The Integrated Resource Plan Protest is Our Current Case
As you remember from our Supreme Court Appeal - PNM's implementation of the Integrated Resource Planning Process is one in which they draft what they want and build a case to defend their pre-determined plan, advocates try to insert some representation of environmental and consumer interests into the IRP Hearings, and then the people are engaged at the end.
Concerns from the public about the utility's proposal have no real impact unless they have legal representation to intervene and file a formal protest at the New Mexico Public Regulation Commission.
New Energy Economy’s experts filed testimony in the case on May 4th.
PNM alleged “Most Cost Effective Plan” includes the addition of:
456MW of natural gas with the construction of three new gas plants.
The purchase of 114MW shares from Palo Verde*
No new solar for residential customers for 6 years. Then only a paltry 50MW
No new wind for residential customers for 11 years. Then only a paltry 100MW
No storage capacity
*(Not only is nuclear the most expensive form of electricity it also uses the greatest amount of water. According to PNM’s 2014 IRP, Palo Verde consumes 768 gallons of water per MWh).
Also, 100% of the stranded assets for San Juan Generating Station and Four Corners Power Plant charged to the ratepayers
David Van Winkle and Glenn Wikle found that PNM’s modeling was skewed to favor fossil fuels and nuclear. As they’ve done in the past, PNM constrained renewable energy selection and artificially inflated the cost of renewables as well as storage.
- PNM’s manipulation of the modeling artificially limited solar to 250MW and wind to 200MW.
- PNM projected a 35% increase in solar costs while even conservative models predict 35-50% decreases in solar costs over 20 years.
- PNM failed to include any storage capacity in their models.
These skewed projections lead PNM to justify the choosing a plan that increased profits for them but was not the most cost-effective for ratepayers. Further, by permitting the nuclear interests to be purchased to serve customers in 2023 and 2024, PNM shifts the risks and environmental liabilities, likely to be in the hundreds of millions of dollars, from PNM’s shareholders to ratepayers.
If PNM’s proposal is approved we expect more of the same:
Read David Van Winkle's full testimony HERE
Read Glenn Wikle's full testimony HERE
Our analysis can be found HERE.
The gist is that coal for another 14 years is absolutely unacceptable;
The plan's over-reliance on nuclear and gas - sets consumers up for heavy capital expenditures, decommissioning and clean-up down the road, and threats to public health and our environment.
The plan does not include any real consideration of storage.
While it's better than ever before on renewables.
1) that's not saying much given that PNM has 2% solar and 7% wind on its system
2) still too little and too late and
3) most of the renewables are for Facebook, not us!
Here’s the good about PNM’s IRP: the best version of our future, PNM finally admits, is entirely coal-free. This is, of course, the best path for New Mexicans in the areas of affordability, public health, and the environment. PNM plans to add 870 MW (490 MW solar and 380 MW wind) in the next five years (mostly for Facebook), but still very good, before any other resource is added.
60% of PNM’s generating resources come from coal: San Juan Generating Station (SJGS) and the Four Corners Power Plant, 10 miles apart. PNM’s IRP key findings are that coal is no longer economically competitive: “The most significant finding of the IRP is that retiring PNM’s…share of SJGS in 2022 would provide long-term cost savings for PNM’s customers…. the analysis found that PNM exiting its 13% share in the Four Corners Power Plant (FCPP) after the coal supply agreement expires in 2031 would also save customer money. The results of the IRP illustrate that energy needs are changing and replacing coal supply with renewable energy and more flexible generators will save money in the long run.” (p.1)
Hmmm, we said that it was uneconomic three years ago and that PNM should shut down its San Juan coal plant and ratepayers would realize a $340 million benefit.
Here’s the bad about PNM’s IRP: PNM’s plan is too little and too slow on feasible solar & wind resources and energy efficiency opportunities available today, and invests too heavily in nuclear and gas—a path that puts customers at risk of bearing the high costs of overreliance, and the consequences include:
- Renewables are less costly and better on every measure (jobs, health, environment) than nuclear and gas today! PNM already has too much (30%) expensive nuclear on its system; and
- Enormous costs for capital expenditures (capital expenditures at Palo Verde nuclear from 1993-2013 were $3 billion); and
- Climate risks – like all fossil fuels, burning gas for electricity generation results in the release of CO2 and the extraction, distribution, and storage of gas results in the leakage of methane (largest methane cloud seen from space is in NM), another powerful climate-altering toxin (also, the life-cycle of nuclear is not carbon free); and
- Price volatility - Increasing dependence on gas for electricity generation sets up households and businesses for potential electricity price spikes; and
- After 50 years of a “mature industry” there is still NO answer to all the radioactive waste from the production of nuclear power; and
- Environment and public health risks
- 5 years at SJGS is too long - A “conservative estimate” of the public health costs of the San Juan Coal Plant alone was approximately $60.8 million per year, according to a study conducted by New York University’s Dr. George Thurston. 1 out of every 4 of New Mexico's high schoolers have Asthma; lung disease, heart disease and cancer take a devastating toll on families in the Four Corners region. In 2016, San Juan County received an "F" by the American Lung Association, because of its high ozone days. Often called "smog" ozone makes it harder to breathe and the young and elderly are most at risk.
- 14 years at FCPP is too long – get out of coal now: the people on Navajo Nation disproportionately bare the brunt of the coal from these two highly polluting plants. In 2015 FCPP emitted the following carcinogenic pollutants: 26, 255 tons of nitrogen oxides; 7256 tons of sulfur dioxides; and 508 pounds of Mercury, millions of tons of coal ash, and more.
- Gas – pollution from gas production has reached the stage where it is contaminating essential life support systems — water, air, and soil — and causing harm to the health of humans, wildlife, domestic animals, and vegetation. Toxic chemicals are used at every stage of development to reach and release the gas.
- Nuclear - The principal risks associated with nuclear power arise from health effects of radiation. Apart from the damage caused by fires and explosions, accidents also release radioactive materials which can cause radiation sickness. Radiation exposure above a certain threshold, usually only received by workers and emergency teams in a troubled plant, causes acute radiation syndrome within hours of exposure. Depending on the dose of radiation this ranges from skin rashes, vomiting and diarrhea, to coma and death.
- Water Consumption – Water is a precious resource that must be conserved and protected, not wasted. Nuclear is the single largest water hog of any energy resource. FCPP unit 4 and 5 actual water consumption for 2015 was 16,460 acre-feet and was 12,555 acre-feet for 2015. The average usage for the two years is 14,508 acre-feet. PNM’s share is 13% or 1886 acre-feet per year. For the 15-year term of the coal contract 2017-31, PNM will consume 28,290 acre-feet or 9.2 billion gallons (To understand the magnitude of this water usage, Santa Fe’s entire consumption is about 3 billion gallons of water per year.)
Additionally, while this preliminary IRP discusses battery storage it does NOT include storage in any of its resource portfolio options. Other states like Nevada and California have already mandated not only inclusion in resource analysis but actual storage usage.