Public Service Company Of New Mexico · OTC:PNMXO
Public Service Company Of New Mexico — Corporate Update (January 2023)
79 slides from Public Service Company Of New Mexico's corporate update, Jan 17, 2023
Slide 1: PNM 2023-2042 IRP Steering Meeting 10
PNM 2023-2042 IRP: AEG EE Bundles, PNM EE Program & Highlights, Astrape ELCC Study Results, Review of Summer 2022 and Market Assistance included in Resource Adequacy Modeling STEERING MEETING 10 JANUARY 17, 2023
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: EE Potential Study Stakeholder Meeting
EE Potential Study Stakeholder Meeting January 17, 2023
Slide 6: Agenda
Agenda Introductions Study Overview Energy Efficiency Potential IRP Inputs Applied Energy Group, Inc. | appliedenergygroup.com 6
Slide 7: Introductions
Introductions Kelly Marrin Len Bergman Managing Director Manager Role: Project Director Role: Project Manager Eli Morris Rob Strange Managing Director Product Manager Role: IRP Input Lead Role: Modeling Lead Fuong Nguyen Lead Analyst Role: Analysis Lead Presenter 7 Applied Energy Group, Inc. | appli
Slide 8: About AEG
About AEG Founded in 1981 | Join Ameresco 2011 AEG provides expertise, products, and insights to utilities and other agencies to solve current and future business and sustainability needs. 115 Dedicated Professionals States and provinces in 49 which we’ve worked Utility and govt. 200+ clients served
Slide 9: AEG's Market Potential Study Footprint
Midwest: Ameren Illinois* MERC Ameren Missouri* NIPSCO* Black Hills Power * Omaha Public Power District* Citizens Energy Peoples’ Gas/ North Shore Gas * Spire Missouri Regional & National: Empire District Electric * Midcontinent ISO* Indianapolis P&L* State of Michigan West: Sunflower Electric EEI/I
Slide 10: Study Objectives
There are 3 overarching objectives for the study Incorporate Key Updates from the 2019 Study • Incorporate results from the 2020 RASS that AEG completed with Itron Study • Perform limited updates to the measure list Objectives Develop New Projection of EE Potential • Align with Itron’s EE forecast a
Slide 11: Potential Study Results
Potential Study Results Applied Energy Group, Inc. | appliedenergygroup.com
Slide 12: Energy Efficiency Potential Approach
Energy Efficiency Potential Approach Market Characterization Identify and Baseline Projection Potential Estimation Characterize Measures • Customer segmentation • Efficiency equipment • Utility forecasts • Technical , Economic, and • Utility data • Retrofit opportunities • Stock turnover Achievable
Slide 13: Market Characterization
Market Characterization Key Elements and Drivers Residential Market Characterization for 2021 Market characterization is anchored to actual Single Family Miscellaneous Electronics sales and customers in study base year (2021) Multifamily Appliances Segment residential sector based on dwelling Single
Slide 14: Residential Baseline Projection
Residential Baseline Projection Projects end-use consumption in the absence Residential Electricity Projection by End Use of future program interventions 5,000 • This is the basis from which potential is estimated 4,500 Accounts for: 4,000 • Differences by sector, and segment 3,500 Cooling • Custome
Slide 15: C&I Baseline Projection
C&I Baseline Projection Commercial Electricity Projection by End Use Industrial Electricity Projection by End Use 5,000 5,000 4,500 4,500 4,000 Cooling 4,000 3,500 Space Heating Cooling 3,500 Ventilation Space Heating 3,000 3,000 Water Heating Ventilation GWh GWh 2,500 Interior Lighting 2,500 Interi
Slide 16: Measure Identification and Characterization
Measure Identification and Characterization Identify Measure Measure Study Universe of Screening Characterization Integration Measures Applicability to Previous Study Measure Source Sectors and Hierarchy Segments Energy Efficiency Potential Current Programs Fully Describe Codes and Standards Measure
Slide 17: Estimating Energy Efficiency Potential
Estimating Energy Efficiency Potential Potential is estimated by creating an alternate sales forecast incorporating efficient measure adoption and Technical Potential calculating the change from the baseline AEG will calculate five distinct levels of potential: • Technical Economic • Technical Achie
Slide 18: Potential Summary for All Sectors
Potential Summary for All Sectors Achievable Potential savings in the first year of 75 GWh, 0.8% of baseline usage. 3,500,000 Achievable Potential savings reach 11.8% of baseline 3,000,000 usage by 2042, an average of 0.6% annually 2,500,000 20-year Achievable Potential is 62% of Economic Potential
Slide 19: Comparison to Previous Study
Comparison to Previous Study In the short term, Achievable Potential savings are similar to the previous study • The previous study used a conservative growth Achievable Potential % of Baseline by Study Year rate for energy efficiency adoption, which was 14.0% an average of 0.5% linear growth 12.0%
Slide 20: Residential Potential by End Use and Segment
