Public Service Company Of New Mexico · OTC:PNMXO
Public Service Company Of New Mexico — Corporate Update (November 2022)
33 slides from Public Service Company Of New Mexico's corporate update, Nov 2, 2022
Slide 1: PNM 2023-2042 IRP: Commodity & Pricing Forecasts
PNM 2023-2042 IRP: Commodity & Pricing Forecasts STEERING MEETING #8 NOVEMBER 2, 2022
Slide 2: Disclosure Regarding Forward Looking Statements
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS The information provided in this presentation contains scenario planning assumptions to assist in the Integrated Resource Plan public process and should not be considered statements of the company’s actual plans. Any assumptions and projections contain
Slide 3: Meeting Ground Rules
MEETING GROUND RULES THE FOCUS OF THE MEETING IS THE DEVELOPMENT OF THE 2023 IRP • Questions and comments are welcome – One Person Speaks at a Time 01 • Reminder; today’s presentation is not PNM’s plan or a financial forecast, it is an illustration of the IRP process 02 • When asking a question, ple
Slide 4: Technical Session
TECHNICAL SESSION THE FOCUS OF THE MEETING IS THE DEVELOPMENT OF THE 2023 IRP The technical sessions are about discussing the advantages and disadvantages regarding the application of different technical methodologies within the IRP modeling framework. We are not here to focus on the results or driv
Slide 5: Meeting Agenda
MEETING AGENDA • Welcome and Introductions • Siemens forecasts • Natural Gas & CO2 • Capital Costs • IRP application of Siemens forecast • Scenario Process • Next Steps SL IDE 5 | NO VEM BER 2 , 2 0 2 2
Slide 6: Price Outlook: Natural Gas, CO2, Capital Costs
Price Outlook: Natural Gas, CO2, Capital Costs Public Service New Mexico November 2022 © Siemens 2022
Slide 7: Contents
Contents • Introduction • Tools and Methodology • Base Case Scenario Assumptions and Forecasts • High and Low Scenario Assumptions and Forecasts Page 7 © Siemens 2022
Slide 8: Introduction
Introduction • Siemens PTI developed market assumptions for PNM in July 2022 • Market forecast of natural gas, carbon emission price, and capital costs were developed to assist PNM with its 2023 Integrated Resource Plan • The forecast for each of these commodities was developed based on input from s
Slide 9: Tools and Methodology
Tools and Methodology SIEMENS
Slide 10: Gas and Power Integrated Modeling Approach
Gas and Power Integrated Modeling Approach AURORAxmp® as a Modeling Framework GPCM Modeling Framework ▪ Power modeling used AURORAxmp®, an hourly dispatch model, to simulate the economic dispatch of power plants within WECC power markets for the forecast horizon. AURORAxmp® assesses the economics of
Slide 11: Natural Gas Forecast
Natural Gas Forecast SIEMENS
Slide 12: Key U.S. Gas Market Drivers
Key U.S. Gas Market Drivers All units in BCF/D U.S. (L48) Gas Supply Outlook U.S. Gas Demand Outlook 140 140 120 120 100 100 80 80 60 60 40 40 20 20 0 0 Conv Gulf Coast Appalachia Permian Midcontinent Residential Commericial Industrial Electric Power Rockies/Dakotas Southwest Other Canada P/L LNG Ex
Slide 13: Several Pipelines Built to Deliver Permian Gas from Waha Hub
Several Pipelines have been built to delivery Permian Gas from Waha Hub to South Texas and Beyond • Permian gas production is expected to increase from ~15 Bcf/d in 2022 to ~20 Bcf/d by 2030 • Gas pipeline takeaway capacity is expected to reach ~17 Bcf/d by YE2023 • Expansion projects being develope
Slide 14: Baseline Natural Gas Prices – Henry Hub (HH)
Baseline Natural Gas Prices – Henry Hub (HH) Henry Hub Baseline HH Natural Gas Price Forecast (2021$/MMBtu) Near-Term – Reflects historical data and market forwards through September 2023. The next 18 months is a blend of $7 forwards and fundamental through February 2025 • Oil and gas prices are hig
Slide 15: Baseline Natural Gas Prices – Permian and San Juan
Baseline Natural Gas Prices – Permian and San Juan Baseline Regional Natural Gas Price Forecasts, $2021/MMBtu Permian • Permian production is robust and continues to grow $7 even with very low HH prices $6 • Near term, Permian prices are expected to have a negative basis of ~0.35 $/MMBtu to HH $5 •
Slide 16: High and Low Cases
High and Low Cases SIEMENS
Slide 17: Natural Gas Price Scenarios – Henry Hub
Natural Gas Price Scenarios – Henry Hub HH Natural Gas Price Scenarios, $2021/MMBtu Henry Hub Low and High Cases $9 Low Case –Reflects an outlook based on a $8 statistical analysis of historical at the 10% $7 confidence internal. Prices settle around $6 $3/MMBtu longer term $5 $4 High Case – Reflect
Slide 18: Natural Gas Price Scenarios – Permian and San Juan
