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PNM believes that distributed generation — in which customer- or utility-owned electricity generators are located at the site at which the energy is used — will play a signficant role in electricity generation in the future. Distributed generation allows environmentally conscious consumers the opportunity to ensure that at least part of the electricity they use is generated from renewable resources that can include solar or wind power. Since the cost to generate electricity using new distributed generation technologies, especially renewable technologies such as photovoltaic systems and fuel cells, is currently more expensive than purchasing electricity from a large utility, many people choose to generate only part of the electricity they need. These individuals choose to remain connected to their local utility so that they can purchase the extra electricity needed during their peak usage time, and either sell back or receive a credit for the excess electricity they generate during low usage times. This approach, called interconnection, allows an individual to make a smaller investment in generation equipment while using the utility grid as the backup system. It also ensures that the highly reliable electric service that customers are used to receiving from their local utility doesn't change. Utility-owned distributed generation provides a utility with the flexibility to add local generation to help solve localized energy demand problems or postpone costly central generating plant additions.
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