Public Service Company of New Mexico says all its electric generation will be carbon-free by 2040, five years earlier than required under the state’s new Energy Transition Act.
PNM President, Chairman and CEO Pat Vincent-Collawn announced a plan to accelerate its clean-energy goals Monday afternoon during an event at the Indian Pueblo Cultural Center. Gov. Michelle Lujan Grisham, members of the state’s U.S. congressional delegation, and local and state officials attended the event, timed to coincide with Earth Day.
The Energy Transition Act, which the state Legislature passed this year and the governor signed into law, requires New Mexico’s public utilities to derive 50 percent of their electricity from renewable resources by 2030 and 80 percent by 2040, followed by a transition to completely carbon-free generation by 2045.
PNM said it has since realized it can achieve those goals five years early, Vincent-Collawn said at the event.
“After its passage, we went back to consider scenarios that would get us to the 2045 goal without hurting customers’ pocketbooks and while maintaining reliability,” Vincent-Collawn said in a speech. “We soon realized that we were not only up for the challenge of a 100 percent emission-free goal by 2045, but that we could do better…by becoming the nation’s first investor-owned utility to achieve a zero-emission goal by 2040.”
By shaving five years from the timeline, PNM can significantly increase environmental benefits.
“In today’s numbers, those five years equals a reduction in carbon in our state by over 32 million metric tons, or the equivalent of 6.9 million cars on the road for one year,” Vincent-Collawn said. “This also saves 15 billion gallons of water. That amount could fill up 300 million bathtubs.”
Coinciding with the announcement, PNM released a general overview of how it plans to achieve the goals.
It reaffirmed previous commitments to completely shut down the coal-fired San Juan Generating Station outside Farmington in 2022 and pull out of the nearby Four Corners Power Plant by 2031. That alone will cut emissions by more than 70 percent, according to PNM.
Starting in 2028, the company will also begin closing natural gas plants around the state, with the last ones shuttered by 2040. It will replace lost generation with renewable resources like wind and solar, and possibly geothermal power.
Power from the Palo Verde Nuclear Generating Station in Arizona will also continue to supply PNM’s grid, at least through 2045.
PNM said it could consider installing a “peaking” natural gas plant that turns on and off as needed when wind and solar are unavailable, smoothing the grid’s transition to clean energy. But it will rely on “technology advancements,” particularly in battery storage, to achieve 100 percent emissions-free generation by 2040.
To kick things off, PNM will seek Public Regulation Commission approval in June to build another 140 megawatts of wind generation, increasing renewables on the grid by about 4 percent.
Eliminating coal generation and replacing it with cheaper solar and wind will make the energy transition cost-effective for consumers, according to PNM.
The U.S. Department of Energy’s National Renewable Energy Laboratory and Barclays Research estimate the price for utility-scale solar power plummeted by 80 percent from 2010-2017, from $5.44 to $1.11 per watt. And wind has declined by a similar amount.
In fact, PNM says shutting San Juan will immediately result in a $6 to $7 per month savings on an average customer’s bill because of the lower cost of replacement resources.
The company will add transmission and distribution — including power lines, substations and other infrastructure — to the grid as it transitions to renewables and clean energy. That will raise costs to ratepayers going forward, but sticking with coal and natural gas would be more expensive, according to PNM.
PNM will offer details on potential replacement resources in its next “integrated resource plan,” which maps long-term goals over 20 years, with public meetings to solicit input starting in June.
PNM also must file an application for PRC approval this spring to abandon San Juan, along with details on replacement power.
Those things could turn controversial, depending on what PNM proposes. Some environmentalists oppose continued reliance on nuclear power from Palo Verde. Others could object to installing a natural gas peaking plant.
“There is no question the lowest-cost way to provide electricity in New Mexico is with renewables,” said Sierra Club New Mexico Chapter Director Camilla Fiebelman in a statement. “Relying on gas even in the short term is a step back, not forward.”
Some oppose the Energy Transition Act overall, including many Republicans who voted against it. The true costs are unknown, they say, and ratepayers will pick up the bill.
“The most negative impacts will be felt by lower-income families who spend a proportionally larger share of their monthly income on energy,” said Rep. Larry Scott, R-Hobbs, in an op ed in Monday’s Journal.