February 10, 2023

Investor-owned utilities prepare for summer load


The New Mexico Public Regulation Commission utility division director said he doesn’t think there will be power shortages this summer despite delays in projects to replace the coal-fired San Juan Generating Station that closed last fall.

The new commission heard updates on resource adequacy, particularly related to the Public Service Company of New Mexico, on Thursday. Most of the discussion focused on PNM, but the two other investor-owned utilities were also discussed.

“The IOUs have adequate resource plans for summer 2023,” Ed Rilkoff, the utility division director, told commissioners.

El Paso Electric is looking at 40 megawatts of additional purchases for the summer and Southwest Public Service is in good shape going into the summer, Rilkoff said

The Public Service Company of New Mexico is entering into short-term purchase power agreements to ensure there is enough electricity this summer. A PNM request for proposals for 150 megawatts is due next week.

The questions about resource adequacy, particularly for the state’s largest utility, stem from three main things: the passage of the Energy Transition Act spurring new requirements for renewable energy, the closure of the San Juan Generating Station and the expiration of some leases at the Palo Verde Generating Station.

As those plans were being implemented, global supply chain problems slowed down the deployment of solar resources and increased the costs for materials and power purchase agreements.

This impacted utilities across the country. In New Mexico, PNM was impacted the most because of the retirement of San Juan and the decision not to renew the Palo Verde leases.
Concerns about summer resource adequacy as the power plant closed sparked regular bi-weekly meetings last year with the PRC and PNM. 

The PRC has also had internal staff resource adequacy meetings to review the information PNM was providing.

Commissioner James Ellison suggested a meeting with the three IOUs and the commissioners. He said it would be reasonable to ask the three utilities to each give a 20 minute presentation.

The other two commissioners supported that idea.