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Aztec mayor proposes changes to base rates charged to customers who have solar panels

Hannah Grover
Farmington Daily Times
The sun shines
between solar
panels on March 12
at the Aztec solar
farm.

AZTEC — Aztec Mayor Victor Snover has proposed lowering the base rate that electric utility residential customers who have solar panels pay to bring it in line with what customers without solar panels pay.

The City Commission discussed these rates during a work session on Aug. 11 that can be viewed on YouTube.

Currently, residential customers who have solar panels to meet some of their electrical needs pay a base rate more than $12 higher than customers who do not have solar panels.

Non-solar customers pay a base rate of $25.75, which includes the first 100 kilowatt hours of usage. Customers also pay the 5.5 cents per kilowatt hour power cost adjustment. Then the non-solar customers pay nearly 4 cents per kilowatt hour used after the first 100 kilowatt hours.

Meanwhile, a solar customer pays a base rate of $38 and then pays the power cost adjustment but does not pay the nearly 4 cents per kilowatt hour usage charges that non-solar customers pay.

Aztec Mayor Victor Snover addresses the audience, Monday, Sept. 9, 2019, during an NMED ozone attainment initiative meeting in Farmington.

The rates will be increasing in July 2021. At that point, solar customers will pay a $42 base rate as well as the 5.5 cents power cost adjustment. Meanwhile, non-solar customers will pay a $30 base rate as well as the power cost adjustment and 3 cents for every kilowatt hour used after 100 kilowatt hours.

The rate structure means a customer who uses very little electricity could pay more with solar panels than that customer pays without solar panels. Meanwhile, a customer who uses a lot of electricity would pay less if they install solar panels.

While some other utilities pay customers for the excess electricity generated, Aztec does not. Farmington Electric Utility System pays avoided costs to those customers, meaning the customers are paid for the electricity at the same rate that it would cost the city to purchase that power from the marketplace. If Aztec was to implement that policy, the solar customers whose arrays sometimes overproduce in the summer would receive less than five cents per kilowatt hour.

Ken George, Aztec's electric director talks during an interview on Monday, March 12, 2018 at the Aztec solar farm.

The higher solar fee went into place in 2017 following a rate study.

“We felt at the time and even today that it’s a justifiable charge,” said Electric Director Ken George.

Utility Director Delain George said the higher base rate pays for the operation costs that are built into the usage rates for other customers.

“The solar customers still get all of the benefits of non-solar customers,” she said.

She said it also pays for the utility to manually enter the information onto the solar customers’ bills.

Aztec Mayor Victor Snover talks during a work session, Tuesday, July 24, 2018 at Aztec City Hall.

There are currently four customers in Aztec’s service area that have solar panels and are still connected to the grid. None of them have complained to the utility that the rates are unfair.

 However, Snover argued that Aztec should try to incentivize solar and doing so would not have a large impact on the budget.

“We’re talking about four folks,” he said. “Not 4,000 or 400 even.”

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.

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