Residential Potential by End Use and Segment Cumulative Achievable Potential in 2042 By 2042, Electronics contribute that largest portion of savings, followed closely by Cooling and Lighting end use 2042 Residential Savings Residential Cumulative Savings Miscellaneous 4% 250,000 200,000 Cooling Cool
Slide 21: Residential Top Measures – Achievable Potential
Residential Top Measures – Achievable Potential Achievable Achievable Behavioral Programs provide the highest savings Rank Measure Potential in Potential in in 2030, followed by Central AC equipment 2025 2030 % of Total 1 Behavioral Programs 28,109 31,960 31.6% replacements 2 19.8% Central AC 9,170
Slide 22: Commercial Potential by End Use and Segment
Commercial Potential by End Use and Segment Cumulative Achievable Potential in 2042 Lighting represents the majority of savings in the Commercial sector, followed by the Cooling end use Commercial Cumulative Savings 900,000 2042 Commercial Savings Refrigeration Office Miscellaneous 800,000 4% Food E
Slide 23: Commercial Top Measures – Achievable Potential
Commercial Top Measures – Achievable Potential Achievable Achievable Linear and High-Bay Lighting continue to provide Rank Measure Potential in Potential in the most savings, including both lamps/fixtures 2025 2030 % of Total and control technologies 1 Linear Lighting 53,296 159,134 45.5% 2 High-Bay
Slide 24: Industrial Potential by End Use and Segment
Industrial Potential by End Use and Segment Cumulative Achievable Potential in 2042 Savings in the motors end use are made up of pump and fan controls, as well as Compressed Air measures Process end use savings come from Refrigeration optimization measures such as High Efficiency Compressors and Flo
Slide 25: Industrial Top Measures – Achievable Potential
Industrial Top Measures – Achievable Potential Industrial Sector Achievable Achievable Rank Measure Potential in Potential in Linear and High-Bay includes savings incorporate 2025 2030 % of Total 1 Linear Lighting 3,522 11,241 14.6% lighting control technologies 2 High-Bay Lighting 2,738 8,482 11.0%
Slide 26: IRP Inputs
IRP Inputs
Slide 27: Modeling Energy Efficiency Potential within the IRP
Modeling Energy Efficiency Potential within the IRP The EE Potential Assessment identifies the EE opportunities in PNM’s service territory through 2042 Energy efficiency measures can be considered on par with supply-side resources based on their availability, hourly impacts, cost, and life. Program
Slide 28: AEG Supply Curve Bundling Methodology
AEG Supply Curve Bundling Methodology Step 1: Calculate “achievable technical” potential, incorporating achievability rates, but not cost-effectiveness screening. Step 2. Identify measure-level incremental potential beyond statutory goals 2023 – 2025: Incremental Potential = Achievable Technical − P
Slide 29: AEG Supply Curve Bundling Methodology (Continued)
AEG Supply Curve Bundling Methodology (Continued) Step 3. Define bundles based on levelized cost of conserved energy. Levelized costs are in 2021$ Step 4. Match energy efficiency measures to resource bundles and calibrated load shapes. AEG assigned each measure in the potential study to a bundle in
Slide 30: Updated Bundle Breakpoints
Updated Bundle Breakpoints Updated bundling scheme groups more low-cost measures together and provides additional granularity in the cost range that is likely to be more marginal within the IRP model Previous Study Initial Current Study Statutory Period Post-Statutory Period 2021-2025 2026-2040 Prog
Slide 31: Annual Incremental Energy Savings per Bundle
Annual Incremental Energy Savings per Bundle 2023-2025 140 In 2023 – 2025 the average cost of the program bundle is 120 $17/MWh. Capturing almost all the potential up to $50 100 $150 and Up 2026-2042 $125 to $150 Incremental GWh 80 $100 to $125 Most of the potential still falls in the “up to $50” bu
Slide 32: Cumulative GWh by Bundle
Cumulative GWh by Bundle Cumulative Savings by average 1,600 measure life in each bundle. 1,400 1,200 $150 and Up $125 to $150 1,000 Cumulative GWh $100 to $125 $75 to $100 800 $50 to $75 Up to $50 600 $50 and Up Up to $50 400 Program Potential 200 - 2032 2034 2036 2038 2040 2023 2024 2025 2026 2027
Slide 33: Bundles by End Use
Bundles by End Use Majority of savings fall into the “Up to $50” bundle • Correlates to the Program bundle from the 2023-2025 Statutory period Residential lighting savings are a smaller portion of savings than in previous study due to new EISA backstop provision • Non-Residential lighting savings co
Slide 34: 2026 Hourly Savings by Bundle
2026 Hourly Savings by Bundle All Bundles Excluding “$Up to 50” Bundle
Slide 35: 2026 Hourly Savings by Bundle
2026 Hourly Savings by Bundle
Slide 36: Comparison to Previous Study
Comparison to Previous Study Residential Non-Residential Program Bundle Up to $50/MWh Bundle Over $50/MWh Bundle Previous Study Current Study Previous Study Current Study
Slide 37: Comments or Questions?
