- The New Mexico Public Regulatory Commission approved on Wednesday one solar and one solar-plus-storage project to serve El Paso Electric’s customers.
- The projects were proposed to serve southern New Mexico and west Texas customers, and start service in the summer of 2022. One project will add 100 MW of solar for $0.015 per kWh while the second will add 100 MW of solar and 50 MW of storage for $0.021 per kWh, record-low prices for solar and storage in New Mexico.
- The PPAs mark the first time El Paso Electric uses large-scale battery storage in the state, replacing 91 MW of capacity from two units at the Rio Grande natural gas steam turbine plant, set for retirement in 2022.
El Paso Electric set out to grow its renewable resources to comply with New Mexico’s Renewable Portfolio Standard (RPS), requiring 20% of the utility’s retail energy sales to come from renewable energy by 2020.
In 2019, the state legislature approved a carbon-free by 2045 goal, steering power suppliers in the state away from fossil fuel-fired resources.
El Paso Electric also wants to spend $157.6 million to add a 228 MW natural gas unit to its Texas-based Newman Power Station, which has two units set to retire in 2022 totaling 152 MW, according to the Energy Information Administration.
The utility presented the pricing for three PPAs last November, setting out fulfill its obligations under the New Mexico RPS standards, but one project was rejected by regulators.
| Project Name | Solar | Storage | Location | Price |
|---|---|---|---|---|
| Hecate | 100 MW | N/A | Santa Teresa, New Mexico | $14.99/MWh |
| Buena Vista | 100 MW | 50 MW | Otero County, New Mexico | $20.99/MWh + $5.46/kW capacity charge |
| Canutillo | N/A | 50 MW | Canutillo, Texas | $6.94/kW + $18/MW maintenance costs |
The Canutillo project that was rejected came at much higher pricing than the other project that offered energy storage, and would have been in service by the summer of 2023. In addition, the project was located in Texas, although the utility planned to serve both New Mexico and Texas customers with that power.
El Paso Electric will receive renewable energy credits bundled with the purchase of solar energy for the two projects approved.
Cost is a key consideration in any state’s clean energy transition, and the pricing of the Hecate solar project is notably low by national standards.
“The low prices are noteworthy, particularly $14.99 per megawatt-hour for the Hecate project,” said Coalition for Clean Affordable Energy attorney Stephanie Dzur.
