|
News Release
July 6, 2005
PNM Electric System Serves Record Demand; Company
Says Customer Needs Require New Power Sources
Albuquerque: With the PNM electric system this week providing more
power to New Mexico customers than ever before, company officials told state
regulators today they need significant new generating capacity to meet customer
demand for the next 10 years.
PNM today filed a 10-year resource plan with the N.M. Public Regulation Commission
(PRC) that details how the company will meet the growing electric needs of
PNM and Texas-New Mexico Power Co. (TNMP) customers through 2014.
On Tuesday afternoon, customers of the two utilities, both owned by PNM Resources,
required 1,698 megawatts (MW) of power, enough electricity to power 1.4 million
average-sized New Mexico homes. This broke the previous record of 1,661 MW
set in July 2003.
"This summer's intense electric demand highlights the need for us to
continue to invest in our system," said Hugh Smith, senior vice president
of energy resources for PNM Resources. "Our plan is a roadmap for how
we will continue to provide reliable, affordable electric service to our New
Mexico customers into the future – and how we'll do so in an environmentally
sensitive manner."
The document filed today outlines PNM's plans to:
- expand the existing Afton Generating Station, near Las Cruces, N.M., and
devote it to the needs of PNM and TNMP customers in New Mexico;
- make significant modifications to Reeves Generating Station in Albuquerque
that will increase its output, improve its fuel efficiency and strengthen
its environmental performance for every megawatt hour (MWh) generated;
- purchase 50 MW of power from a third-party supplier beginning in 2006;
- build a small-scale solar generating facility and offer incentives to customers
who generate their own power; and
- complete a biomass power plant assessment in 2005, with the goal of having
a plant in service by 2009.
Company officials expect load growth of about 2.2 percent per year for the
next 10 years. Maintaining a state-required reserve margin of 15 percent will
require the addition of 189 MW in 2006 and a total of about 500 MW over the
next 10 years. PNM currently has 1,796 MW of capacity to meet the needs of
New Mexico customers.
The plan also marks a turning point for PNM, Smith said.
"Our two decades of surplus generating capacity are behind us. The addition
of 47,000 TNMP customers in New Mexico, sustained growth in central and northern
New Mexico, and a new state renewable portfolio standard all mean we need to
add resources as soon as next year in order to maintain reliability for all
of our customers," he said.
While the plan does not require PRC approval, PNM will need regulatory approval
to expand Afton and run it for the benefit of residential and business customers
in New Mexico. PNM today filed a certificate of convenience and necessity (CCN)
to begin that approval process.
PNM currently is seeking PRC approval of a gas efficiency program. Consistent
with PRC implementation of the Efficient Use of Energy Act, which became law
earlier this year, PNM will also develop an electric efficiency program. However,
Smith said PNM officials do not believe the electric efficiency program can
grow quickly enough to allow the company to forgo any of the near-term generation
projects listed in the resource plan filed today.
Expansion at Afton Generating Station
PNM is proposing to use the Afton Generating Station, a 141 MW gas-fired plant
near Las Cruces, to provide power to PNM residential and business customers
on days of high electric demand beginning in 2006. The plant currently is used
to meet the needs of PNM wholesale customers throughout the Western United
States. PNM also is requesting permission to convert the single-cycle plant
to a combined-cycle plant by 2007 in order to meet the needs of both PNM and
TNMP customers. The conversion would expand the plant's capacity to 272 MW
and greatly improve its fuel efficiency. In a combined-cycle plant, both a
gas turbine and a steam turbine are used in an integrated thermal cycle that
recovers waste heat and improves overall efficiency. PNM would build a hybrid
wet-dry cooling system to minimize the plant's water use.
Solar photovoltaic facility and customer-owned generation program
PNM is pursuing plans to build a 25 kilowatt solar photovoltaic facility by
the end of 2005. The location of the plant, which would be the largest grid-tied
photovoltaic system in New Mexico, has not yet been determined. In addition,
PNM is developing a set of incentives to encourage its residential and business
customers to purchase or lease small-scale photovoltaic systems and feed solar
power onto PNM's grid.
Purchase power agreement
PNM plans to begin purchasing 50 MW of power from a third-party supplier in
2006. The electricity would enter PNM's transmission system at the Blackwater
Conversion Station near Clovis, N.M. This power, combined with existing capacity
at Afton, would help PNM meet an identified 189 MW shortfall of power to serve
residential and business customers in summer 2006.
Upgrade of Reeves Generating Station
PNM plans to convert one unit at the 154 MW Reeves Generating Station, a gas-fired
plant near Interstate 25 and Paseo del Norte in Albuquerque, to a combined-cycle
facility in 2008 and retire all three existing boilers now onsite. This would
add 52 MW of capacity and improve both the plant's fuel efficiency and its
environmental performance per MWh generated.
New biomass plant
PNM is currently studying the feasibility of building and owning a biomass
plant rather than purchasing biomass-generated power from a third-party power
producer. PNM estimates the plant, ranging in size from 10 to 50 MW and using
forest thinnings as fuel, will be online in 2009 in order for PNM to continue
meeting the requirements of the state renewable portfolio standard.
| 