Comments or Questions?
Slide 38: Thank You.
Thank You. Phone: 631-434-1414
Slide 39: PNM Energy Efficiency – Program Highlights
PNM Energy Efficiency – Program Highlights SL IDE 3 9 | J ANUARY 1 7 , 2 0 2 3
Slide 40: Residential Programs
RESIDENTIAL PROGRAMS • Cooling: o A/C tune-up o “Midstream” (distributor and HVAC contractor incentives) • Home Energy Checkups (Assessment, DI measure Installation and rebates) • Refrigerator Recycling • Residential Retail Products (non-lighting and lighting measures) • New Home Construction (build
Slide 41: Commercial Programs
COMMERCIAL PROGRAMS • Small Commercial Direct Install • New Construction (offering incentives for installing/designing more efficient construction) than code standards • Building retrofits o Rebates for specific measures ▪ Lighting ▪ Cooling ▪ Custom measures • “Midstream” offering equipment distrib
Slide 42: Demand Response
DEMAND RESPONSE • PNM’s demand response (DR) programs were first offered to customers in 2007 • Over the last 12 years, Power Saver and Peak Saver have developed into a reliable and cost effective alternative peaking resource • The programs deliver about 55 MW of non-spinning reserve capacity during
Slide 43: EE Savings and Achievements
EE SAVINGS AND ACHIEVEMENTS • PNM began offering Energy Efficiency programs in late 2007 • Currently on track to achieve 2025 EUEA savings goal Electricity saved, GWh CO2 saved, '000 tons Water saved, MM gallons 800 730 7,000 450 4,000 250 2,000 Thousands 702 390 391379 700 653 672 400 372 3,500 204
Slide 44: PNM Resource Adequacy Near Final Results Stakeholder Meeting
PNM Resource Adequacy Near Final Results Stakeholder Meeting Astrapé Consulting January 17, 2023 44
Slide 45: Future Resource ELCC Analysis Update
Future Resource ELCC Analysis Update 45
Slide 46: Defining ELCC
Defining ELCC • Effective load carrying capability (ELCC) is the quantity of ‘perfect capacity’ that could be replaced or avoided with wind, solar, storage, etc. while providing equivalent system reliability Original system LOLE Reduction in perfect capacity to return to original system LOLE LOLE im
Slide 47: Key Assumptions
Key Assumptions ▪ Neighbor Assumptions ▪ Based on recent SW E3 study data ▪ Public ERP and IRP data for PSCO and SPS ▪ 50 MW import limit during peak periods ▪ Impacts PNM existing solar accreditation ▪ 2025 storage, wind, and solar assumptions ▪ 650 MW of battery ▪ 607 MW of Wind ▪ 1,531 MW of Sola
Slide 48: Utility-Scale Battery Outage Rates in California
Utility-Scale Battery Outage Rates in California Planned and Forced Outage Rates Observed Among Over the past year, installed capacity of energy storage CAISO Energy Storage Resources on CAISO system has increased from approximately 2 to Oct 1, 2021 – Sept 30, 2022 4 GW • Daily outage reports publ
Slide 49: Resource Adequacy Risk by Hour of Day
Resource Adequacy Risk by Hour of Day 2025 - All Summer LOLE Risk 70% 60% % of Expected Unserved Energy 50% 40% 30% 20% 10% 0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of Day 49
Slide 50: Resource Adequacy Risk With 2025 Renewable Shapes
Resource Adequacy Risk With 2025 Renewable Shapes 70% 100% 90% 60% Solar and Wind Normalized Output 80% 50% 70% 60% % of LOLE 40% 50% 30% 40% 20% 30% 20% 10% 10% 0% 0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of Day '% of LOLE - Primary Axis Average Normalied Wind Output A
Slide 51: Surface Creation
Surface Creation ▪ To capture the ELCC values of incremental storage, solar, and wind resources we created surfaces of results for combinations of the three variables. ▪ The table below highlights what combinations were run in SERVM for total storage values of 650 MW, 850 MW, 1,250 MW, and 1,650 MW.
