PNM adjusts San Juan replacement scenarios
Modeling errors cause changes in costs, savings
Public Service Company of New Mexico will file cost-and-benefit corrections next week with state regulators on power replacement options for the coal-fired San Juan Generating Station because of an error in utility modeling for different scenarios.
The company filed four options with the Public Regulation Commission last July for how to replace the power currently generated by San Juan after the plant closes in 2022. The various options contain different mixes of natural gas, renewables like solar and wind, and back-up battery storage systems, each with different cost estimates and projected savings compared with current costs for San Juan power.
It proposed four scenarios to provide regulators and parties intervening in the case with different options on what would be the best mix of replacement energy, taking into account total costs, environmental concerns and system reliability.
Since July, PNM has responded to requests by independent parties in the case to continue assessing its models and data inputs for each power replacement option. During that process, PNM identified an error in its original modeling, encouraging the utility to immediately notify all parties about the error and its intent to correct it.
“As we prepared to share modeling data with independent parties, PNM discovered errors in its modeling calculations that affect the proposed scenarios,” said utility spokesman Ray Sandoval in a statement. “… Although these miscalculations don’t impact the recommendations in the case, they minimally reduce estimated cost savings.”
The errors were caused, in part, by failure to accurately include the full cost of natural gas in the original modeling, Sandoval said.
After correcting the errors, the new models show a slight drop in costs for the company’s “preferred scenario,” from $4.678 billion before to $4.672 billion now. Monthly savings for the average customer also dropped slightly following the correction, from $7.11 per month to $6.87.
PNM’s preferred option reflects a broad mix of solar, wind, natural gas and battery storage.
For the second scenario, which proposes to place all new power in San Juan County to mitigate the impacts there of closing San Juan, the corrections called for adding 130 megawatts of solar and battery storage to the power mix. That lowers costs for that scenario from $4.732 billion before to $4.717 billion now, while adding two cents more in monthly savings to customer bills.
The other two scenarios are based entirely on replacing San Juan with renewables and battery storage. Corrections in those cases lead to minimal cost increases and changes in savings.