Global supply chain challenges may make it hard for the state’s largest utility to meet electricity demands next summer and the New Mexico Public Regulation Commission is concerned that these could include unanticipated problems.
These supply chain challenges were sparked by the COVID-19 pandemic, which had impacts like slowing manufacturing and changing consumer demands. This has delayed a couple major solar projects in New Mexico that are intended to replace the electricity from the San Juan Generating Station. The PRC is concerned that this could lead to challenges meeting electricity demand next summer after the San Juan Generating Station is scheduled to stop providing power to the state’s largest electric utility. Commissioner Joseph Maestas raised the topic during the regular meeting on Wednesday. Maestas brought it up in connection to solar projects that are intended to replace the San Juan Generating Station and have been delayed.
While the cause of the collapse of a cooling tower at unit one of the San Juan Generating Station has not yet been identified, Public Service Company of New Mexico has provided the New Mexico Public Regulation Commission with some more information regarding the event. Following the collapse, the PRC issued a notice of inquiry into the incident, which occurred in late June, and opened a docket. PNM filed a response to questions raised in the notice of inquiry on Aug. 16 and the commission discussed the response during the weekly meeting on Wednesday. In its response, PNM stated that the cause of the collapse has not yet been identified.
Government entities, utilities and watchdog groups say a merger between Public Service Company of New Mexico and Avangrid could harm both ratepayers and the environment unless protections are included. These entities filed testimony in a New Mexico Public Regulation Commission case evaluating the merger. This merger is subject to the PRC approval as well as approval from the Federal Energy Regulatory Commission. PNM’s parent company, PNM Resources, is seeking to merge with Avangrid, a U.S. subsidiary of renewable energy giant Iberdrola, which is based in Spain. The PRC hearings related to the merger are scheduled to start on May 3 and testimony has been filed expressing a variety of concerns.
State regulators asked the state’s largest utility to defend a past decision to continue leasing shares of a nuclear power plant as it now asks regulators to approve replacing that electricity with renewable sources. Public Service Company of New Mexico (PNM) has filed to replace the energy it gets from leased shares of the Palo Verde Nuclear Generating Station with renewable sources. The filing came earlier this month and the New Mexico Public Regulation Commission issued an order beginning the process, which was unanimously approved on April 21. The order requires PNM to file additional testimony regarding unresolved issues from a 2015 case. These unresolved issues are about a decision to acquire additional leases and extend its leases in the Palo Verde facility.
New Mexico’s largest electric utility is planning to reduce its baseload power while increasing power generated by renewable sources and possibly adding natural gas generation with turbines capable of producing power from hydrogen.
Baseload generation provides a relatively steady supply of power. Currently, Public Service Company of New Mexico, or PNM, relies on coal-fired power plants and a nuclear generating station to provide baseload power. The company filed a 2020 integrated resource plan with the New Mexico Public Regulation Commission in January and is awaiting approval includes exiting coal in 2024 and reducing its capacity in Palo Verde Generating Station, which provides nuclear power.
An integrated resource plan is essentially a roadmap looking at where the utility wants to be in the future.
While the plans provide a roadmap for going forward, they are not a set-in-stone path. PNM’s 2014 integrated resource plan indicated the San Juan Generating Station would remain operating until 2053. Three years later, the utility announced that it would close the coal-fired power plant in 2022.
In November 2020, PNM announced it would leave the coal-fired Four Corners Power Plant by the end of 2024, seven years earlier than planned. The accelerated exit will bring an end to PNM’s coal assets in New Mexico two decades ahead of the clean energy mandate set forth in the state’s Energy Transition Act of 2019.
Pat Vincent-Collawn, PNM Resources’ chairman, president and CEO, said at the time the move was “a major step in our vision to create a clean and bright energy future and achieve our industry-leading goal of emissions-free energy by 2040.”
PNM currently owns 13 percent of the plant’s two operating units, representing 200 megawatts (MW) worth of energy generation. PNM is also engaged in a coal supply contract with the Navajo Transitional Energy Company (NTEC). PNM had initially planned to exit the facility in 2031, when its coal supply contract ends. Instead, PNM and NTEC have reached an agreement through which PNM will pay $75 million to NTEC to end its coal contract by December 31, 2024 and then transfer its ownership of the plant to NTEC for $1.
PNM filed its abandonment and securitization application for the plant with the Public Regulation Commission (PRC) earlier this month.
We are one year into the Energy Transition Act, and utilities across the state are now charting their courses towards carbon-free generation. The goal is to meet demand for electricity with 100 percent “zero-carbon” sources by 2045 for investor-owned utilities and 2050 for electric cooperatives. Renewable energy is now cost-competitive with other sources of power generation like coal and nuclear; and investments in renewable energy projects have steadily grown in New Mexico, which is rich in both wind and sun. But renewables don’t produce energy as reliably as coal, and utilities say that poses a big problem for delivering electricity to customers when the wind isn’t blowing, or the sun isn’t shining. So, they’ve turned to natural gas to supplement power needs while bringing more renewables online, touting it as a crucial stepping stone in the transition to renewables.
What do they all have in common? Well, they’re smashed into a really full NM Environment Review. So grab a snack and strap on your reading glasses. There is a ton of environmental news this week. Usually, only email subscribers get to read the entire review, but we’re feeling generous this week.
Backers of the controversial Energy Transition Act — which is meant to ensure the shuttering of a massive coal-burning power plant in San Juan County and push New Mexico toward more reliance on renewable energy — won a victory Saturday when a state Senate committee gave it a positive recommendation following a four-hour debate. The Senate Conservation Committee voted 5-3 to give Senate Bill 489 a “do-pass” recommendation. Last year, the same committee killed a similar proposal. “This transition to renewable energy will not be easy,” said the bill’s primary sponsor, Sen. Jacob Candelaria, D-Albuquerque. A major purpose of the legislation, he said, is “to lay out a just transition for impacted communities to move away from coal and towards a green energy economy.”
Last winter, snows didn’t come to the mountains, and the headwaters of the Rio Grande suffered from drought. In April, the river—New Mexico’s largest—was already drying south of Socorro. And over the summer, reservoir levels plummeted. Meanwhile, the U.S. Supreme Court battle between Texas, New Mexico and the U.S. government over the waters of the Rio Grande marches onward. At a meeting at the end of August, the special master assigned to the case by the Supreme Court set some new deadlines: The discovery period will close in the summer of 2020 and the case will go to trial no later than that fall.