PNM’s draft plan is not enough

Utility needs to shift priority to renewables; close Four Corners coal plant sooner

In April, Public Service Company of New Mexico issued a draft Integrated Resource Plan for public comment. The plan must identify the most cost-effective portfolio of electrical generating capacity that would meet the projected electrical demands of the utility’s customers over the next 20 years. PNM proposes a complete shutdown of all four units of the coal-fired San Juan Generating Station by 2022. It also proposes eliminating its share of power generated by the Four Corners Power Plant when the current coal supply agreement terminates in 2031. PNM proposes to fill the gap in capacity with a mix of gas, nuclear and renewable energy sources.

Consistent with the industry trend, PNM correctly recognizes that coal is no longer an acceptable means of electrical power generation in the United States. Its adverse effects on human health through the formation of fine particulates have long been known. Moreover, it is the worst of all fuels from the standpoint of its impact upon climate change. However, PNM’s draft resource plan falls short for three reasons: First, the schedule for the phase-out of coal is too long. Four Corners’ power should be abandoned no later than 2022, when PNM proposes to shut down San Juan. Second, PNM’s heavy reliance on nuclear power to replace the lost coal capacity is neither in the best interests of its customers or the environment. Third, the portfolio relies far too much on natural gas generation and not enough on renewables.

Only about 10 percent of PNM’s current power sources are renewable. Nuclear makes up 21 percent, gas 11 percent and coal 54 percent. Purchased power is just under 4 percent. By 2025, PNM proposes dramatic cuts in reliance on coal. Renewables — solar and wind — would comprise about 15 percent and 16 percent, respectively, of the proposed portfolio. PNM proposes dramatic increases in gas, 23 percent, and nuclear, 24 percent, generation to replace the lost coal capacity.

To be sure, natural gas emits less CO2 than coal, but as a fossil fuel it still contributes substantially to climate change. Moreover, extraction of natural gas is associated with leaks of methane, which is a far more potent greenhouse gas than CO2. Nuclear energy is free of greenhouse gas emissions but generates high-level radioactive waste for which, after 50 years of trying, we still have not developed a safe, reliable means of long-term storage and disposal.

The obvious alternative to PNM’s reliance on gas and nuclear capacity is a heavier shift to renewable energy. Lithium-ion battery storage is suitable for utility-scale application, and its costs are also declining. According to a report prepared for the UN Environment Programme, in just five years the cost per kilowatt-hour for battery storage declined from $1,000 to $400, and the trend is clearly downward. Recently, the Tucson Electric Power Co. entered into a contract to purchase 100 MW of solar generating capacity along with 30 MW of battery storage at a reported net cost of $.045/KwH. As storage costs continue to decline, a much higher percentage of renewable resources can make up a utility’s portfolio with no adverse impact on reliability.

PNM should also abandon its leased capacity in the Palo Verde Nuclear Generating Station. In view of the substantial safety concerns of nuclear power generation, and the absence of any assurance that the resulting highlevel wastes can be safely disposed of, it is unreasonable for PNM to continue to rely on this power source.