Natural Gas Price Scenarios – Permian and San Juan Permian and San Juan Natural Gas Price Scenarios, $2021/MMBtu $8 • Permian and San Juan price outlook $7 consistent with HH High and Low $6 scenario and basis differential $5 consistent with baseline scenario $4 $3 • Low case prices above $2/MMBtu l
Slide 19: Carbon Price Scenarios – Federal
Carbon Price Scenarios – Federal • Range of federal carbon prices reflects uncertain U.S. Carbon Price Scenarios outlook for carbon policy and resulting pricing in western states Federal CO2 Price Scenarios, 2021$/Ton 80 • Baseline scenario assumes a carbon policy 70 starting in 2025 to achieve 80%
Slide 20: Capital Cost Forecast
Capital Cost Forecast Regional factors developed for each technology to account for Overnight capital cost forecast for difference in locality and ambient various technologies developed conditions. Regional factors are based on numerous sources based on EIA Annual Energy Outlook Near term capital co
Slide 21: Capital Cost Forecast for Select Technologies
Capital cost forecast for select technologies incorporates regional factors to build in New Mexico *Costs outlook does not reflect incentives provided by the Inflation Reduction Act 2022 Combustion Turbine - $2021/kW Solar PV Tracking - $2021/kW 1,800 1,800 1,600 1,600 1,400 1,400 1,200 1,200 1,000
Slide 22: Contact
© Siemens 2022 Contact Anuj Patel Holt Bradshaw Angelina Martinez Principal Principal Project Director Mobile: (281) 939-2144 Email: Anuj@siemens.com Email: Holt.Bradshaw@siemens.com Email: Angelina.Martinez@siemens.com Pag e 22
Slide 23: 2023 IRP Application of Siemens Forecasts
2023 IRP APPLICATION OF SIEMENS FORECASTS DELIVERED NATURAL GAS PRICES USED IN THE 2023 IRP San Juan Basin Basin Pricing (Siemens Forecast) 2 Pricing Hubs Transportation Charges, Usage Charges, Taxes 4 Pricing locations Delivered Price Permian 4 Delivered Price Curves Source: Transwestern Pipeline C
Slide 24: Examples for Delivered Natural Gas Pricing
2023 IRP APPLICATION OF NATURAL GAS FORECAST EXAMPLES FOR DELIVERED NATURAL GAS PRICING Delivered Gas Pricing NOMINAL ($/MMBtu) Delivered Gas Pricing NOMINAL ($/MMBtu) $13.00 $13.00 $12.00 $12.00 $11.00 $11.00 $10.00 $10.00 $9.00 $9.00 $8.00 $8.00 $/MMBtu $/MMBtu $7.00 $7.00 $6.00 $6.00 $5.00 $5.00
Slide 25: CO2 Pricing Forecast
2023 IRP APPLICATION OF SIEMENS FORECASTS CO2 PRICING FORECAST Seimens Pricing We are here Forecasts 8, 20, 40 Carbon Rule Internal Discussion/Review Steps to be completed Adjust Forecast (if needed) SL IDE 2 5 | NO VEM BER 2 , 2 0 2 2
Slide 26: Candidate Resource Pricing
2023 IRP APPLICATION OF SIEMENS FORECASTS CANDIDATE RESOURCE PRICING We are here Baseline • Siemens Resource Pricing Review •Review RFP responses Market Intel Steps to be Adjust •Adjust the baseline curves (if applicable) using RFP responses completed baseline • Review transmission requirements by A
Slide 27: IRP Development Cycle Status Check
IRP DEVELOPMENT CYCLE STATUS CHECK Here is where we Next are now Phase Review Results Regulatory Gather Data, Perform Initiate Public with Public Review and Define Modeling and Advisory Process Advisory Group Acceptance of Assumptions Analysis and file IRP IRP SL IDE 2 7 | NO VEM BER 2 , 2 0 2 2
Slide 28: Modeling Scenarios
MODELING SCENARIOS SCENARIO BUILDING – 2023 IRP A future A scenario consists of a set A sensitivity describes of forecasts describes a Scenario Future Sensitivity change in a potential key that describe single element decisions the state of the of a given future world Scenarios will allow for IRP to
Slide 29: Scenario Framework
SCENARIO FRAMEWORK Scenarios Perform Modeling and Analysis Futures Sensitivities SON/MCEP/AP A set of core scenarios Analysis of scenarios Stress testing of Evaluation of all that describe key under a range of scenarios under scenarios, sensitivities decisions likely futures specified futures and tr
Slide 30: Near Term Schedule
NEAR TERM SCHEDULE FUTURE MEETING TIME & LOCATION When: November 16, 2022 Topic: Public Advisory Steering Meeting #9: Modeling Inputs #2: Load Forecast/EE Forecast, EE Bundles & Scenarios Start Time: 9:00 AM Location: Virtual When: December 13, 2022 Topic: Public Advisory Steering Meeting #10: Model
Slide 31: Next Meeting
NEXT MEETING We encourage you to send in your thoughts ahead of time to IRP@pnm.com so that we can summarize them and distribute them for the next meeting. Please have your submissions in by November 11, 2022. SL IDE 3 1 | NO VEM BER 2 , 2 0 2 2
Slide 32: Make Sure We Have Up to Date Contact Information for You
MAKE SURE WE HAVE UP TO DATE CONTACT INFORMATION FOR YOU www.pnm.com/irp for documents IRP@pnm.com for e-mails Register your email on sign-in sheets to receive alerts of upcoming meetings and notices that we have posted to the website. SL IDE 3 2 | NO VEM BER 2 , 2 0 2 2
Slide 33: Thank you
Thank you pr aio OO@
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