11:00 a.m. CDT, May 4, 2012 Public Service Company of New Mexico customers will get more of their electricity from sun, wind and geothermal sources by 2013. They're also likely to see monthly bills increase in the months ahead as the company recovers the costs of building renewable energy facilities or leasing capacity in order to meet state mandates.
The state's largest utility company this week submitted a procurement plan to the New Mexico Public Regulation Commission that calls for adding renewable energy sources in 2013 and 2014. The state has ordered investor-owned utilities to draw 15 percent of electricity from renewable sources by 2015, and part of that must be from solar energy.
Groups that have criticized PNM in the past for failing to meet renewable energy targets were pleased with the plan after an initial review. "It looks like a good plan," said David Van Winkle, who helps monitor energy issues for the Rio Grande Chapter of the Sierra Club. "Total solar does increase a lot. We like that. And for the first time, PNM is proposing to add geothermal."
"From what I've seen, it is encouraging," said attorney Steven S. Michel of the nonprofit Western Resource Advocates. "It looks like they are genuinely trying to comply with state standards."
PNM plans to pursue a mix of leasing and building new facilities as well as crediting customers who install rooftop solar-power systems.
The plan would add 20 megawatts of solar power to PNM's current 22 megawatts of solar capacity. PNM also would lease 10 megawatts of geothermal power from a facility to be built by Lightning Dock Geothermal near Lordsburg. Another nine megawatts of electricity would come from what is called distributed generation -- the solar power from rooftop systems.
Currently, most of the power for PNM's half-million customers comes from decades-old coal-fired generating stations in northwestern New Mexico. Providing more energy from renewable sources instead of coal isn't easy, quick or cheap. But advocates such as Van Winkle and Michel think the move is essential in light of the environmental and health costs of coal.
Almost every decision PNM makes regarding electricity, from the cost to ratepayers to the mix of energy sources, has to be approved by state regulators. Regulators also get to decide if those costs are reasonable before approving rate increases.
The company in January submitted a rate rider request to start charging customers annually for renewable energy programs required by the state, PNM spokeswoman Susan Sponar said.
State regulators allow utility companies to recoup the costs of increasing electricity capacity from renewable and nonrenewable sources -- whether that's from adding new wind farms or new electric lines. "PNM is asking to start charging customers once renewable energy plans are approved by state regulators instead of waiting," she said.
"This mechanism lets us adjust bills as we go, rather than waiting to add these costs after a rate case a few years down the road," she said. "In the end, it's cheaper for customers and synchs with the state's renewable energy act.
State regulators plan to hold hearings on the rate rider beginning May 14.
Customers are likely to start paying an extra $1.40 a month on average by August for renewable energy capacity added in 2011 and 2012. Total costs for new and existing renewable energy in 2013 would be about $19.7 million, according to PNM.
PNM also is required to file an energy efficiency plan, which it plans to do later this year. By 2014, the company is required to help customers reach an equivalent energy savings of 411 kilowatt-hours.
Sponar said that currently the company's energy savings program has helped customers save about 192 million kilowatt-hours of electricity, the amount of electricity 26,600 homes use in a year. Sponar said those energy savings also meant 37,382 fewer tons of greenhouse gas emissions and water savings of 23 million gallons.
Among ways utilities help customers save energy are offering rebates on energy-efficient appliances and deals on compact fluorescent bulbs.