September 10, 2008
PNM, Key Parties Reach Agreement to Add New Resources to Serve Growing Customer Energy Needs
ALBUQUERQUE, N.M., Sept. 10 /PRNewswire/ -- PNM and several key parties today filed an agreement with state regulators that, if approved, would allow the utility to add two existing, natural gas-fired power plants to its energy portfolio to serve the growing needs of its electric customers. The plants are part of a planned portfolio of resources that balances reliability, cost to customers and environmental impact.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080811/PNMLOGO)"To meet our number one commitment to customers -- reliable service -- we need to add additional generation, and we are committed to doing so in a way that is clean and affordable," said Pat Vincent-Collawn, PNM Resources president and chief operating officer. PNM estimates that adding the two plants to its energy portfolio, rather than building two new plants, will save customers an estimated $144 million over the next 20 years.
The agreement is supported by N.M. Public Regulation Commission staff, the state Attorney General's Office, the Coalition for Clean Affordable Energy and the City of Albuquerque.
For the past year, members of the public have helped PNM develop an integrated resource plan that calls for more renewable energy, more aggressive energy efficiency efforts and the resource additions outlined in the agreement filed today. The public process considered a variety of factors, including future natural gas price volatility and the potential for greenhouse gas legislation, as it considered various resource options. The plan will be filed with the PRC on Sept. 16.
Under the terms of the agreement filed today, PNM would operate two clean-burning, gas-fired power plants in southern New Mexico -- Luna Energy Facility, near Deming, N.M., and Lordsburg Generating Station, in Lordsburg, N.M. -- to serve the electric needs of PNM residential and business customers. The two plants currently serve PNM wholesale customers, are strategically located to provide energy to PNM customers and have an excellent record of service. Together, they can provide 270 megawatts of electricity, or enough energy to power 189,000 average-sized New Mexico homes.
The agreement also would allow PNM to recover the cost of purchasing power from an existing 145 megawatt, gas-fired power plant in Valencia County and to purchase 30 megawatts of capacity at Palo Verde Nuclear Generating Station that the company currently leases. Owning the Palo Verde capacity ensures PNM will continue to have access to the carbon-free source of power after the current lease expires in 2016 -- and at a cost dramatically lower than building similar nuclear capacity today. PNM estimates purchasing the capacity will save customers about $22 million over the expected remaining life of the plant, compared to continuing to lease the capacity.
PNM needs new capacity in the next several years to: -- meet growing electric demand on PNM's system, which outpaces the nation, -- replace current purchase-power agreements that expire by 2011, and -- maintain an adequate reserve of power for emergencies.
PNM later this month will propose new electric rates that include the generation resources addressed in the agreement as well as several other costs, including a major environmental upgrade at the company's coal-fired San Juan Generating Station near Farmington, N.M. Current PNM rates will not change until a regulatory review process concludes some time in summer 2009.
To learn more about PNM's electric integrated resource plan, visit http://www.pnm.com/irp.
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CONTACT: Susan Sponar of PNM, +1-505-241-2768, or Cell, +1-505-249-0197,firstname.lastname@example.org
Web site: http://www.pnm.com/irp