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AZTEC — Solar proponents are questioning whether the fees Aztec Electric Utility charges customers who have solar panels are fair.

The Aztec City Commission heard from these proponents as well as members of the city staff about the solar fees during a work session on Oct. 22.

The solar proponents say unfair electric fees could discourage people from investing in solar.

“I believe that for every one-kilowatt hour of solar, that’s one less kilowatt hour of fossil fuels,” said David Fosdeck, an advocate for solar power who is also one of the plaintiffs alleging Farmington Electric Utility System’s standby service fee is unfair and discourages solar development.

More: Farmington faces lawsuit based on standby service riders for solar customers

He said the future of electric utilities is going to be very different, and he alleged that cost of service studies like the one Aztec had done before setting the solar rates have traditionally undervalued solar.

How much do solar customers pay compared to other residents?

Aztec has very few solar customers. City officials say there are three residential customers and two commercial customers, which is essentially the same number of solar customers the city had when it instituted the new rates a couple years ago.

More: Aztec City Commission approves school district, resident's solar contracts

An Aztec residential bill has two lines for electricity. The first line is called electric service. It includes a minimum fee of $21.25. This is for the first 100 kilowatt hours a customer uses. Additional usage is charged 4.7 cents per kilowatt hour up to 500 kilowatt hours. Customers pay an additional 4.4 cents per kilowatt hour for usage over 500 kilowatt hours.

The second line on a residential Aztec utility bill is called electric power cost adjustment. Residential customers pay 5.5 cents per kilowatt hour for the electric power cost adjustment.

An Aztec residential customer with solar panels would pay a $38 per month minimum fee as well as 5.5 cents per kilowatt hour for any electricity they use from the grid.

Aztec does not buy excess power generated by the customers unless a special agreement is in place. 

Who is subsidizing whom?

The idea behind the fee is to prevent customers without solar panels from having to pay more for system maintenance and operations as more and more customers install solar. It also allows the city to pay to have electricity on standby in case the solar panels fail or for when the sun is not shining. 

The $38 fee is based on the average customer's electricity usage. City Finance Director Kathy Lamb said the average customer uses 600 kilowatt hours of electricity monthly and pays $42 a month for power.

Fosdeck and Eli Pavlik, who works with Durango, Colorado-based nonprofit Solar Barn Raising, questioned the fairness of the fees and highlighted that Aztec is one of the few utilities in the state with a fee for solar customers. They acknowledged that it does cost the utility money to provide backup power to customers with solar panels, however they questioned if $38 a month could be excessive.

Electric utility director Ken George said Aztec and Farmington saw that other utilities are struggling to pay for system operations and maintenance due to increased numbers of solar customers who are not necessarily paying their share of the operations and maintenance costs. He said that led the two utilities to implement the new fees.

George emphasized that Aztec has traditionally been pro-solar, including implementing solar policies before many other utilities and installing its own solar farm. He said the city is in the process of increasing the amount of electricity it gets from solar.

Commissioner Sherri Sipe said people who want solar power and do not want to pay the $38 charge do have other options. She said they can choose to take their house or business off the grid using battery storage. At the same time, she said the rates need to be fair to both solar customers and customers who do not have solar panels.

“I don’t think that the people who have solar should expect the other customers to subsidize their solar,” she said.

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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