About the Four Scenarios

PNM became the nation’s first U.S. owned investor-owned utility to announce a goal of zero-emission by 2040. We’re doing this through an innovative approach to replace coal-fired generation with renewable resources such as wind and solar energy, along with new flexible natural gas and cutting-edge battery storage technologies. While we must provide just one solution, we’ve decided to present different scenarios to reach this goal. Through this, we can significantly increase environmental benefits and continue to change the way utilities do business, all while providing reliable and affordable green power to you.

On July 1, 2019, PNM filed four distinct replacement scenarios with the NM Public Regulation Commission. PNM analyzed each scenario looking at several factors such as:

  • type of generation, like solar, wind, and new flexible natural gas
  • the reliability of those generation sources working independently and together as one system
  • the dependability and magnitude of energy storage technology
  • the costs to customers
  • the flexibility of the replacement resources to meet customer demand at the hottest hour of the day

Scenario #1: Hybrid

The Hybrid plan meets rigorous reliability standards, reduces our carbon footprint, and lowers customer costs in year-one of the plan.

This plan includes a combination of new solar and wind generation, energy battery storage, and new flexible natural gas. The plan provides high reliability, low costs, and addresses environmental concerns by depreciating new flexible natural gas resources by or before 2040 so as New Mexicans, we can continue our transition to an emissions-free future.

Our exit out of coal is not an exit out of the communities we have worked and lived in for decades. Scenario one includes transitional generation within the San Juan Central Consolidated School District so that the local economies will continue to receive property taxes. The overall filing includes additional benefits for these communities and our valued employees.

The Hybrid plan also increases the total amount of renewable energy serving New Mexicans, while maintaining reliability. Additionally, it continues our path to meet the state’s required Renewable Energy Standard and achieve our goal of 100% emissions-free by 2040.

The Hybrid plan optimizes tested and proven energy battery storage technology, while leaving options to build additional battery to meet future customer needs as prices in for battery storage decline. 

New infographic reflects updates made to replacement plan scenarios as a result of miscalculations found by PNM in our modeling data.

Some of these errors were the failure to include the full cost of natural gas. When offset by other corrections, the net effect is to change the resource selection for scenario two. This change allows more renewables and less natural gas in the San Juan Location scenario.

Although these miscalculations don’t impact the recommendations in the case, they minimally reduce estimated customer savings.

Additional Scenarios

The three additional modeled scenarios address key considerations of the Energy Transition Act. Each scenario and the resulting benefits and challenges are being shared so that customers, regulators, and stakeholders can make informed decisions on New Mexico’s energy future.

Scenario #2: San Juan Location

The San Juan Location scenario includes all replacement resources built within the geographical boundaries of San Juan County. This plan includes a high penetration of new flexible natural gas to meet the energy needs of our state. 

Scenario #3: No New Fossil Fuel

This scenario requires a high capacity of energy storage to compensate for a significant solar and wind replacement plan without the addition of fossil fuel. While energy battery storage is a part of the Hybrid plan, that plan locates the storage strategically across New Mexico at a smaller capacity. The No New Fossil Fuel scenario would require battery storage to be utilized in a more condensed location and at a higher capacity.

Scenario #4: All Renewable

This scenario would replace the coal-fired generation from San Juan coal plant with renewable generation only. By excluding new flexible natural gas and energy battery storage, this plan saves the customers the least and does not meet Federal energy Regulatory Commission or North American Electric Reliability Corporation requirements placed on every utility.