PNM moves forward in clean energy transition without Avangrid

Despite starting the year by losing out on a chance to merge with an energy giant and the boosted capital that would’ve brought, the Public Service Company of New Mexico remains committed to meeting its clean energy goals.

Don Tarry is the president and chief operating officer for PNM Resources, PNM’s parent company. He talked to business leaders at an Economic Forum of Albuquerque event on Wednesday morning about PNM’s clean energy efforts.

The discussion came a few months after Avangrid, a subsidiary of the large electric utility Iberdrola, announced the termination of a merger agreement it had with PNM. The New Mexico Public Regulation Commission in 2021 rejected the proposal, and the court still hadn’t decided on an answer to PNM and Avangrid’s appeal of that by the end of 2023, so Avangrid pulled out.

One of the major fallouts for PNM was not getting the increased capital benefits that would’ve come with combining with Avangrid, something that would’ve been beneficial in a renewable energy transition that’ll likely require costly investments.

Still, PNM has remained steadfast in its clean energy roadmap .

“During the merger, we didn’t take our eye off the ball. We continued to execute our business plan in New Mexico,” Tarry said.

He said at the end of 2023, PNM was 60% carbon-free. The utility aims to be 100% emissions-free by 2040, and it must achieve that by law by 2045.

Investor-owned utilities like PNM also have to achieve 40% renewable energy by 2025, according to a new state law. PNM expects its generation portfolio will be over 50% by then, Tarry said.

“So we’re on that journey,” he said.

Tarry said things are changing rapidly in the energy sector, and the only way to make progress is by living in the present while reimagining the future.

“We can’t do the same things the way we’ve always done them,” he said.

He pointed out how Ibedrola is investing billions of dollars in new technology like hydrogen. He said leveraging innovation is something PNM will continue maneuvering through.

Responding to a question on Wednesday about how PNM will still raise capital without the Avangrid merger, Tarry said PNM Resources operates in both New Mexico and Texas. Texas-New Mexico Power is a subsidiary of PNM Resources, which serves over 270,000 homes and businesses in Texas.

PNM Resources raises capital by selling shares of stock, Tarry said. He said he’s back in Albuquerque after being on the road for the last couple of weeks, talking about the benefits of New Mexico and Texas.

“And so we’ll continue to work to raise capital, so we can make investments in the energy transition,” he said.

It’s likely PNM will entertain other merger proposals down the line.

Tarry said renewable energy efforts are also a way to pull economic interest into New Mexico. He said there’s a lot of potential for wind and solar energy in the state.

“A lot of large companies have sustainability goals, so when they look around and they see a utility in New Mexico is leading the way on our carbon footprint and our commitment to the economy and so forth, it provides great interest,” he said.

However, businesses face challenges with site readiness. Tarry acknowledged this and said it’s something that can be challenging for a regulated utility like PNM to address.

Kurt Browning, partner with Titan Development, said it’s difficult to set up commercial properties when PNM time frames for setting up service are always longer than anticipated. He said his company works in Colorado and Texas, too, and experiences the same problems there.

“I’m looking for any answers,” he said.

In response, Tarry agreed the issue needs to be solved. He said he has lots of ideas, but business communities and local governments need to come together to work on it. He said the challenge now is utilities can’t build for the future.

“We like to collect. I mean, if there’s a business that wants to come to New Mexico, we’re very committed to deliver,” he said. “We want to have that site ready.”