Dive Brief:

• A group of industrial energy users that includes the University of New Mexico and Intel Corp. want state regulators to reconsider a Public Service Co. of New Mexico (PNM) rate decision they say will unfairly hit them with $1.5 million in charges for fuel savings, the Albuquerque Journal reports. 
• While New Mexico state law caps the contribution industrial users must make in utility renewables investments, a hearing examiner determined that leaves the large users reaping the benefits of lower fuel charges while not paying their fair share in support of PNM's renewables investments. 
• In the case of the University, as well as a the Albuquerque Bernalillo County Water Utility Authority, those costs would likely be passed back to students or customers, rather than being absorbed by shareholders.

Dive Insight:

While PNM's investments in renewable energy are supported by customer charges, state law caps those investments for large industrial users at $99,000 annually. The New Mexico Renewable Energy Act is designed to protect business from spiraling costs, but according to a hearing examiner, companies have enjoyed a disproportional share of lower fuel charges while using legal protections that limit or eliminate the amount they pay to support PNM's renewable investments.

"It’s a windfall for both the large-cap customers and the exempt customers,” Carolyn Glick, the New Mexico Public Regulation Commission hearing examiner who made the recommendation, told the Journal. Her recommendation was later approved 5-0 by the commission.

The decision could also add $500,000 in annual costs to the bottom lines of Albuquerque Bernalillo County Water Utility Authority and the University of New Mexico, despite their own investments in renewable energy. The industrial users are being represented by New Mexico Industrial Energy Consumers (NMIEC).

“The water utility will have to up its charges to customers and UNM could either impose additional charges on students or absorb the costs in their limited budget, which simply means doing less of something else on campus,” NMIEC attorney Peter Gould told the newspaper. “Neither of those entities has shareholders who they can lay those costs off on.”

Environmental groups have voiced support to charge the majority of industrial consumers for the fuel savings, but don't support that move for the water authority and UNM, the news outlet reports.