PNM files for rate coverage on several major power plant projects

PNM Resources’ (NYSE: PNM) New Mexico utility, PNM, on Dec. 11 filed with the New Mexico Public Regulation Commission for an increase in electric rates of $107.4m, which includes costs like a retrofit project for a coal-fired power plant.

“In order for PNM to be able to maintain reliability, continue forward with cleaner energy resources and to best serve our customers in a world of rapidly evolving technology and tougher environmental regulations, this rate request is critical,” said Pat Vincent-Collawn, PNM Resources’ chairman, president, and CEO.

Key capital additions to rate base include:

  • Four new solar centers online by 2016 (40 MW, $79m);
  • La Luz Natural Gas Plant online by 2016 (40 MW, $56m), which is a peaker that will serve customers when demand is highest, to support renewable energy growth and ensure reliable power under a variety of grid conditions;
  • Emission control equipment at the coal-fired San Juan Generating Station to comply with federal haze regulations (Selective Non-Catalytic Reduction equipment to reduce NOx emissions, $81m). Units 1 and 4 at San Juan will get the SNCRs, while Units 2 and 3 will be retired under a deal with EPA;
  • Critical resources for the future: Purchasing Rio Bravo Generating Station (formerly Delta Person) natural gas plant ($38m) and purchasing leases for Palo Verde Nuclear Generating Station Unit 2 ($163m); and
  • Investments to keep the PNM electric system reliable, including a $30m investment at PNM’s Rio Puerco Switching Station, a critical hub in the transmission system, $8m to improve substation security, and an upgrade to PNM distribution system operations center.

The balance of the request is related to declining energy sales driven by the still recovering New Mexico economy, improved electric appliance efficiency, and PNM’s own energy efficiency and customer rooftop solar programs.

In the rate filing PNM also proposes to more fairly align electric rates with actual costs to serve customers, while still supporting energy efficiency and rooftop solar programs. The filing proposes an electric rate design focused on balancing environmental priorities and customer choices with the need to maintain reliability.

PNM Resources is an energy holding company based in Albuquerque, N.M., with 2013 consolidated operating revenues of $1.4bn. Through its regulated utilities, PNM and TNMP, PNM Resources has approximately 2,572 MW of generation capacity and provides electricity to more than 746,000 homes and businesses in New Mexico and Texas.

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.