PNM seeks approval of new solar projects, revised geothermal deal

On June 2, Public Service Co. of New Mexico (PNM) filed its Renewable Energy Procurement Plan for 2015 with the New Mexico Public Regulation Commission.

The utility, which is a subsidiary of PNM Resources (NYSE: PNM), is seeking approval of renewable energy procurements during 2015 that will enable it to fully comply with the state’s Renewable Portfolio Standard (RPS) quantity requirements at a total annual cost that is less than the Reasonable Cost Threshold (RCT) for both 2015 and 2016.

PNM is requesting commission approval of three basic things.

40 MW of Owned Solar – Construction in 2015 of 40 MW of PNM-owned solar photovoltaic (PV) facilities at sites within PNM’s service area. Renewable Energy Credits (RECs) from these facilities are needed to meet the projected 2016 RPS quantity requirements. PNM requests a commission-issued certificate for these facilities, to the extent that the commission determines that one is required. These solar PV facilities will be built under turnkey construction contracts with: ASI/GGS, a joint venture between Affordable Solar Inc. and Grupo Gransolar SA; and Juwi Solar Inc.

These facilities will be constructed during 2015 at four sites within PNM’s service area and are expected to go into service during the fourth quarter of 2015 as construction is completed. The facilities will use polycrystalline solar PV modules and single-axis tracking. Construction and related costs for the 40 MW facilities are projected at about $79.3m. In 2016, the output from these facilities is projected to be 116,276 MWh.

Capacity Reservation – A capacity reservation in 2015 to customer-sited solar systems sized above 100 kW (ac) of 2 MW at a price of $0.02 per kWh.

Lightning Dock Change – Modification of the Lightning Dock geothermal purchased power agreement (PPA) procurement that was approved in a prior case, to reduce the maximum purchase obligation to 60,000 MWh annually to better match PNM’s need for RECs and the actual geothermal production experience at the facility. PNM will have an option to purchase additional energy generated above that amount at a reduced price.

The commission approved the procurement of energy and RECs from a proposed 10-MW geothermal generating facility under a PPA with Lightning Dock LLC. The facility went into service in January 2014 and currently has a capacity of about 4 MW. PNM and Lightning Dock are revising the PPA to reduce PNM’s maximum purchase obligation from the total output of a 10 MW facility to 60,000 MWh annually, which is equivalent to about an 8-MW facility. PNM will have an option to purchase additional energy up to the equivalent of 10 MW and a right of first refusal for energy from any expansion beyond 10 MW. The Lightning Dock facility is now named the Dale Burgett Geothermal Plant.

Renewble plan costs pegged at $21.2m in 2015

Costs of the plan are projected to total $21.2m in 2015 and $25.5m in 2016, net of avoided fuel cost and including fees for registration and retirement of RECs through the Western Renewable Energy Generation System (WREGIS).

PNM’s existing renewable energy portfolio consists of all resources previously approved by the commission, including resources that are still under development during 2014. They include wind, solar and geothermal resources, including customer-sited distributed generation (DG) solar facilities, and a small number of RECs from hydroelectric generation.

Said Patrick O’Connell, Director, Planning and Resources for PNM, in accompanying testimony about the 40 MW of new solar projects: “Affordable Solar is a solar installation company based in Albuquerque, New Mexico with significant experience installing solar statewide. Grupo Gransolar is a Spanish company with significant experience building utility-scale solar facilities world-wide. Juwi is based in Boulder, Colorado and is the American subsidiary of the Juwi Group, a large German global renewable energy developer. Under separate turnkey (design-build-transfer) contracts, each supplier will construct 20 MW of solar facilities on two sites. The four sites will be interconnected to PNM’s load-side distribution grid serving the PNM metro service area (generally Belen to Santa Fe). PNM has obtained options on several sites in the area and is negotiating options on others. Final selection of sites will depend on approval of the procurement in this Case, site costs, permitting feasibility and interconnection costs.”

O’Connell added: “The new solar PV facilities will use polycrystalline solar PV modules. This is a different type of module than the thin-film modules PNM has procured for its previous large-scale solar projects. Both are proven technologies that have production characteristics suited to New Mexico’s climate. The most important reason for the selection of the polycrystalline system for this procurement was cost. Projects bid into PNM’s renewable RFP that proposed polycrystalline modules were lower in cost than bids based on thin-film technology. Apparently, manufacturers of the polycrystalline modules have lowered their prices due either to production efficiencies or government export subsidies. PNM has experience with polycrystalline modules at its Prosperity site, the solar PV with battery storage project, and this technology operates successfully on many customer-sited DG facilities.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.