Power supplies in New Mexico came into question after the recent closure of the San Juan Generating Station, a coal-fired power plant that supplied energy to customers of Public Service Company of New Mexico (PNM) – the state’s biggest power provider.
State officials said the company struggled to provide a renewable energy alternative to coal as required by the Energy Transition Act (ETA) passed in 2019 and signed by Gov. Michelle Lujan Grisham.
The law required the state shift to 100 percent carbon-free power by 2045, and included language to specifically support the transition at the San Juan power station by retraining its workforce in renewable energy.
But Theresa Becenti-Aguilar of the State’s Public Regulation Commission, which oversees utilities throughout New Mexico, worried PNM’s so far lacked such a plan, which could strain the four-corners region and draw anxieties for power supplies throughout the state.
“Since the passage of the Energy Transition Act (ETA), Public Service Company of New Mexico (PNM) has had difficulty putting together a viable renewable energy replacement to make up for the loss of power created by the San Juan Generating Station’s closure, and I was disturbed that PNM did not come to the region and present a viable plan for this following the closure,” she said in a statement.
How are power supplies protected in southeast New Mexico?
But in southeast New Mexico, leading utility for the region Xcel Energy aimed to quell such fears among its customers, touting its recent expansions in the area and resulting power reserves.
Xcel officials pointed to a metric known as the “planning reserve margin” which calculates a “cushion” of power supplied in excess of projected demand.
Reserve margins are widely used by the electricity utility industry throughout the U.S., per a report from the Energy Information Administration (EIA), which estimated the margin at 22 to 14 percent in southwest U.S., made up of New Mexico, Arizona and parts of Colorado, Nevada and southern California.
“The electricity utility industry employs a simple strategy for maintaining reliability: always have more supply available than may be required,” read the report. “Yet it can be difficult to forecast future electricity demand and building new generating capacity can take years.”
Adrian Rodriguez, Xcel’s president of New Mexico and Texas operations said its customers in southeast New Mexico and West Texas were connected to a grid known as the Southwest Power Pool and its reserve margin already met an increase to 15 percent expected to be required next year.
“Recent headlines have called attention to potential power shortages in New Mexico in the near future, but this is not the case in the eastern and southeastern parts of the state served by Xcel Energy,” Rodriguez said.
“Our communities in both New Mexico and Texas are connected to the eastern grid within the Southwest Power Pool where strong connections to a robust power market enhance our own native power reserves.”
Xcel adds electric facilities throughout Permian Basin to meet increased demand
The utility owns two conventional power plants in the region, and recently put into service two wind power facilities in eastern New Mexico and West Texas, per a report from Xcel.
That includes two natural gas-powered plants in Hobbs, along with purchases from the Hobbs Generating Station, along with the 522 megawatt Sagamore Wind Project in Roosevelt County completed in 2020.
Sagamore alone could power 194,000 homes each year, Xcel reported.
The company said it also holds “long-term” purchase contracts with other power generators in the region, and recently quadrupled its transmission import capacity.
Contracts included solar power from Solar Energy Centers based in Chaves County, along with five SunEdison solar farms in Eddy and Lea counties, and three New Mexico-based wind companies.
Throughout the eight states it operates in, Xcel expected to cut its carbon emissions by 80 percent by 2030 and hoped to be 100 percent carbon-free by 2050.
“We aren’t immune from the effects of high heat or unplanned maintenance issues, but from an operational and planning standpoint, we are in a strong position in the areas of New Mexico we serve for the foreseeable future,” Rodriguez said.
“And as our system grows, we will responsibly add generation in a timely manner.”
Adrian Hedden can be reached at 575-628-5516, [email protected] or @AdrianHedden on Twitter.