By New Mexico Business Weekly

Public Service Co. of New Mexico is asking the New Mexico Public Regulation Commission to waive a state requirement that the utility obtain 10 percent of its electricity from renewable sources in 2012.

The utility said it canâ¿¿t meet the mandate, contained in the stateâ¿¿s renewable portfolio standard (RPS), without exceeding a cost threshold set by the PRC, which aims to moderate the cost to consumers when utilities use more renewable resources.

The threshold sets a maximum 2 percent increase for renewable generation on customersâ¿¿ bills in 2011. The threshold will climb to 3 percent by 2015, beginning with a rise to 2.25 percent in 2012.

The waiver request is part of an updated renewable energy procurement plan for 2011, which PNM filed in December.

PNM spokesperson Cathy Garber said the utility will meet the 10 percent renewables requirement this year because itâ¿¿s purchasing about $5.5 million in extra wind energy from generating facilities run by other companies, in addition to solar energy it will bring onto the system.

The company plans to build 45 megawatts of solar generation in 2011 and 2012, including utility-owned solar photovoltaic facilities and rooftop solar installations established by customers with subsidies from PNM.

With the additional $5.5 million PNM is spending on wind energy this year, it will get more than 10 percent of its energy from renewable sources. But if the company purchases more wind next year, it will push the impact on customers above the 2.25 percent threshold, Garber said. And without more wind energy, renewables will only account for 7.4 percent of PNMâ¿¿s electricity in 2012.

⿿We⿿re asking to waive meeting the RPS requirement in 2012, because we won⿿t have the money to buy more wind resources,⿝ Garber said.

Part of the problem is that the cost for solar buildouts will rise from $14 million in 2011 to about $16 million in 2012 as more systems come online, Garber said. In addition, the utility would have to spend between $3.3 million and $6.6 million on wind generation to meet the 10 percent renewable mandate.

Parties that want to intervene in the PRC case must do so by Feb. 8. Public hearings at the PRC are scheduled to begin April 1.

Commissioner Jason Marks said the PRC needs to assess in hearings whether PNM⿿s request is ⿿reasonable.⿝ Southwestern Public Service Co., which serves customers in southeast New Mexico and West Texas, also asked for extra time to meet the 10 percent standard in its renewable procurement plan.

⿿The utility must make a reasonable effort to meet the RPS requirement,⿝ Marks said. ⿿We⿿ll look closely at whether PNM is doing everything reasonably possible. If so, it⿿s entitled to a variance, but if there are alternatives that can bring them closer to the RPS, then we could order them to do those things.⿝

Copyright 2011 American City Business Journals

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