Farmington City Council raises electric rates

Aztec City Commission approves temporary moratorium on customer generation agreements, such as solar grid-tie agreements

Hannah Grover

FARMINGTON — The Farmington City Council unanimously approved a new rate structure for the Farmington Electric Utility System today despite concerns expressed by various customers about a standby service rider for people with solar panels.

Farmington Electric Utility Director Hank Adair, left, and Farmington resident Brandt Thrower talk to utility consultants through a telephone during Tuesday's City Council meeting in Farmington.

The standby service rider is a flat fee the customers will pay based on the amount of power their system is capable of generating. It has been controversial because many solar proponents say the rider decreases incentives for customers to install solar panels.

Each new solar customer will pay $7 a month for each kilowatt that their system is designed to produce. If the customer produces all the energy that it needs, the customer will be credited based on how much the customer would pay the city for power. The city will credit customers at the rate it pays to purchase power for any excess energy that the customer produces.

Solar power was also a concern at the Aztec City Commission meeting. The commission unanimously approvedmoratorium on customer generation agreements while waiting for the city's rate study to be completed later this year. While the commission approved a moratorium, it will allow the Aztec Municipal School District to continue with the solar developments that it already has planned. The school district requested that its project be exempted from the moratorium prior to the meeting.

A crowd gathered inside Farmington's City Council Chambers to offer input on and criticism of the rate changes. The new rates will affect residents throughout San Juan County. Most of the county currently receives power from the Farmington Electric Utility Service. Other nearby utilities such as the Aztec electric utility pay to have electricity transported to them through the Farmington system on a wholesale basis. Farmington's new rates include a 16 percent increase for customers like the city of Aztec, which could impact how much Aztec customers pay for electricity.

Richard Chacon, left, and Farmington Electric Utility System Director Hank Adair discuss solar energy during Tuesday's City Council meeting in Farmington.

Richard Chacon, a solar developer in Farmington, said many of his customers are senior citizens who want solar power to supplement their traditional power systems.

"They want the security of knowing that they're not going to be subjected to increased rates," he said.

There are currently about 100 residential customers with solar power on Farmington's system. Those 100 customers will be grandfathered in, meaning they will continue receiving credit at their current rate for any excess power they generate that goes back into Farmington's system. They also will be exempted from a $10 minimum bill that will affect the other residential customers.

In addition to adding standby service riders, the new rate structure also includes a 7.7 percent increase for all residential bills. That increase will be phased in over three years. According to a cost-of-service study, residential customers are paying 24 percent less in electric bills then it costs to provide them with the power, and the rate hike is intended to help make up that difference.

"It's interesting that nobody's complaining about the rate increase," said Chris Hunter, a member of the city's Public Utility Commission.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652.