PNM Resources CEO Pat Vincent-Collawn on Wednesday expressed skepticism of the $1.9 billion Tres Amigas energy project near Clovis, saying low natural gas prices are dampening demand for the project’s electricity.
“There is not a business case to make that work,” Vincent-Collawn said in answer to a question she fielded after a speech to Economic Forum in Albuquerque.
Tres Amigas is intended to connect the nation’s eastern and western electricity grids and allow energy producers to find and service energy markets nationally.
“Right now, there is just not a market,” Vincent-Collawn said. “(Natural) gas prices are so low,” which allows utilities to generate affordable electricity closer to their end users.
PNM Resources’ electric utilities will generate 20 percent of the energy they sell from renewable resources by 2020, but there are limits to how much renewable energy PNM can sell, she said.
The company would like to export renewable energy to California, where electricity prices can be twice what PNM obtains in its own markets. But regulations keep most out-of-state vendors from selling into California, she said.
The price of solar panels has declined quickly, but since solar-generated electricity is available only about 30 percent of the time, it won’t be a sufficiently reliable resource unless someone invents a reliable and cost-effective battery technology that will allow solar-generated power to be stored, Vincent-Collawn said.
Solar energy is an important part of a balanced fuel portfolio, which is why PNM is investing $90 million over 4 years in solar facilities, according to the company.