PNM shelves plan for 80-MW addition at San Juan power plant

Citing a revised load forecast, Public Service Co. of New Mexico (PNM) on Oct. 28 asked the New Mexico Public Regulation Commission to let it withdraw an application for approval of an 80-MW, gas-fired addition to its coal-fired San Juan Generating Station.

PNM said it has completed an update of its load forecast and has re-analyzed its need for additional resources to maintain adequate operating reserves in 2018. This analysis shows that PNM still has a need for additional operating reserves in 2018 and beyond, but at a reduced level, and that PNM can meet this need in the 2018-2019 period through market purchases.

“Accordingly, it is unnecessary at this time to proceed with PNM’s Application for a certificate of public convenience and necessity for the 80 MW Plant and would be premature to do so,” the utility wrote. “PNM filed its Application on April 26, 2016. Based on the most current load forecast available at that time, PNM concluded that a new resource would be required on its system by the summer of 2018: 1) to comply with reliability requirements; 2) to respond to supply and demand imbalances caused by increasing variable energy generation on PNM’s system; and 3) to provide capacity to partially replace San Juan Generating Station Units 2 and 3 after their retirement in 2017. PNM identified the 80 MW Plant as the most cost effective resource to meet those needs.

“PNM’s updated 2016 demand forecast, attached as Exhibit 1, incorporates information not available when PNM filed its Application, including the actual 2016 summer peak demand and the addition of the load and resources described in Case No. 16-00191-UT. The updated forecast shows a reduction in projected 2018 peak demand from 1,922 MW to 1,900 MW in 2018 and an increase in the planning reserve margin from 292 MW to 336 MW.

“Based on current information, PNM believes it will need additional resources to meet operating reserve requirements in 2020. PNM will continue to evaluate its resource needs as part of its ongoing resource planning activities and during the current IRP process in which PNM’s entire 20-year portfolio of supply- and demand-side resources will be evaluated in terms of cost and reliability requirements. PNM will make timely application to the Commission for resource additions as they are identified.”

PNM on April 26 applied with the commission for a Certificate of Public Convenience and Necessity (CCN) to construct, own and operate an 80-MW, natural gas-fired peaking facility to be located at the San Juan Generating Station in Waterflow, New Mexico. PNM had said it must add the 80-MW plant to comply with reliability requirements on PNM’s system. In addition, the plant was to allow PNM to respond to supply and demand imbalances resulting from increased amounts of variable energy generation on the system and will provide capacity to partially replace the coal-fired SJGS Units 2 and 3 after their retirement in 2017.

The 80-MW project was to include two 40-MW General Electric aeroderivative gas turbines. These generating units are similar to the generating unit at PNM’s La Luz Energy Center and the two units at the Lordsburg Generating Station.

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.