ENERGY
PNM is charting a path to 100% clean energy. It’s not a straight line.
Utility’s updated resource plan leans on wind and solar — and old gas plants
In Albuquerque, the Reeves Generating Station has been producing electricity for 68 years. The natural gas plant is an old, noisy workhorse — and one of the few fossil fuel assets remaining on Public Service Company of New Mexico’s electric grid.
As PNM transitions away from fossil-fueled power, Reeves and other natural gas plants are among the most important generators in the utility’s fleet, PNM officials say. The gas turbines run essentially around the clock in the summer, when the electric load peaks.
PNM’s solar and wind plants generate plenty of electricity during the day for the utility’s 556,358 customers. PNM’s employees at natural gas plants such as Reeves, though, often work night shifts.
“We don’t have enough renewables to carry the nighttime hours,” Omni Warner, senior vice president of PNM operations, said from inside an office connected to the Rio Bravo Generating Station, also in Albuquerque. “We lean on our thermal fleet to cover the generation for customers during the nighttime hours. That’s the only way we can serve.”
But the exhaust stacks and imposing steel frames of PNM’s gas fleet could go the way of New Mexico’s coal plants. In August 2024, PNM demolished the coal-fired San Juan Generating Station, after nearly a half century of operations. A 2031 PNM exit from the Four Corners Power Plant — a coal plant on the Navajo Nation— will lead to the loss of 200 megawatts of power generation.
Originally, PNM planned to retire Reeves at the end of its depreciable life in 2030. But in its latest integrated resource plan, filed with the state Public Regulation Commission on Sept. 1, PNM proposed to continue operations at Reeves through 2044 — the year before Gov. Michelle Lujan Grisham’s signature climate law, the 2019 Energy Transition Act, mandates that investor-owned utilities transition to 100% carbon-free power. The 149-megawatt Rio Bravo plant is also slated for retirement by 2044.
PNM’s September filing — an update to a 2023 plan — shows how the electric grid will transform by 2045. Since 2023, PNM says it has added or obtained regulatory approval for 1,585 megawatts of new generators and batteries. For perspective, that is 77% of PNM’s 2025 peak load of 2,053 megawatts.
From 2029-2032, PNM wants to incorporate 800 megawatts of new wind energy; 240 megawatts of new solar energy; 610 megawatts of new battery storage facilities; and 40 megawatts of new natural gas generators — which will be an expansion of the existing La Luz Energy Center, a 41-megawatt natural gas plant in Valencia County, which was placed in service in 2016 and serves Albuquerque’s load pocket.
The plan said Reeves, which has a capacity of nearly 150 megawatts, “continues to play a critical role in supporting transmission reliability on PNM’s system, particularly in the Albuquerque load pocket.”
As firm, dispatchable fossil fuel plants close, PNM and utilities across the state are turning to battery storage. In August, at PNM’s Sandia Energy Center, a new 60-megawatt battery storage facility in Albuquerque, Christian Reeves, PNM’s senior manager of generation construction and joint projects, said the batteries have been charging off the power grid all day. At around 5 p.m., the batteries will begin discharging, he said.
“We don’t actually generate any power here,” Reeves said. “All we’re doing here is saving the power from the wind power, from the solar and anything else.”
He added, “That’s the thing about PNM now is that we’re pretty much built out for solar and wind. We have plenty of power on sunny days like this.”
But PNM and other utilities will struggle to power the grid with just wind, solar and batteries. By 2045, PNM forecasts that its peak load will be somewhere between 2,800 megawatts and 6,400 megawatts, according to its plan. The lower number is under a low economic development scenario. The higher figure is under “extreme” economic development, the plan says.
Like others, PNM is waiting for commercial geothermal power plants. Hydrogen could also provide a cleaner fuel for its natural gas plants. And PNM still gets power from the Palo Verde nuclear plant, located in Maricopa County, Arizona.
The energy transition, however, could result in rate changes of up to an additional 10 cents per kilowatt-hour by 2036, on top of what customers are already paying. That’s according to Lisa Goodman, vice president for investor and community relations at PNM. The average residential customer uses 600 kilowatt-hours per month. So an additional dime per kilowatt-hour would represent an additional $60 to the average monthly residential bill over the next 10 years.
In an email, Goodman wrote that “the energy transition requires a significant amount of investment in the grid, but the resulting impact to customer costs may be tempered with additional customer load.” In other words, if PNM adds more customers, costs for everyone could decrease.
Potential rate hikes could be, on an annual percentage basis, “lower than the forecasted rate of inflation,” Goodman said.
“PNM remains firmly committed to New Mexico’s Energy Transition Act and its state-mandated goal for carbon-free energy by 2045,” she said.
Justin Horwath covers tech and energy for the Journal. You can reach him at jhorwath@abqjournal.com.