Categories
Coal, Oil, Natural Gas Domestic Policy Economy Energy & Environment Energy Economics Government Regulation Infrastructure & Technology New Mexico Nuclear Energy Renewable Energy Top Issues Trade

Looming Energy Crisis Exacerbated By Nuclear Energy Exit And Solar Supply Crunch

Regulators blame the utility, and the utility blames the supply chain. Is anyone blaming the legislation?

The New Mexico Energy Transition Act (ETA) was signed by Governor Michelle Lujan Grisham in 2019. The ETA sets a statewide renewable energy standard of 50 percent by 2030, 80 percent by 2040, and zero-carbon resources by 2045.

In February 2022, Public Service Company of New Mexico (PNM), the state’s largest utility company, announced that there will not be enough power in July and August to meet peak consumer demand. There were warnings of potential rolling blackouts as early as this summer but also stretching to the summer of 2023.

The ETA mandates are driving PNM to replace existing non-renewable generation sources with renewables. This explains the imminent shutdown of the San Juan generating station, an aging coal-fired plant, and PNM’s exit from the Palo Verde nuclear plant in Arizona.

New Mexico’s Public Regulation Commission (PRC) is being blamed by PNM, saying that commissioners are delaying approval of replacement resources. Conversely, the PRC places responsibility with PNM for not promptly submitting replacement proposals for evaluation and approval by the PRC.

In a desperate move, PNM delayed the closure of San Juan by three months, closing the gap for peak summer demand. But long-term supply chain troubles have crippled PNM’s ability to deploy solar projects in time to meet projected demand by next summer.

PNM blames the PRC, the PRC blames PNM and PNM cites supply chain woes while nobody is pointing fingers at the Energy Transition Act.

In PNM’s announcement of the Palo Verde nuclear lease exit, the company cites the ETA as the prime driver behind their decision to exit interests in the nuclear facility. PNM Resources’ chairman, president and CEO Pat Vincent-Collawn says the decision “demonstrates another way that we are optimizing PNM’s portfolio to deliver additional low-cost renewables to customers.”

Considering the looming energy crisis with very real and fast-approaching deadlines to solve the problem, why is PNM not considering long-term reliable solutions?

The United States Department of Energy acknowledges the importance played by nuclear power. “It has roughly supplied a fifth of America‚Äôs power each year since 1990,” says Mike Mueller of the Office of Energy Efficiency & Renewable Energy.

Renewable plants are intermittent or variable, determined mostly by a lack of fuel (wind, water, sunshine, etc.). These plants need backup power like battery storage. Or, they can be paired with reliable generation like nuclear energy. While nuclear might not be considered “renewable” by New Mexico standards, it is considered a zero-emissions clean energy source by DOE.

With higher capacity factors than any other sources and higher reliability, PNM needs less Band-Aids like extending the life of San Juan’s coal-fired plant and more real long-term solutions found in deploying nuclear power.

Recent polling data shows that over 69 percent of New Mexicans are unsure about or do not support the ETA.

PNM’s short-sightedness coupled with pressures by Michelle Lujan Grisham’s California-imported energy policy will undoubtedly negatively impact thousands of New Mexicans as early as next summer. If the 2021 Texas energy crisis is any indication of the dangers of power unreliability, New Mexicans must be losing sleep at night.

By Patrick M. Brenner

Patrick Brenner is the founder and president of the Southwest Public Policy Institute, a limited-government research institute and think tank focused on the southwestern United States. An advocate for open government, he leads the institute's government transparency and accountability efforts.

Leave a Reply

Your email address will not be published.