Letter To The Editor: Climate & Energy Transition

Rio Grande Chapter Director
Sierra Club


You probably heard that PNM announced Monday that they will reach 100 percent carbon-free by 2040, five years earlier than ETA requires. This is very exciting news and moves us even faster toward protecting our planet.
PNM wasn’t specific about how they’ll get to 100 percdent and what technologies they’ll use to reach the goal. But they did say that they will be building 140MW of wind and that battery prices are falling fast. They also said they’d offer different scenarios and that “we” would decide together at the PRC. Though PNM will be doing 50 percent renewables by 2030 and 80 percent renewables by 2040 we want to push them to replace 100 percnt of San Juan energy with renewables and battery storage.
On Tuesday PNM held a meeting for people who have been participating in their Integrated Resource Planning (IRP) process and are watching the abandonment proceedings for San Juan, along with the proposals for the energy that will replace the coal.  
At the meeting PNM provided a timeline. = On June 1st they’ll likely make a renewable energy filing as they are required to do each year.  In this filing they’ll have to show some pretty big increases in renewables to meet their 20 percent by 2020 requirements. Before ETA PNM only had to provide 16% of customer energy from renewables by 2020 because of loopholes that the ETA eliminated.  With the Facebook project (which doesn’t apply to PNM’s renewables requirements) they’ll have another 6% solar. And finally with rooftop solar they’ll have another 4 percent, bringing them to about 30 percent renewable.
At the end of July, PNM will file their San Juan abandonment and replacement-energy application before the PRC.  During the meeting Tuesday they explained in a lot of detail the Request for Proposals (RFP) they have done for San Juan energy replacement and how they are modeling which will be the best alternative.
PNM said that they are still updating their load forecast and actual prices for the energy proposed by bidders in the RFP so they don’t have final details. They also have another RFP out now for more battery storage which could change what they ultimately propose at the PRC.
They said they will propose four different replacement scenarios to the PRC:
  • a least-cost scenario;
  • a scenario with 450MW of energy in the school district where San Juan is located’
  • a scenario with 450MW of renewables in the school district where San Juan is located; and
  • a scenario that includes no new gas.

The idea is that all of the scenarios can be evaluated by the PRC and the Public so that we can weigh costs and benefits.

But, implication of these four scenarios is that PNM is predicting  that some gas will be included in the least-cost scenario. As I said before, PNM still has it’s battery RFP out so there could be some new information to inform these alternatives.
As we have said throughout (and as PNM has done before), we still think it is likely that they’ll include what is called a peaker gas plant that comes online rarely, during periods of peak demand or to manage intermittency issues that can come from renewables. Peakers are different than gas-fired combined-cycle plants that operate much more often and are meant to provide base energy.
If they did build a peaker plant, they would have to pay it off (or depreciate it) and take the plant off the system by 2040 to meet their carbon free goal. So the plant would be paid off through rates that PNM customers paid, if approved by the PRC. That’s why PNM has to go to the PRC to get their proposal approved.
However, the Sierra Club does not think a peaker plant is necessary and in fact our national Beyond Coal Campaign funded a study that concluded that the cheapest option for replacing San Juan involves no new gas (you can see it here). We have presented the study to PNM and are working on presenting it at the PRC. As always, we will fight for 100 percent renewables replacement for San Juan energy.
Additionally, an important point that Tom Solomon with 350NM made coming out of today’s meeting, is that we want to make sure PNM includes a cost analysis including the social cost of carbon, because carbon is costly in ways far beyond our electricity bills. And on this note the Energy Transition Act requires the PRC to prefer least environmental impact and has some environmental requirements that it wasn’t clear PNM’s modelers were considering. We will continue to push PNM and the PRC on these fronts.
We are always available for questions and are happy to dive deep into the nuances.