The New Mexico Supreme Court has upheld regulations allowing electric utility customers to purchase power from community solar projects. The unanimous decision rejected challenges from Southwestern Public Service Company, Public Service Company of New Mexico, and El Paso Electric Company. These utilities argued that a rule adopted by the Public Regulation Commission (PRC) in 2022 violated the state's Community Solar Act.

Justice Briana H. Zamora wrote, "We hold that the Utilities, in their various challenges, failed to meet their burden in demonstrating that the Rule is unreasonable or unlawful in light of the Act." The court's opinion provided legal reasoning for a decision announced verbally after hearing arguments in March.

The community solar law permits residential and certain other utility customers to buy electricity from local solar energy projects through subscriptions. Utilities deliver this power to subscribers via distribution lines, providing them with credits on their bills for their share of power. This program aims to offer solar power access to renters and others unable to install rooftop or on-site solar arrays.

Utilities contended that the PRC wrongly prohibited them from passing transmission costs onto subscribers. They argued this resulted in non-participating customers subsidizing those who do participate. However, the court disagreed, stating, "We hold that prohibiting the subtraction of transmission costs from the bill-credit rate is a reasonable exercise of the policy-making authority delegated under the Act to the New Mexico Public Regulation Commission."

The court explained that since the law does not mention transmission expenses but explicitly prevents passing distribution costs onto subscribers, it suggests legislative intent not to subtract transmission costs from subscriber bill credits.

The court also dismissed other challenges regarding interconnection costs for community solar energy generators. It noted that existing interconnection rules would govern these costs, stating, "The Utilities neither argue nor explain why the Commission’s existing interconnection rules are inadequate for community solar facilities."