Solar projects running late to fill summer 2022 energy demand

Jul. 24—Public Service Company of New Mexico reported this week it has hit a snag in its plan to replace energy from the San Juan Generating Station when the plant closes in June.

Documents and letters filed with the state Public Regulation Commission say PNM contracted with one or more companies to build facilities to supply solar energy by the time the coal-fired San Juan plant in northwestern New Mexico closes. But the companies now expect to finish at least three projects late and could miss the peak summer electricity usage season next year.

Companies named in the reports include Photosol Development US, Clearway Energy and 8minute Solar Energy.

Clearway referred questions to Photosol, but that company declined to comment.

Photosol said in a July 16 letter to PNM it hoped to move the guaranteed operations start date on one or more projects to June 10, 2023.

8minute said in an email one of its projects "is a testament to New Mexico's vast potential for solar" and that such projects "will supplant the state's retiring coal plants."

The statement said even though the operational date of the project has been moved back, "we are continuing to work alongside our trusted partners at PNM to help New Mexico reach its 100% clean electricity goals."

PNM and others say global supply problems related to the coronavirus pandemic have slowed many industries and companies in their efforts to obtain semiconductor chips, steel, aluminum and other products for construction and manufacturing.

The automobile industry, for instance, has been hit hard by the shortage of semiconductor chips.

Ron Darnell, a senior vice president with PNM, said Friday his company will find solutions.

"We are not running out of power," Darnell said. "It is not something to be alarmed about."

PNM is expected to discuss the matter Wednesday with the Public Regulation Commission.

PNM is the majority owner of the San Juan Generating Station. Another company called Enchant Energy has talked about turning the plant into one that uses carbon capture technology.

Commission Chairman Stephen Fischmann of Las Cruces said, "We'll look at all of the options to be sure to fill in and be sure all of the power is there" next summer.

"I wasn't at all surprised by this, quite honestly," he added.

Mike Eisenfeld of the San Juan Citizens Alliance said Friday this is no reason to stretch out the life of the polluting San Juan Generating Station.

This is a period of transition in the world of electric power, Eisenfeld said, and the challenges shouldn't slow the conversion.

"It's a good plan," he said of the move toward renewable energy. "I think it's something that PNM should be able to navigate."

San Juan Citizens Alliance is an environmental group that focuses mainly on issues in New Mexico and Colorado.

Unlike Fischmann, Commissioner Joseph Maestas of Santa Fe said he was concerned about the situation. "Will it delay the closure?" he asked. "I need to know what the consequences are."

Paperwork filed with the commission showed concern on PNM's part, too. "PNM's existing resources, including available reserves, may be insufficient for peak period reliability" next summer, the company wrote in a filing with the commission this week.

The shortfall "would decrease in subsequent months as some of the projects begin to bring their resources online in stages," PNM wrote.

With regard to one of the projects, PNM mentioned a delay and "potential default."

Fischmann said he was glad PNM has recognized the challenges early.

"At this point, I don't see any reason for anyone to panic," Fischmann said. "We've got some time to deal with this."