PNM says it’s in good shape for renewables in 2016 and 2017

Public Service Co. of New Mexico (PNM) doesn’t plan any major new renewable energy additions to its system for 2016 or 2017 since it is in good shape in terms of complying with state renewable energy mandates.

On June 1, PNM filed with the New Mexico Public Regulation Commission its Renewable Energy Portfolio Procurement Plan for 2016 in compliance with the Renewable Energy Act (REA) and the rules of the commission. The plant covers areas like compliance with the state’s Renewable Portfolio Standard (RPS), distributed generation (DG) programs and renewable energy credit (REC) usage.

Patrick J. O’Connell, Director, Planning and Resources for PNM, wrote in supporting testimony: “The 2016 Plan proposes the continuation of the current customer-sited DG Capacity Reservation program but does not request any new REC procurements. PNM’s objective in developing the 2016 Plan was to comply with the RPS and resource diversity requirements of the Renewable Energy Act (‘REA’) and Rule 572 at the lowest reasonable cost to customers. PNM is projecting that compliance with the RPS and resource diversity requirements will be achieved in 2016 and 2017 with existing and previously approved renewable resources.”

This plan will meet the RPS requirements of 15% in 2016 and 2017, net of adjustments for the Large Customer Cap and Exempt Customers, with planned procurements from existing and approved renewable resources and programs.

The plan outlines PNM’s existing renewable resources:

EXISTING WIND

  • New Mexico Wind Energy Center (NMWEC): This is a 200-MW facility located in eastern New Mexico that is owned and operated by NextEra Energy Resources. Under a 25-year power purchase agreement (PPA), PNM purchases all of the energy and RECs produced by NMWEC, which on average has been about 525,000 MWh per year. The NMWEC was declared in-service in October 2003. A portion of the NMWEC output is used to supply energy and RECs for the PNM Sky Blue program (PNM Sky Blue). RECs used for PNM Sky Blue sales are not used for RPS compliance. The projected number of NMWEC RECs available for RPS compliance, excluding those RECs retired for PNM Sky Blue, is 507,584 MWh in 2016 and 505,697 MWh in 2017. The RPS compliance costs for NMWEC generation and RECs are projected to be a negative $3.8 million in 2016 and a negative $5.1 million in 2017, thereby reducing the overall compliance cost of the renewable energy portfolio.
  • Red Mesa Wind Energy Center: This is a 102-MW facility located in Cibola County, about 50 miles west of Albuquerque. PNM has a 20-year PPA to procure energy and RECs from this facility. Purchases under the PPA began as of Jan. 1, 2015. The energy is delivered to PNM at the Red Mesa station on the Kermac-West Mesa transmission line. Annual generation is expected to average 208,223 MWh and the RPS compliance cost is projected to be a negative $1.0 million in 2016 and a negative $1.5 million in 2017, thereby also reducing the overall compliance cost of the portfolio.

EXISTING SOLAR

  • The commission approved a stipulation that provided, in part, that PNM would construct 40 MW of company-owned solar photovoltaic (PV) facilities to be in-service as of 2016. Construction of these facilities is underway, and PNM anticipates completion by the end of 2015. The New Mexico retail jurisdictional share of these facilities will be 38.1 MW. PNM anticipates that the jurisdictional generation will total 110,741 MWh in 2016 and 110,188 MWh in 2017. Pursuant to the stipulation, costs for these facilities will be recovered through general rates pursuant to the provisions approving their construction rather than through PNM’s Renewable Energy Rider.
  • PNM owns 107 MW of existing solar photovoltaic generation, which includes facilities under construction during 2015. PNM currently allocates the energy produced from 1.5 MW to PNM’s Sky Blue program and the energy produced from 1.9 MW to PNM FERC customers.

OTHER (Geothermal)

  • The Dale Burgett Geothermal Facility (formerly known as the Lightning Dock geothermal facility) is located in the Animas Valley in Hidalgo County, about 20 miles southwest of Lordsburg, New Mexico. PNM purchases the energy and associated RECs from this facility under a PPA with a term of 20 years. The plant went into service in January 2014. Based on projections by the plant operator, the amount of energy and RECs to be delivered to PNM from this facility is 58,750 MWh for 2016 and 60,055 MWh for 2017. These projections reflect a planned increase in plant output from new equipment that will be installed during 2015. The projected RPS compliance cost for energy and RECs from this facility is approximately $4.3 million for both 2016 and 2017.
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.