Dive Brief:
- Public Service Co. of New Mexico (PNM) is seeking renewable resources to meet renewable portfolio standard (RPS) mandates and to replace part of two coal-fired units that face retirement.
- PNM needs up to 150,000 MWh of new renewable resources starting in 2016 and is also considering adding 40 MW of photovoltaic (PV) capacity, a resource the utility believes can cost-effectively replace some coal-fired generation, according to a request for proposals.
- Proposals are due January 10 and PNM expects to notify bidders that make a short list by mid-February.
Dive Insight:
Like other utilities with RPS targets, PNM has been adding renewable generation to its resource mix and is set to add more. New Mexico's RPS climbs to 15% from 10% in 2015 and jumps to 20% in 2020.
But for the first time, PNM is looking for renewable generation because the utility believes it will be cost effective compared with other technologies. PNM wants some PV capacity to fill in for the pending loss of two units at the San Juan power plant. The price of solar has been falling rapidly in the last three years, making it cost competitive with other generating resources.
PNM issued a similar RFP a year ago to meet its RPS mandates. The New Mexico Public Regulation Commission is reviewing the results of that solicitation: a 102.4-MW wind power purchase agreement with NextEra Energy Resources and ownership of 23 MW of solar resources to be built by First Solar. PNM estimates that the energy from the solar generation will cost $72.61/MWh over 30 years.
