PRC revisits energy trading-market decision
Delay could jeopardize PNM membership in regional market
A Public Regulation Commission decision to re-examine Public Service Co. of New Mexico’s entrance into an energy trading market could cost ratepayers $10 million in savings.
The PRC decided on Feb. 6 to reopen proceedings on PNM’s pending membership in the Western Energy Imbalance Market, vacating a previous decision in December that authorized the utility to recover expenses for joining the EIM in a future rate case.
PNM doesn’t need PRC permission to join the market. But it needs to guarantee cost recovery before investing in hardware and software to participate in the EIM, which manages real-time trading among eight western states representing some 42 million electric consumers.
The market, managed by the California Independent System Operator, uses state-of-the-art technology to automatically find and deliver the lowest-cost energy, especially carbon-free generation to maximize environmental gains. Participating utilities collectively report more than $565 million in benefits since the EIM launched in November 2014, plus a 314,000 metric ton cut in carbon emissions by favoring excess renewable energy rather than fossil fuel generation.
PNM estimates the system will provide more than $10 million in benefits for New Mexico ratepayers per year to start, and up to $21 million or more by 2024 as the utility adds more renewables to the local grid. Customers benefit from lower-cost fuel purchases through the EIM, and from sales of excess PNM generation, which the utility passes on to ratepayers.
It generally takes two years for prospective entrants to begin actively participating in the EIM, and utilities can only join on April 1 of each year. That puts PNM on an expedited timeline to get in this April and start trading in 2021, otherwise participation would be delayed to 2022, depriving ratepayers of a year of benefits, said PNM Vice President of Generation Thomas Fallgren.
“PNM’s decision to join the EIM was dependent on the commission’s December 2018 approval,” Thomas said in a prepared statement. “PNM has suspended all work on the (EIM)...Any further delays or changes of the December order may now jeopardize our ability to reap the customer benefits.”
No party opposes PNM’s participation. But some want cost recovery restricted to actual expenses with no return on investment.
The PRC doesn’t expect to review the case until Feb. 27, which may be too late for PNM to meet its deadline, said Steve Michel of Western Resource Advocates. WRA and the Coalition for Clean Affordable Energy filed an emergency motion last Friday for the PRC to hear the case this Wednesday.
“PNM needs to move forward to get ready,” Michel said. “This case seems like a no brainer because of the obvious benefits for everybody. It makes no sense to hold it up.”