used for compliance with the renewable portfolio standard is derived from eligible renewable energy resources."
SECTION 13. Section 62-17-10 NMSA 1978 (being Laws 2005, Chapter 341, Section 10) is amended to read:
"62-17-10. INTEGRATED RESOURCE PLANNING.--Pursuant to the commission's rulemaking authority, public utilities supplying electric or natural gas service to customers shall periodically file an integrated resource plan with the commission. Utility integrated resource plans shall evaluate renewable energy, energy efficiency, load management, distributed generation, community solar facilities and conventional supply-side resources on a consistent and comparable basis and take into consideration risk and uncertainty of fuel supply, price volatility and costs of anticipated environmental regulations in order to identify the most cost-effective portfolio of resources to supply the energy needs of customers. The preparation of resource plans shall incorporate a public advisory process. Nothing in this section shall prohibit public utilities from implementing cost-effective energy efficiency and load management programs and the commission from approving public utility expenditures on energy efficiency programs and load management programs prior to the commission establishing rules and guidelines for integrated resource planning. The commission may exempt public utilities with fewer than five thousand customers and distribution-only public utilities from the requirements of this section. The commission shall take into account a public utility's resource planning requirements in other states and shall authorize utilities that operate in multiple states to implement plans that coordinate the applicable state resource planning requirements. The requirements of this section shall take effect one year following the commission's adoption of rules implementing the provisions of this section."
SECTION 14. APPROPRIATION.--Ten million dollars ($10,000,000) is appropriated from the general fund to the community solar energy assistance fund for expenditure in fiscal year 2021 and subsequent fiscal years to carry out the purposes of the fund. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.
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