Dive Brief:
- Public Service Co. of New Mexico, known as PNM, has proposed adding 12 MW of utility-owned battery storage at two solar facilities where distribution system feeders are overloaded, company officials said Friday during the company’s first quarter earnings call.
- The pair of 6 MW battery resources “matches the lowest cost option for solving the overloaded feeders, plus it provides the benefits of adding battery storage capacity to our system,” PNM Resources President and Chief Operating Officer Don Tarry said.
- PNM load grew 1.4%, in the first quarter compared to the prior year, with colder temperatures driving residential and commercial demand. In its Texas service territory, PNM Resources subsidiary Texas-New Mexico Power Co. saw double-digit demand growth from crypto miners.
Dive Insight:
May is typically when demand begins to rise on PNM’s system, and the utility is bringing new resources online to meet summer loads.
PNM is preparing to integrate the 150 MW Arroyo energy storage project this month, and expects to add another 20 MW “following soon after,” said Tarry. It is the utility’s first large-scale battery storage facility.
“These batteries are connected to 350 MW of solar that will also come on line this year, and we expect our generation capacity to reach 62% carbon-free at the end of this year,” he said. Next year, the utility plans to add another 500 MW of solar paired with 400 MW of battery storage, he said.
The smaller 12 MW of battery storage proposed last week is “one way that we are using available technology to provide new cost efficient [transmission and distribution] solutions to meet evolving grid needs and reach our carbon-free goals,” Tarry said.
PNM asked the New Mexico Public Regulation Commission for a decision on the batteries by the end of the year and expects the facilities to be operational in June 2024, Tarry said. The project is a “non-wire type of opportunity” that helps with grid resilience and to address the “solar saturation” issue, he added.
“We see this as kind of a pilot program,” Tarry said. “There are other feeders that run into the same problem.”
PNM officials said they had few updates regarding the company’s proposed merger with Avangrid, which regulators denied in 2021. In April, PNM and Avangrid extended the deadline for their merger agreement through July 20, eyeing a second review by regulators.
The utilities appealed the rejection to the New Mexico Supreme Court and in March the Public Regulation Commission joined the two utilities in requesting the appeal be dismissed. That sets the stage for the case to be remanded to the commission for further debate and reconsideration. The companies would then need to file a motion for reconsideration, said PNM officials.
The process could include input from other intervening parties and assignment of a hearing examiner “or it could be managed at the commission level,” PNM Resources Chairman and CEO Pat Vincent-Collawn said during the earnings call.
PNM officials also discussed the pending sale of NM Renewable Development. PNM Resources owns half, along with American Electric Power.
“This has not been a significant contributor of earnings ... but we have built an attractive portfolio of unregulated renewable assets and the sale proceeds will provide funding for our regulated investments,” Vincent-Collawn said.
“We have an equity value of $100 million on those assets,” Tarry said. “And I would tell you, we would expect a gain on that, based on what our anticipation in the market would be.”
The sale is expected to close by the end of the year, he said.
PNM Resources reported ongoing earnings of 55 cents per share in the first quarter, compared with 50 cents per share in the same period of 2022.
