New Mexico utility adding wind, solar and geothermal to its power mix

Public Service Co. of New Mexico parent PNM Resources (NYSE: PNM) said in its Feb. 27 annual Form 10-K report that its utility subsidiary is gradually adding more renewable energy to its portfolio.

The utility (called “PNM” in the filing), for example, has a 20-year agreement to purchase energy and renewable energy credits (RECs) from the Lightning Dock Geothermal facility built near Lordsburg, N.M. The facility, which is the first geothermal project for the PNM system, began providing limited power to PNM on Jan. 1, 2014. The current capacity of the facility is 4 MW and future expansion may result in up to 10 MW of generation capacity.

In June 2013, PNM entered into a 20-year power purchase agreement (PPA) with Red Mesa Wind LLC, a subsidiary of NextEra Energy Resources LLC, to purchase all of the power and RECs produced by Red Mesa Wind beginning on Jan. 1, 2015. Red Mesa Wind owns and operates the facility, which consists of 64 wind turbines having an aggregate capacity of 102 MW on a site west of Albuquerque, N.M.

In 2011, PNM completed its first major utility-owned renewable energy project aggregating 22 MW when five utility-scale solar facilities in New Mexico went online. In addition to these facilities, PNM completed ia solar-storage demonstration project in Albuquerque, which has a generation capacity of 0.5 MW. In 2013, PNM completed the installation of an additional 21.5 MW of utility-owned solar capacity at four sites, including expansion of capacity at two of the existing sites. In 2014, PNM completed construction of an additional 23 MW of PNM-owned solar PV facilities at three additional sites. PNM’s 2015 renewable energy procurement includes the construction by Dec. 31, 2015 of an additional 40 MW of PNM-owned solar PV facilities.

As of the end of 2014, the total net generation capacity of facilities owned or leased by PNM was 2,397 MW. PNM also obtains power under a long-term PPA for the power produced by New Mexico Wind, which has a capacity of 204 MW, and the output of the Lightning Dock Geothermal facility, which currently has a capacity of 4 MW. On Jan. 1, 2015, PNM began obtaining the power output of Red Mesa Wind.

PNM’s 2013 renewable procurement strategy almost doubled PNM’s existing solar capacity with the addition of 21.5 MW of utility-owned solar capacity. PNM’s 2014 renewable procurement strategy included the construction of an additional 23 MW of utility-owned solar capacity, a 20-year PPA for the output of an existing 102 MW wind energy center beginning in 2015, and the purchase of RECs in 2014 and 2015 to meet the RPS. PNM’s 2015 renewable energy procurement plan meets the state Renewable Energy Portfolio Standard (RPS) and diversity requirements within a Reasonable  Cost Threshold (RCT) in 2015 and 2016. PNM’s proposed new procurements include the construction of 40 MW of PNM-owned solar PV facilities in 2015, which are contemplated in PNM’s application to retire the coal-fired San Juan Generating Station (SJGS) Units 2 and 3.

In addition to PNM’s utility-owned PV solar facilities, PNM owns the 500 KW PNM Prosperity Energy Storage Project, which uses advanced batteries to store solar power and dispatch the energy either during high-use periods or when solar production is limited. The project features one of the largest combinations of battery storage and PV energy in the nation and involves extensive research and development of smart grid concepts. The facility was the nation’s first solar storage facility fully integrated into a utility’s power grid.

PNM has a PPA for the output from a 204 MW wind facility and purchases power from a customer-owned distributed solar generation program that had an installed capacity of 39 MW at the end of 2014. These renewable resources are key means for PNM to meet the RPS and related regulations, which require PNM to achieve prescribed levels of energy sales from renewable sources, if that can be accomplished without exceeding the RCT cost limit set by the New Mexico Public Regulation Commission.

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.