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Facts

The case involves the New Mexico Public Regulation Commission's (NMPRC) adoption of rules under the Community Solar Act, which provides for the development of community solar facilities. These facilities generate solar electricity within a utility's service area and are interconnected to the utility's distribution system. The rules set a bill-credit rate for subscribers, which utilities challenged, arguing it unlawfully included transmission costs, among other issues (paras 1, 3-4).

Procedural History

  • NMPRC, March 30, 2022: Issued Order Adopting the Rule, establishing the Community Solar Rule.
  • NMPRC, May 18, 2022: Issued Order on Rehearing, partially granting and denying motions for rehearing and clarification of the Order Adopting the Rule (paras 7-8).

Parties' Submissions

  • Appellant (Southwestern Public Service Company and Intervenors): Argued that the Community Solar Rule unlawfully included transmission costs in the bill-credit rate, allowed cost-sharing of interconnection costs, and violated statutory prohibitions against co-location of facilities, among other issues (paras 1, 13, 26, 31).
  • Appellee (New Mexico Public Regulation Commission): Argued that the Rule was a reasonable exercise of its policy-making authority, consistent with the Community Solar Act, and that the prohibition against subtracting transmission costs was intentional and lawful (paras 19, 28, 33).

Legal Issues

  • Whether the Community Solar Rule's prohibition against subtracting transmission costs from the bill-credit rate is contrary to the Community Solar Act.
  • Whether the Rule's provisions allowing cost-sharing of interconnection costs and co-location of facilities are unlawful.
  • Whether the Commission's reliance on recommendations from its Community Solar Action Team violated due process or statutory prohibitions against ex parte communications.
  • Whether the Commission violated statute or due process by rejecting SPS's proposed bill-credit rate without a hearing.

Disposition

  • The Supreme Court of New Mexico affirmed the NMPRC's adoption of the Community Solar Rule and its orders challenged in the appeal (para 11).

Reasons

Per Zamora, Justice (Thomson, Vigil, Bacon, and Vargas JJ. concurring):

The Court held that the NMPRC's interpretation of the Community Solar Act to prohibit subtracting transmission costs from the bill-credit rate was reasonable and within its policy-making authority. The Act's language was ambiguous, and the Commission's interpretation was consistent with legislative intent and the nature of community solar projects, which do not incur transmission costs (paras 19-24). The Court also found that the Rule's provisions on cost-sharing and co-location were reasonable exercises of the Commission's authority, balancing various interests and ensuring no unlawful subsidization occurred (paras 28-30, 33-34). The Court rejected the argument that the Commission's reliance on the Team's recommendations violated due process or statutory prohibitions, noting the transparency of the process and the lack of evidence of improper ex parte communications (paras 48-61). Finally, the Court held that the Commission did not violate statute or due process by rejecting SPS's proposed bill-credit rate without a hearing, as the rate was submitted in open defiance of prescribed requirements (paras 68-71).

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