New Mexico PRC upholds decision on third-party sales

NEW MEXICO –On December 22, 2009, New Mexico Public Regulation Commission regulators issued an order, under docket 09-00217-UT (accessible on PRC’s Infoshare site; note that users are required to register for a password) that allows customers to take advantage of third-party power purchase agreements with renewable energy developers. The PRC voted 4-1 to largely uphold an earlier ruling by a hearing examiner, who found that developers are not considered public utilities if they install, own and operate renewable energy generation equipment on a customer’s property and sell the power to the customer. New Mexico public utilities opposed the change and argued that the decision could expose customers to extra risk and expense.

Renewable energy advocates argued that the third-party PPA model enabled entities without tax liabilities —such as municipal governments, schools, and other nonprofits —to partner with third parties to take advantage of state and federal tax credits. The PRC determined that regulating third-party arrangements as public utilities would unduly burden small-scale entities and discourage renewable energy development in the state. The Commission held that third-party PPAs are legal and service to a single customer does not create a state-regulated public utility.

The Public Service Company of New Mexico, the largest utility in the state, has indicated that it may appeal the decision. Source: New Mexico Independent article on third-party sales.


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