PNM says it needs 700 MW of new resources ASAP

May 22, 2022 at 14:00 PM EDT

Public Service Company of New Mexico is asking energy developers to submit resource proposals that could add up to 700 MW. The catch? Those new resources need to have guaranteed in-service dates by or before May 1, 2023 or May 1, 2024.

Public Service Company of New Mexico (PNM) is asking energy developers to submit resource proposals that could add up to 700 MW. The catch? Those new resources need to have guaranteed in-service dates by or before May 1, 2023 or May 1, 2024.

Concerns are growing in the state over a potential energy shortage leading up to summer 2023.

The request for resources came in an unusually sharply worded statement from the utility, which said it had shared its challenges in “getting adequate energy resources approved and energized.”

It said the New Mexico Public Regulation Commission’s selection of a San Juan coal-fired generating plant replacement plan left the electric power system short 120 MW. It blamed the commission’s “overreliance on regional market purchases and demand response programs” for the problem. And it said the expected deficit has only widened as four “Commission selected third-party energy developers have been unable to deliver their new energy resources on time.”

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The utility said it had worked to ease the risk of rotating outages this summer by temporarily extending the San Juan coal-fired generating plant. It said ongoing concerns include uncertainty around the in-service dates for two of the four replacement resources, the timing of commission approvals for replacing previously leased capacity from the Palo Verde nuclear-generating station, and ongoing supply chain issues. Supply agreements with Palo Verde expire next year.

PNM said it “is effectively facing capacity deficits of as much as 450 MW needed to reliably serve our customers during the 2023 summer.”

Expectations are that two solar power plants will enter service before summer 2023. Those are the 450 MW Arroyo solar and battery system being developed by D.E. Shaw Renewable Investments in McKinley County, and the 70 MW Jicarilla solar and battery facility being built on Native American tribal land in Rio Arriba County.

Construction and startup dates for the other two projects – 8minute Solar Energy’s 130 MW Rockmont solar and battery facility and Panorama Holding and Photosol US Renewable Energy’s 300 MW San Juan solar and battery project – are less certain.

The coal-fired San Juan station was scheduled to be shut down at the end of June following an agreement reached in 2021 between the utility and its regulators to replace its capacity with solar energy.

RESOURCES

CLARION ENERGY MEDIA

POWER & ENERGY EVENT SERIES

PNM says it needs 700 MW of new resources ASAP