Dive Brief:
- PNM Resources last week published a draft Integrated Resource Plan for utility subsidiary Public Service Co. of New Mexico, calling for increased renewable generation and an end to coal-fired power by 2031.
- The plan includes retiring the San Juan Generating Station units 1 and 4 by the end of 2022, and exiting a deal that gives the utility a 13% participation share in the coal-fired Four Corners Power Plant. PNM would replace the coal-fired energy with more renewables, natural gas and possibly energy storage, while maintaining its stake in the Palo Verde Nuclear Generating Station.
- PNM will take public comment on the plan, and must file a final report with the New Mexico Public Regulation Commission in early July.
Dive Insight:
It's clear from the latest utility long-term plan that coal is on its way out, but just how long it will take is the lingering question. PNM has historically encountered regulatory skepticism over its proposals to close the San Juan Generating Station and rate hikes to cover those costs.
This latest proposal, however, appears to have secured support among stakeholders for its plans to rely more on renewable energy while completely shutting down the San Juan coal plant.
PNM already intends to mothball San Juan units 2 and 3 by the end of this year, but will continue running the other two units until the existing coal-supply agreement expires. After that, the utility says renewable energy prices have fallen and clean energy will play a greater role in its energy mix.
"Market forces are driving a rapid evolution of energy resources, and the current data clearly shows that replacing the coal in our current portfolio with a cleaner energy mix that includes more renewables and natural gas is the best, most economical path to a strong energy future for New Mexico," PNM Resources CEO and vice-chair for the board of the Edison Electric Institute Pat Vincent-Collawn said in a statement.
Vincent-Collawn noted that while the plan offers "significant environmental benefits" and is cost-effective, dropping its share of the Four Corners generation will impact the economy of the Four Corners area, as well as families and businesses. "PNM will work with the communities that will be most affected and other stakeholders to mitigate the effects of these changes," she said.
PNM said in its plan that the "best mix of new resources" includes solar energy and gas-fired peaking capacity. "The mix may also include energy storage, depending on the economics of the proposals PNM receives through a solicitation that the company will conduct as described in the action plan," the utility said.
Maintaining its generation at the Palo Verde Nuclear Generating Station is a key portion of the plan. PNM owns 288 MW of PVNGS and leases another 114 MW. The leased capacity expires in 2023 and 2024, however.
