New Mexico utilities look ahead to renewable energy mandates

New Mexico News

ALBUQUERQUE, N.M. (AP) — A solar project meant to provide 10% of Gallup’s electricity for the next two decades is falling short of expectations, highlighting just one of the challenges as investor-owned utilities and rural electric cooperatives across New Mexico look to boost their share of renewable energy to meet the state’s escalating benchmarks.

Utilities scrambled to meet a statewide requirement in 2020 for having 20% of retail electricity sales come from renewable energy sources. Not all of them met the goal. The state’s largest electric utility — Public Service Co. of New Mexico — missed the mark by a small percentage but expects to come into compliance soon when a new wind farm in Torrance County begins commercial operations.

Utilities will be under more pressure going forward as landmark legislation adopted in 2019 calls for doubling the renewable energy standard to 40% in four years. It will double again to 80% by 2040.

PNM executives said the energy law changed the way renewable energy production was calculated by removing some exemptions. That left the utility with a slight deficit at the end of 2020.

However, they’re confident they can meet the standards going forward.

The utility’s portfolio will get a boost with the addition of roughly 650 megawatts of solar and another 300 megawatts of battery storage capacity that will replace the coal-fired San Juan Generating Station when it closes in 2022.

“We’re basically going to be at the 40% number as of 2023,” said Nick Phillips, PNM’s director of integrated resource planning. “While there could be some changes due to additional loads that come on or variations from weather production from year to year, we don’t expect to have to make much investment to meet that 40% number, if any at all.”

Aside from the solar and battery resources being built now, PNM last summer unveiled its latest solar array — a 50-megawatt facility in the desert northwest of Albuquerque that was built to power Facebook’s Los Lunas Data Center. With the Encino Solar Field, the utility said its ownership and power purchase agreements total nearly 290 megawatts of solar and more than 350 megawatts of wind.

Xcel Energy, another utility operating in New Mexico, recently marked the completion of the state’s largest wind project to date. Meanwhile, Pattern Energy has started work on a transmission line that will funnel electricity from wind farms in central New Mexico to other western markets.

But some critics question whether future renewable energy benchmarks can be reached, given the challenges of hitting 20% in 2020.

“Not a single utility in the state is able to meet the lowest standard on time, supporters are worried electric bills will skyrocket and thousands of jobs are on the chopping block,” said Larry Behrens, a regional director for the traditional energy advocacy group Power The Future.

Environmentalists say New Mexico’s mandates already are helping to push more renewable energy onto the grid and that legislators need to keep encouraging more solar and wind development. They argue that the state needs to ween itself from fossil fuels and that customers will see more benefits as costs continue coming down.

In Gallup, Electric Department Director John Wheeler said that maintenance issues and less sunshine than expected have caused the 9.8-megawatt solar farm just east of the city to fall short of its designed power output.

Among the problems, he said the panels often face the wrong direction because the actuators are prone to failing and repairs and replacement are not keeping pace. He also said the panels aren’t cleaned with the frequency that the desert environment necessitates, the Gallup Independent reported.

Standard Solar, which owns and operates the solar farm, said in a statement that every solar project faces its own challenges and the company is working with the city and utility to resolve the issues.

For Public Service Co. of New Mexico, the challenges will include integrating large-scale battery storage into the mix and avoiding the pitfalls of high costs and the capacity issues that hampered early adoption in places like California.

“New Mexico is in a much better place,” said Tom Fallgren, PNM’s vice president of generation, “but we’ve got to focus on the reliability component as we continue the transition.”

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