After months of deliberation between the Truth or Consequences City Commission and the city’s Public Utility Advisory Board, commission members rendered a majority decision to advance proposed revisions to the municipality’s Customer Generated Renewable Energy Program (Ordinance No.735) to publication with a minor addition Wednesday, September 14. With this action, the measure will be published and community members provided an opportunity to review the proposed changes. The ordinance will then return to the city commission in October for a scheduled public hearing and final consideration by the board.
While poised to move to publication of this measure during their August 24 regular meeting, commissioners recognized concerns raised by mayor pro-tem Rolf Hechler, and instead opted to postpone their decision to await a legal review. During discussion of the ordinance at that session, Hechler noted how approximately 80 current utility customers who established private solar arrays in compliance with what proved to be an illegal 90-percent generation limit, would be subject to a significant cut in return payment for excess energy they generate. Although the “illegal” generation limit was eliminated in the proposed revisions, Hechler maintained the changes would be unfair to the customers who originally complied with the erroneous limit, as they would be forced to accept a payback reduction for excess energy they generate. It was noted that customers in this position were receiving approximately 13-cents per kilowatt-hour for excess energy generated, and that the proposed ordinance revisions would reduce their repayment rate to nearer 6-cents per kilowatt hour.
In response to this situation, Hechler suggested the city consider a grandfather clause which would allow individuals restricted by the soon-to-be-defunct 90-percent generation limit to continue receiving the approximate 13-cents per kilowatt hour rate. City attorney Jay Rubin and contracted city attorney John Appel were tasked with examining this concern, as well as the potential of establishing a grandfather clause.
In returning to the proposed ordinance September 14, commissioners reviewed a formal letter responding to the board’s concerns that was prepared by Appel.
The communication first affirmed that payment in excess of the city’s “avoided costs” (costs the city incurs in obtaining electricity) does not pose any issues with the state’s anti-donation clause. Appel, who was in attendance by phone, said a federal policy established in 1978 directs municipalities to implement a “reasonable” rate structure. He said this regulation does not discriminate against cities paying out less than their avoided costs, but also does not require such municipalities to pay out more than the avoided cost rate.
Appel emphasized that the intent of the proposed ordinance revision was for the city to continue purchasing excess energy generated by private solar arrays, or other alternative energy systems. However, the new regulations would set a payback limit for the extra energy the city purchases that is equivalent with the rate the city pays to acquire electricity from other sources, which currently has been calculated to near 6-cents per kilowatt-hour.
While noting the city does have the right to change its policies and that the payback reduction many city customers might realize does not violate any established legality, Appel addressed the proposed grandfather clause. He told commissioners this option would likely be problematic, as it would effectively create two classes of residential energy providers, those who are already in place and complied with the 90-percent limit, and those who might establish private energy generation systems in the future.
Expressing empathy for individuals who originally complied with the illegal generation limit, Appel indicated there was no legal obligation for the city to effect a compensation strategy.
Commissioner Destiny Mitchell noted that at some point in the future, the city could realize enough private solar generation systems that the municipality would not be in a position of needing to purchase excess energy. She suggested some form of cap on the amount of energy the city might purchase, in order to potentially discourage individuals seeking to establish such systems in the community with a motive for profit.
In response, Appel said he felt the establishment of a limit or statute of limitations would be appropriate. While noting a set percentage might be possible, Appel recommended the board consider including a statement in the ordinance, which would establish that the city would excess energy only when it is needed.
Mayor pro-tem Hechler acknowledged Appel’s statement and reiterated his original concern about the city’s payback reduction being a hardship for customers that complied with the illegal mandate. He again suggested the creation of a grandfather clause would allow the municipality to address this inequity.
Appel told commissioners if they allowed for the grandfathering of older accounts, he wasn’t sure how this would stand up against potential challenges by other customers. While not a significant amount, Appel suggested this approach would effectively have other utility customers subsidizing the grandfathered accounts and he indicated this practice could be rebuffed by customers being asked to fund the compensation plan.
After hearing a statement from Public Utility Advisory Board Chairman George Szigeti reaffirming the reasoning behind the advisory board’s support for the recommended revisions, commissioners agreed to move forward with publication of the proposed amendment, but also agreed to include a statement in line with Appel’s previous comments. In this regard, commissioner Mitchell entered a motion to approve publication with the addition of a statement in line with Appel’s comments, effectively establishing that the city would only purchase excess energy when it is needed.
With a second duly recorded, commissioners approved the motion 4-to-1, with the mayor pro-tem dissenting.
As previously noted, this action will assure publication of Ordinance No.735 and a public hearing, before final consideration is given to the issue next month.
CODE REVISIONS ADOPTED
Commissioners conducted three public hearings tied to proposed code revisions, which did not receive any statements of support or objection from community residents. All three measures were previously introduced by T-or-C Police Department Chief Victor Rodriguez and he provided the commission with an overview of each measure as they were addressed.
•Board members first considered Ordinance No.737, which the Chief said would level the playing field for local businesses by requiring commercial vendors to secure a business license. He noted exceptions were in place for special events and/or organized city activities.
Following Rodriguez’ summary, mayor Amanda Forrister accepted a motion to adopt the ordinance, which was then endorsed with an unanimous vote.
