Monday, March 18, 2019

New Mexico Moves Toward Clean Energy, EIM Participation

By Hudson Sangree

New Mexico’s largest utility is still hoping to join the Western Energy Imbalance Market on schedule, despite a setback from state regulators, saying the planned move has taken on added significance after state lawmakers passed a bill requiring investor-owned utilities to get all their electricity from carbon-free sources by 2045.

“We are headed for a very high level of [renewable portfolio standard] similar to California,” Todd Fridley, vice president of New Mexico operations for Public Service Company of New Mexico (PNM), told the EIM’s Regional Issues Forum (RIF) in Albuquerque on March 11. “PNM is on board with this, and we’re moving toward these goals.”

Public Service Company of New Mexico wants to join the Western EIM by 2021. | CAISO

Senate Bill 489 would raise New Mexico’s RPS to 50% by 2030 and 80% by 2040, in addition to requiring 100% carbon-free energy by 2045 for IOUs. The measure has passed both houses of the state legislature and is awaiting signature by Gov. Michelle Lujan Grisham, who ran on a clean energy platform last year and championed the bill. If she signs it as expected, New Mexico would become the third state after California and Hawaii to establish a 100% clean energy mandate with a clear timeline.

“The Energy Transition Act is a promise to future generations of New Mexicans,” Grisham said in a news release. “When we were presented the chance to move toward cleaner sources of energy, we took it, boldly charting a course to a carbon-free future, permanently centering our commitment to lower emissions and setting an example for other states. Crucially, this legislation does not leave our neighbors in San Juan County behind, as we will provide millions for trainings and economic development.”

The measure could speed the closure of the coal-fired San Juan Generating Station in northwestern New Mexico. PNM is the largest owner of the plant and has said it intends to close it by 2022, despite protests from workers and local officials.

While planning to leave coal behind, New Mexico has experienced a boom in oil production in the Permian Basin area in its southeast.

At the same time, developers are moving to install thousands of megawatts of wind generation in the hills and plains southeast of Albuquerque. The area experiences some of the strongest and most reliable winds in the U.S. (See Tx Path Uncertain for Massive New Mexico Wind Farm.) Solar is also a growing industry in the Land of Enchantment.

By joining the EIM, PNM is hoping to take advantage of the real-time market’s ability to easily trade electricity produced from wind, solar and other resources across state lines in the West.

New Mexico is moving toward a clean energy future and away from fossil-fuel generation such as the coal-burning San Juan power plant. | PNM

New Mexico’s Public Regulation Commission unanimously approved a measure in December that would have smoothed the way for PNM to join the EIM by permitting it to recover about $21 million in costs. But after two new members were sworn in to the five-member commission, the PRC vacated its December order and decided to rehear the case. (See State Regulators to Re-examine PNM’s EIM Membership.)

Fridley told the RIF that it will be a close call as to whether PNM can stay on its timeline to join the EIM by spring 2021. It needs PRC approval by April 1 to do so, he said.

A PRC hearing examiner is expected to issue a recommended decision by Monday, and commissioners will likely vote on the issue before the end of March, he said.

Fridley said PNM is unwilling to move forward on joining the EIM without a decision by the PRC because of the costs. On the other hand, not moving ahead by April 1 could bump PNM out of CAISO’s queue for joining the market. Having to wait another year would mean New Mexico would miss out on approximately $17 million in predicted annual benefits, he said.

“If we don’t have a decision, that’s going to jeopardize the schedule, but we believe it will be approved,” Fridley told the RIF.

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