Protest to PNM’s Plan: Not cost-effective for ratepayers

August 2014

PNM’s replacement power plan violates the mandate under New Mexico law to provide “the most cost-effective resource portfolio,” fails to meet New Mexico’s Renewable Energy Portfolio Standard, and ignores the public interest

Protestors rally at a recent PNM shareholders' meeting, demanding PNM put more renewables in their replacement power plan.

Protestors rally at a recent PNM shareholders’ meeting, demanding PNM put more renewables in their replacement power plan.

We filed our Protest with the Public Regulatory Commission this Thursday calling on the Commission to reject the Integrated Resource Plan (IRP) 2014-2033 filed by Public Service Company of New Mexico (PNM). This is their proposed replacement power plan for the closing units of the San Juan coal plant.

Our Protest cites a number of Errors and Deficiencies in PNM’s IRP. First and foremost, PNM’s plan is not “the most cost-effective resource portfolio” for New Mexico ratepayers.  PNM’s cost for nuclear is 7.9 ¢/kWh and coal is 6.9 ¢/kWh – these are prices that don’t include forthcoming environmental regulations. PNM’s cost for solar is 6.8 ¢/kWh and wind is 3.7 ¢/kWh and there is no risk to ratepayers for costs for environmental regulations associated with solar and wind. PNM’s plan is not the lowest cost solution. It is not the best plan for the health and welfare of New Mexicans or the environment. It is not the best jobs outcome. It locks in nuclear and coal energy, precluding any significant increase in the deployment of renewable energy for the next 20 years.

PNM’s plan also fails to meet the state’s Renewable Portfolio Standard (RPS). PNM’s plan to acquire 132 MW from fleeing owners at San Juan Generating Station and only bring on a total of 60 megawatts of additional solar capacity in the next six years will make it fall short of the 2020 RPS. Despite the great and growing decline in renewable costs and the opportunity to pass these cost savings on to ratepayers, the IRP fails to take advantages of renewables or adequately account for storage potential.

Further, we are concerned with the proposed minimum investment in energy efficiency despite its proven cost savings.  PNM’s IRP’s underestimation of the cost savings and value of energy efficiency compared to ACTUAL energy savings from energy efficiency by other utilities in the region have been much higher.

The outcome of PNM’s IRP process was predetermined.  “Participants in the process were informed that they could comment on PNM’s predetermined replacement plan but that their input would have no significance bearing and would not alter the outcome. This is fundamentally antithetical both to the spirit and the letter of the IRP process, which requires evaluation of risk and uncertainty for the needs of customers,” says New Energy Economy Executive Director, Mariel Nanasi

“Evidenced by its coal-centric IRP and the continued and consistent obstruction by PNM to fight environmental regulation and rack up wasteful legal fees, PNM pursues a culture of litigation rather than a culture of renewable energy investment, the consequences of which are antithetical to the best interests of New Mexicans,” says New Energy Economy Director, Mariel Nanasi.

Additionally, PNM failed to consider or calculate the combined impact of both carbon and coal ash regulations promulgated by the EPA.  This will have enormous financial implications for ratepayers. “The risk from regulatory costs for carbon and coal ash make a decision to reinvest in coal reckless,” says Nanasi.

Although New Mexico is experiencing severe drought the IRP fails to take adequate account of the enormous amount of clean water used in it coal fired and nuclear power plants compared to other resources.

The production of clean renewable and diverse energy resources is of paramount public importance and will affect the health and welfare and economic well being of New Mexicans. Conversely, the continued reliance on coal-fired sources that are causing global warming are having and will continue to have negative economic, social and health consequences. PNM is the source of more than 50 percent of all carbon pollution in the state, which contributes to global warming and local pollution that is causing alarming health impacts.

We conclude our Protest by asking the PRC to reject PNM’s IRP saying that it is permanently flawed because PNM seeks to justify PNM’s continued dependence on coal and nuclear without fairly and evenly weighing the alternatives.

Read the full Protest here.

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