•Moving on to Ordinance No.738, Chief Rodriguez explained how this revision would address the use of BB and/or pellet guns within the city limits. He assured commissioners the change would still allow for the use of such weapons within the city, but would now place responsibility for where the pellet (or BB) goes upon the user.
Commissioners acknowledged the change and with no discussion, joined in unanimous approval of a motion to adopt the ordinance revisions.
•Tending to the third ordinance (No.739), Rodriguez explained that this measure sought to introduce a 10pm to 6am closure for most municipal facilities. Currently, the Chief said such restrictions are only in place for Ralph Edwards Park and Rotary Park. He told commissioners the proposed revision would extend the nightly hours of closure to the golf course, rodeo arena, shooting range and other facilities. As with ordinance No.737, board members were assured that exceptions would be in place for special events and/or organized activities.
With this noted, commissioners once again joined in an unanimous vote of support for a motion to adopt the ordinance revisions.
Following another public hearing, which again rendered no comments of objection or support, commission members unanimously approved the issuance of a Small Brewer Off-Site liquor license for Sidekixx, located at 820 Cedar Street. Commissioners welcomed a statement from the T-or-C Brewing Company’s proprietor John Masterson, who confirmed purchase of the former Bedroxx Bowling Alley and Point Blanc Winery complex. He also affirmed the intent was to move forward with the previous owners’ vision for the facility, keeping all facets, including the pizza ovens and bowling alley in operation.
After questioning a few aspects of the proposal, commissioners and city manager Bruce Swingle expressed appreciation for the efforts Masterson and his wife have put forth in establishing the T-or-C Brewery. They further shared statements indicating confidence in the plan Masterson outlined and then joined in unanimously endorsing a motion to approve the liquor license request.
With the approval, Masterson said the establishment would be closing Friday, September 16 for transition and staff training, with the goal of reopening most operations by the first weekend of October. He noted that learning the requirements for operating the bowling alley was taking some time, and indicated that some delay might be in order before bowling operations could be fully reestablished.
OTHER BOARD ACTION AND REPORTS
•After conducting a fifth public hearing with no citizen response, commissioners unanimously approved Ordinance No. 740, authorizing the issuance of water system improvement revenue bonds, seeking a total of $750,000. This revenue will be obtained through a loan with the Bank of the Southwest and will be directed toward pre-development financing for a planned $7 million-plus water system improvement project. Modrall Sperling law firm representative Chris Muirhead was on hand to outline the proposed measure and upon board approval, he said this initial revenue would put the project’s design phase into motion.
•Board members unanimously approved a Memorandum of Understanding with Spaceport America, which will allow spaceport visitor center to remain operating out the Lee Belle Johnson building at least for the coming year. City manager Swingle noted how the visitors center has not lived up to the promises made by spaceport officials. However, he noted that recently renewed efforts by spaceport authorities in this regard are encouraging and he gained commissioners support to continue the agreement for the time being, while waiting to see if improvements are realized.
•Commissioners opted to extend a contract package and agreement with SmithCo Construction for the Main Street Water System Improvement Project. Assistant city manager Traci Alvarez said the contract was established for approximately $6.85 million. Later in the session Alvarez noted that funding for this project was nearer $7.7 million with the additional funds earmarked for potential contingencies.
•Board members also approved a contract extension with SmithCo Construction for the coming three years. Alvarez explained how SmithCo was previously contracted to address a variety of the city’s development needs. While regularly extended on a year-to-year basis, she noted how SmithCo is engaged in the Main Street District Water System improvement project. Alvarez said the Main Street water project would require SmithCo’s services for the next three years, and suggested that extending the agreement for the remaining contract years would simplify processes as the major endeavor moves forward.
•Commissioners unanimously approved a rental agreement with El Terrero Construction, a firm selected by the New Mexico Department of Transportation to effect renovation of the I-25 interchange in Williamsburg. City manager Swingle said the firm was seeking to utilize space adjacent to the city’s solar farm for material storage and construction support. Board members were told the firm would pay a monthly rental charge of $750 for the scheduled two-year construction project.
•After confirming a $10 per hour increase, commissioners further joined in unanimously approving a contract renewal for city attorney Jaime (Jay) F. Rubin, LLC.
•During his regular report, city manager Swingle alerted commissioners to complications with the New Mexico Department of Transportation’s roundabout project targeting North Date Street. As with projects the city has been recently engaging, Swingle said bids received by NMDOT for construction of the roundabouts came in well above their established budget. He relayed how state officials’ first move was to seek additional funding from the city, which is not available and will likely not be available for the near future. While suggesting the city is obligated to cooperate with the project, the city manager said he would be participating in a conference call with NMDOT authorities and would provide members with an update regarding any changes and/or actions that might result.
•Swingle also announced a communication from the Department of Finance and Administration confirming that the city’s final budget had met all requirements and was officially accepted. He expressed a sincere thank you to Finance Director Carol Kirkpatrick and her team in the finance department for this important achievement.
•During her regular report, commissioner Merry Jo Fahl confirmed that T-or-C’s Geronimo Springs Museum would be holding a special event to recognize the museum’s 50th Anniversary. Fahl said the celebration will take place Saturday, September 24, and encouraged everyone to consider stopping by to enjoy the many planned activities and musical entertainment.
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