Are utilities ready to serve summer energy needs?

May 12—As temperatures creep up and New Mexicans get ready to crank up their air conditioning, the state's electricity providers need to get ready for the busiest energy time of year.

Utilities are hoping this summer's heat doesn't drag on as long as record-breaking lengths in 2023.

Two major utilities that serve New Mexico also serve areas in Texas — El Paso Electric and Southwestern Public Service Company. The electricity companies are coming off a summer last year during which triple-digit temperatures in Texas continued for 45 days, making it the second-hottest summer ever in the neighboring state.

James Schichtl, EPE's vice president of regulatory operations and resource strategy, said those issues could come up again this year.

"It's one thing to be prepared for your forecast at peak demand. It's another thing to be able to serve something that's much higher than your forecasted peak demand," Schichtl said.

To ensure the utilities are ready for what New Mexico Public Regulation Commissioner Pat O'Connell said is the peak season for electricity usage, the three investor-owned utilities that operate New Mexico spoke about their preparation measures for the expected increased usage at an April PRC meeting.

The utilities' forecasts seem brighter than those for last year's excessively hot summer.

"Sounds like a lot more optimism heading into the summer than we heard a year ago," O'Connell said.


The Public Service Company of New Mexico is the largest utility provider in New Mexico, serving more than 525,000 customers in Albuquerque, Santa Fe, Las Vegas and some areas in the southern part of the state.

Brent Heffington, managing director of generation, said PNM is prepared to meet its peak load this summer. He said the peak load hour will be around 6 p.m. or 7 p.m. on days in July, and energy usage will add up to 2,054 megawatts. That's slightly less than the peak PNM set last year.

PNM reports that 200 megawatts of power is enough electricity to power 73,000 average-sized New Mexico residences in a year, meaning one megawatt is enough to power 365 homes.

"PNM has confidence we can meet the peak load requirements and manage our reliability commitments," Heffington said.

He said PNM found in previous analyses the company wasn't projected to meet this summer's peak hour energy needs, so the utility added another 150 megawatts for July and 100 megawatts for August in energy products. He said the utility will also have 312 megawatts more of battery storage this year that wasn't online in 2023.

He said the utility is ready to meet the 2024 peak load with resources made up of nuclear, coal, natural gas, solar, wind, demand response, purchased power, batteries and geothermal energy sources.

Summer fuel costs look to be reasonable, Heffington said, though prices can vary because of things like supply and demand.


EPE is the large service provider for Las Cruces and serves about 460,000 customers in New Mexico and Texas.

Daniel Bell is the manager of energy resources at the utility. He said EPE anticipates the highest amount of electricity usage during its busiest energy hour of the day in the summer — 5 p.m. to 6 p.m. — will be 2,338 megawatts.

He said EPE has a 7% contingency reserve in place.

Bell said the utility will use solar, gas, nuclear, purchased power and battery energy to fulfill energy needs.

EPE's summer peak demand this year is forecasted to be lower than 2023, Bell said.

"All of our weather forecasts are correcting for that summer that is once in 30 years," he said.

Commissioner James Ellison asked what the company's plans are if there's another unexpectedly hot summer. Bell said EPE has a significant amount of import capability — energy transfers and imports from generation stations.

Bell said energy imports helped the company get through summer 2023.

"There are opportunities for us to import more power should our load increase because of another unprecedented summer or because of any unexpected forced outages on the generation side," Bell said.

Like PNM's forecasts, he said current gas prices look good, but that can change with things like weather occurrences, from heat waves to hurricanes.

In addition to climate change affecting weather, regulatory Operations Vice President Schichtl said the clean energy transition and New Mexico's standard of 100% renewables by 2045, which EPE is also trying to achieve in Texas, plays a role, too. He questioned what the role of gas in the transition is and said New Mexico will need more battery storage.

"That's going to be a big consideration for us as well that complicates things," he said.


SPS, a subsidiary of Xcel Energy, serves about 126,000 customers in southeastern New Mexico in addition to its Texas Panhandle customers. SPS is different from the other two investor-owned utilities because it's part of the Southwest Power Pool, a regional transmission organization that sets resource adequacy rules for SPS.

Xcel Energy director of Resource Planning Ben Elsey explained this in EPE's presentation to the PRC.

Elsey said the anticipated summer peak demand is just under 4,400 megawatts. In response to Ellison asking how the company is prepared for a very hot summer, Elsey said the utility has 176 megawatts of additional capacity and import capability of about 1,400 megawatts across the Southwest Power Pool.

Southwest Power Pool's planning reserve margin is 15%, which adds up to another 684 megawatts SPS needs to have ready.

Elsey said as SPS serves the Permian Basin, it occasionally sees extremely low gas prices when excess gas is produced, but prices are usually in line with what other utilities see. Like the other utilities, he said factors like renewable energy production, weather and environmental compliance costs can increase prices.