PRC ORDERS UTILITIES TO EXPLORE LARGER SOLAR PROJECTS

At today’s Formal Open Meeting, the Public Regulation Commission voted to adopt a proposal by Commissioner Jason Marks to require the three investor-owned electric utilities serving the state, PNM, SPS/Xcel, and El Paso Electric to evaluate including larger, “utility-scale” solar energy projects in their procurement plans for the coming year. The PRC also adopted a proposal by Commisson Chairman Ben Lujan to aske the utilities and others to think about an eventual increase in the RPS to 20%, in conjunction with including demand management (conservation) as a “source” of renewable power.

New Mexico’s Renewable Portfolio Standard law requires the utilities to file a renewable-power procurement plan each year by September 1. The PRC today voted to send each of the utilities’ plans to a hearing examiner for further analysis (a routine process) and to require that three specific, solar power questions be answered by the utilities, PRC staff, and others interested in the application:

i) If the utility was to meet 20% of its RPS requirements from solar, how much nominal generating capacity would be required?
ii) Can, and should, the Commission require a public utility to issue an RFP for 5-30 megawatts of solar power to apply toward its renewable energy portfolio standard as part of its coming 2006 renewable energy procurement plan?
iii) If a public utility were required to issue an RFP for 5-30 megawatts of concentrated solar power to apply toward its renewable energy portfolio standard, what effect would doing so have on the cost threshold?

The state’s RPS law requires the PRC and utilities to value diversity of renewable sources in meeting the overall renewable requirements. However, utility renewable power plans have thus far relied largely on wind power. Wind power is an inexpensive and well-understood technology, but is limited by its unpredictability. New Mexico has close to 300 mw of wind capacity installed, but it is possible that on a hot afternoon in June when electricity demand is peaking, little or no wind power will be available.

In asking the PRC (at last Thursday’s Public Work Session) to include an exploration of larger-scale solar projects as part of the hearing process for next year’s procurement plan, Commissioner Jason Marks cited New Mexico’s position as the number two state for solar potential and the often-expressed desire to make New Mexico “the renewable energy state.” He noted that a Southern California utility has signed a contract for a 2,000 mw solar installation, while our utilities are talking about token projects in the 50 kw range.

The Commission’s solar requests do not mandate – at this time – that the utilities initiate an RFP for a larger-scale solar project. The Commission’s Orders do force the issue to the front-and-center and will give the Commission the financial and other information it needs to decide whether large scale solar has a place in utilities’ diversity plans.

The Orders were supported by a unanimous vote of the Commission.