Public Service Company of New Mexico is seeking to replace 114 MW of leased capacity at the Palo Verde Generating Station, a nuclear power plant near Phoenix operated by Arizona Public Service, with a combination of solar and storage resources.

The utility in an April 2 filing to the New Mexico Public Regulation Commission applied for the decertification and abandonment of its Palo Verde assets and approval to replace them with the new resources. The solar and storage would come through 20-year power-purchase agreements for 300 MW of solar and 150 MW of battery storage at Atrisco Solar; 150 MW of solar and 40 MW of storage at Jicarilla Solar at $14.89 per MWh; and a 20-year stand-alone energy storage agreement for 100 MW of battery storage at Sandia Peak [21-00083-UT].

"These projects were selected to support a reliable system and meet customer needs in 2023 at the lowest feasible cost for customers," Mark Fenton, executive director of regulatory policy and case management for PNM, said in the filing.

Fenton in written testimony said the utility considered the commission's decision to replace PNM's resources at the coal-fired San Juan Generating Station, scheduled to close in 2022, with an all-renewable and storage portfolio. This was chosen over PNM's proposed San Juan replacement portfolio, which included new natural gas generation resources. "The chosen resources represent the lowest reasonable cost carbon free resources among the competitively bid projects for those resource types," Fenton said, referencing the provisions of the state's 2019 Energy Transition Act.

A regulatory decision on the application is expected by Oct. 1.

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Associate Editor - California Energy Markets

Abigail Sawyer grew up in northwestern New Mexico near two massive coal-fired power plants. She spent many hours gazing out the car window at transmission lines on family road trips across the Southwest and now reports on the region from San Francisco.