Bill Clarifies 3rd-Party Generation Law

Mar 12, 2010 — Albuquerque Journal

Mar. 12, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- Gov. Bill Richardson has signed a bill that expands the Public Utility Act to clarify the law on third-party renewable energy generation, backing up a ruling issued by the Public Regulation Commission and clearing the way for PNM to drop its appeal.

The PRC in December held that third-party developers that install renewable energy distributed generation systems -- such as solar arrays -- on a customer's property and sell the power to the customer are not public utilities subject to state regulation.

That new law adds a section to the Utility Act that declares owners and operators of such systems are not public utilities, and also provides for public utilities to recover costs related to the impacts on their services.

The legislation was broadly supported by utility companies -- including PNM, which argued the Utility Act did not allow such arrangements -- electric co-ops and environmental and renewable energy groups.

With the bill's signing, PNM will withdraw its appeal of the PRC ruling, PNM spokesman Don Brown said. "We're glad it passed," he said. "It resolves an issue that was fairly contentious."

El Paso Electric (NYSE:EE) is also expected to withdraw its appeal.

"It has always been our intention to attempt to resolve the issues with consensus legislation, and if all the appeals are withdrawn, El Paso Electric intends to withdraw its appeal as well," spokeswoman Teresa Souza said in an e-mail.

Advocates say such thirdparty arrangements offer an affordable financing alternative for local governments and nonprofits that aren't eligible for tax credits to offset the cost of installing renewable energy systems. The developer would get a return on its investment through state and federal incentives.

Newstex ID: KRTB-0010-42838577