Opinion: Imposing solar tax isn't worth losing a lawsuit
The front page of the Daily Times on Aug. 23, 2019 featured a story about the City of Bloomfield owing nearly $500,000 to the ACLU because of a lawsuit that was settled in 2017. On page A2 of that same day’s paper was an article about the lawsuit the City of Farmington faces over the “Standby Service Rider” (SSR) as it applies to electric customers who have solar at their homes.
I hope reading those articles consecutively gave Farmington’s leaders perspective about the choice they face in the coming weeks.
Farmington’s Standby Service Rider is a solar tax, and its purpose is to recover the revenue that Farmington loses when customers switch to solar energy. The SSR stipulates that residents in Farmington Electric’s service area must pay a fee of $7.28 per kilowatt of installed solar per month for the right to generate their own electricity. For an average solar customer, this adds about $35 to their monthly electric bill.
The city argues that the solar tax is justified because solar is an intermittent resource, and the City’s electric utility must be prepared to supply power to all of its customers, regardless of weather or time of day. But does that argument hold water?
Grid demand is inherently intermittent, with customers turning electrical devices on and off all the time. The ~100 residential solar systems in Farmington’s service territory add up to about 500 Kilowatts of capacity on a 200 Megawatt grid. Residential solar accounts for a miniscule 0.0025% of the Farmington Electric grid, so the potential unpredictability of solar production has no significant impact on the demand of the grid.
It is true that there are costs associated with accommodating for the grid’s intermittent demand, and every customer, solar or non-solar, pays for those costs through the base charges and per-kWh charges on our utility bills. There is no data-backed justification for an additional charge for solar. If there were, every utility would have one, because every utility has had to deal with the increase in residential solar generation.
There are over 30 different local electric utilities in New Mexico, but there are only two who charge solar customers extra: Farmington’s and Aztec’s. That was not always the case. Southwestern Public Service Company (SPS), covering Southeastern New Mexico, once had a solar tax similar to the one Farmington has, but they were forced to get rid of it due to a lawsuit that was brought by EarthJustice, the same exact firm that is suing Farmington.
EarthJustice is a non-profit organization of high-powered and well-financed lawyers who have a track record of success. They have litigated cases very similar to the one they have brought against Farmington, and have already defeated solar taxes in Nevada, Colorado, Michigan, Massachusetts, Texas, and Wisconsin.
The lawsuit against Farmington stipulates that if Farmington loses, it could be forced to pay the legal fees of the prosecution. Sound familiar?
In 2017, Bloomfield chose to litigate a difficult case against a powerful team of legal experts. They are now half a million dollars in debt. Poor decision-making has consequences: three of the Bloomfield city councilors who were in office during that process lost their jobs in the subsequent election.
Farmington’s city council faces an expensive and unnecessary choice. They can choose to spend our tax dollars to defend an ill-advised policy, which will expose us to the risk of being hundreds of thousands of dollars in debt to a national environmental organization. The other option is cheaper and smarter. Just ditch the solar tax and we can all move on.
Eli Pavlik is a Farmington resident.