Public Service Company of New Mexico executives carried a stark message Wednesday about a potential power shortage next summer because of the closure of San Juan Generating Station.
Speaking to the New Mexico Public Regulation Commission, they described a disconcerting situation for June 2022. The executives — Tom Fallgren, Ron Darnell and Mark Fenton — said they continue to work on solutions.
Commission Chairman Stephen Fischmann of Las Cruces introduced the possibility of a “brownout” next summer, or a situation in which electricity would be temporarily diminished for some customers.
“You don’t want to dwell on doomsday scenarios,” Fischmann said, alluding to how uncomfortable that topic is for PNM.
Fallgren said PNM practices for scenarios, such as brownouts, have detailed procedures to handle them and prioritize power for places such as hospitals.
PNM has contracts with companies to provide solar panels and other elements to replace the energy lost with the anticipated closure of the coal-fueled, polluting San Juan Generating Station.
But PNM said the coronavirus pandemic has had a profound impact on supplies, such as microchips and steel. The companies expected to build solar facilities have warned PNM that they most likely will not be ready by June 2022.
PNM spokesman Ray Sandoval said later that his company generally has a 2,000-megawatt system with about 500 megawatts provided by the San Juan Generating Station.
PNM did not name specific companies involved in the solar projects, but three listed in paperwork filed with the commission are Photosol Development US, 8minute Solar Energy and Clearway Energy. It’s not clear what role or projects each of those would be responsible for.
Darnell said one solar-project developer “began stepping out of the process” entirely. PNM has named three solar replacement projects Rockmont, Arroyo and San Juan.
Fallgren said PNM expects to have a 5 percent cushion of electrical energy to use next summer, which he said falls well short of PNM’s preferred 13 percent to 18 percent cushions.
“So what are your options?” asked Commissioner Cynthia Hall of Santa Fe.
“We are looking at any and all options. ... And we continue to beat the bushes, so to say, for other opportunities as well,” said Fallgren, PNM vice president of generation.
“Am I concerned? Yes. Do I lose sleep over it? Yes. Can we solve it? Yes.”
PNM intends to abandon coal-burning plants such as San Juan and Four Corners Power Plant, both in northwestern New Mexico. The plants are aging and don’t fit the plan to move toward renewable energy such as solar and wind.
Asked by Commissioner Joseph Maestas what the delays mean for closure of San Juan, Fallgren said contractual and regulatory matters would complicate moving the closure back.
“Not that we would take any option off the table,” he said.
Darnell, PNM senior vice president for public policy, said his company issued two requests for proposals for replacement power to fill the gap next summer.
The responses were few, inadequate and haven’t changed the outlook for a shortfall, he said. This shows “how tight the current markets are becoming in the West,” he said.
Fischmann said the pandemic has been so problematic for the industry that he wasn’t surprised by this problem.
He said he appreciated what a delicate communication challenge it is. But he said it might be wise to get ahead of it instead of surprising customers with it.