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As local utilities struggle to manage equipment shortages and face possible summer blackouts, state regulators are reaching out to the state Department of Homeland Security and Emergency Management to help ensure emergency preparedness.
Pandemic-induced supply chain issues are severely straining the ability of most New Mexico utilities to acquire equipment needed to maintain their grids, raising the potential for rolling blackouts during such extreme weather events as a summer heat wave or a severe storm that damages infrastructure.
The state Public Regulation Commission ordered all local utilities late last year – and again in January – to report on their supply chain problems, the potential for those issues to disrupt electric service, and ways in which the PRC and other government entities can help manage the situation. The responses showed widespread difficulties across the state, especially among rural electric cooperatives, according to the PRC.
The PRC endorsed a letter on Wednesday it planned to send to Homeland Security summarizing the challenges and listing possible solutions, which would involve joint responses from other agencies.
According to local utility feedback to the PRC, electric companies are facing “extraordinary” lead times for supplies critical to daily operations, such as transformers, conductors and meters. One large electric cooperative told the PRC that, in some cases, suppliers have stopped taking orders for equipment, possibly impeding the ability to restore service to affected customers during a severe weather event.
“Some state cooperatives are even being forced to consider a cessation of new service connections, either to preserve on-hand material or because of supply scarcities,” the PRC said in its letter to Homeland Security.
Equipment prices have also climbed by up to 30%. And many suppliers now tend to sell scarce equipment to larger utility customers, rather than apportioning supplies among all utilities, aggravating the challenges for smaller companies, the New Mexico Rural Electric Cooperative Association told the PRC.
“All of the above is just a sampling of the issues reported by New Mexico co-ops … and there is no end in sight,” the PRC said.
New Mexico has 19 rural electric cooperatives serving about 211,000 customers around the state.
Such large investor-owned utilities as the Public Service Company of New Mexico are also facing major difficulties.
“Some replacement materials are being impacted by a manufactured lead time growth of 60%, which can mean two or more months for some equipment and six months for other equipment such as wire and cable,” said the PRC letter.
PNM, which in February had warned of possible rolling blackouts this summer, decided to postpone the shutdown at the coal-fired San Juan Generating Station through the summer, which alleviated concern about a widespread electric shortage. But PNM says it could still have problems in an extreme heat wave and that it faces more energy shortages in summer 2023. That’s because new solar facilities slated to replace some power from the Palo Verde Nuclear Generating Station in Arizona – which PNM will lose from January 2023 – will also be delayed by supply chain issues.
“In light of the foregoing, the commission finds it prudent to involve other agencies in finding solutions to these issues before they become even more problematic,” the PRC wrote in its letter to Homeland Security.
In particular, the commission said it wants to develop joint responses, such as facilitating mutual utility support by sharing available equipment and materials, aggregating supply orders to make purchases more appealing to suppliers at lower prices, and coordinating efforts with neighboring states to assess needs and possibly pooling resources.
Homeland Security could help, especially in coordinating local emergency preparedness among municipal, county and state government, the PRC said.
Last week, Attorney General Hector Balderas also announced that his office is convening a new statewide “Energy Security Investigation and Emergency Preparedness Task Force” for an “all-of-government” effort to hammer out rapid-response plans to protect the public in case of blackouts or other energy system failures.
PRC Chairman Joseph Maestas said it was important to reach out to other government entities to address the situation.
“As an agency, it’s our obligation to begin notifying external entities,” Maestas told commissioners Wednesday. “… It shows leadership and being proactive in sharing critical information on the impacts from supply chain disruptions. It presents some potential solutions that this agency can’t necessarily move on, but other agencies can.”