Santa Fe and other municipalities will get the green light to purchase power from independent energy developers if the Public Regulation Commission agrees with the decision of a hearing officer.

Public Service Company of New Mexico questioned the legality of a proposed purchase agreement if the city of Santa Fe, a PNM customer, contracts with Maryland-based SunEdison to install and own solar photovoltaics and then buys the electricity. PNM thinks such systems should be regulated by the state as public utilities.

On Oct. 23, PRC hearing examiner Carolyn R. Glick found that third-party contracts are legal and the energy developers are not a public utility. Santa Fe and SunEdison have been working on a power purchasing agreement to install photovoltaics at eight city-owned buildings, with the city buying the produced electricity at a competitive rate.

In addition, Glick ruled it is legal for a public-utility customer such as a hospital to lease a backup generator or other "distributed generation" system from another company.

But Glick found it is illegal "retail wheeling" for an energy developer to serve multiple customers by moving the electricity from one place to another using a public utility's power lines. In other words, as long as the solar photovoltaic panels on a roof serve only the building underneath, everything is legal.

PNM plans to file a reply to the decision later this week.

"While we are still examining the recommended decision, and appreciate the hard work the hearing examiner put into her decision, we believe there are flaws in the legal analysis," said PNM spokesman Don Brown. "It's important to remember this is simply a recommended decision. We still will have an opportunity to present our own views to the commission itself before a final decision is made."

All New Mexico public utilities, rural electric cooperatives and PRC staff were parties to the case. Santa Fe, SunEdison, the Renewable Energy Industries Association of New Mexico, city of Las Cruces, and a dozen other groups and individuals joined the case. More than 450 people wrote in support of the third-party contracts.

Contact Staci Matlock at 986-3055 or smatlock@sfnewmexican.com.