Slide 52: Surface Creation
Surface Creation ▪ Created Surfaces using SERVM results and smoothing algorithms. ▪ The surfaces provide the ability to calculate marginal ELCC for any of the three technologies at any combination within the ranges simulated ▪ Storage 650 MW – 1,650 MW ▪ Solar 1,531 MW –3,531 MW ▪ Wind 607 MW – 1,10
Slide 53: Updated Surfaces
Updated Surfaces Can calculate marginal ELCC at any point on this surface Near-final results 53
Slide 54: Updated Surfaces
Updated Surfaces Near-final results 54
Slide 55: Updated Surfaces
Updated Surfaces Near-final results 55
Slide 56: Updated Surfaces
Updated Surfaces Near-final results 56
Slide 57: Marginal ELCCs: 4-Hr Storage
Marginal ELCCs: 4-Hr Storage 4-Hr Storage Marginal ELCC 100% 90% 80% 70% 60% ELCC (%) 50% 40% 30% 20% 10% 0% 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 Storage Penetration (MW) 1,531 MW Solar and 807 MW Wind 2,331 MW Solar and 807 MW Wind 3,131 MW Solar and 807 MW Wind Near-final result
Slide 58: Net Load Shape Analysis – 1,600 MW of Storage under Solar Scenarios
Net Load Shape Analysis – 1,600 MW of Storage under 2 Solar Scenarios 2,500 PNM BA 2020 Peak Load Day 2,000 1,500 1,000 Load (MW) 500 0 -500 -1,000 -1,500 -2,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of Day 1,600 MW of Storage - 1,531 MW of Solar Net Load - 3,131 MW of
Slide 59: Marginal ELCCs: Solar
Marginal ELCCs: Solar Solar Marginal ELCC 100% 90% 80% 70% 60% ELCC (%) 50% 40% 30% 20% 10% 0% 1,600 2,100 2,600 3,100 Solar Penetration (MW) 850 MW 4-hr Storage and 807 MW Wind 1,250 MW 4-hr Storage and 807 MW Wind 1,650 MW 4-hr Storage and 807 MW Wind Near-final results 59
Slide 60: Marginal ELCCs: Wind
Marginal ELCCs: Wind Wind Marginal ELCC 100% 90% 80% 70% No significant interaction with solar as the interactive 60% benefits are already captured in the existing wind ELCC (%) portfolio since net peak load is already pushed out to 50% evening hours 40% Wind ELCC is primarily driven by wind penetra
Slide 61: 8-HR Sensitivity Results
8-HR Sensitivity Results 4-hr and 8-hr Battery ELCC Comparison 200 MW Incremental 4-hr ELCC 200 MW Incremental 8-hr ELCC Initial 4-hr Storage Capacity (MW) (%) (%) 650 86% 88% 850 85% 87% 1,050 82% 85% 1,250 81% 82% 1,450 65% 79% 1,650 Not simulated 69% Results include 2,331 MW of solar ELCC values
Slide 62: 2035 ELCC Sensitivity
2035 ELCC Sensitivity ▪ Direct comparisons to 2025 ▪ Slightly less value in 2035 due to higher renewable and storage values in neighboring regions Incremental Incremental Incremental 2025 Incremental 2035 Incremental Delta Storage (MW) Solar (MW) Wind (MW) ELCC (MW) ELCC (MW) (MW) 650 - - 469 452 (1
Slide 63: Initializing the ELCC Trajectory
Initializing the ELCC Trajectory Installed Capacity – PVNGS NNC Sum of Capacity (MW) Column Labels Row Labels 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Coal:Conventional 697 697 200 200 Demand:Distributed Generation 33 48 48 15 15 15 15 15 15
Slide 64: Questions
Questions AS$TRAPE CONSULTING innovation in electric system planning 64
Slide 65: PNM Summer 2022 Review and Modeled Market Assistance for Resource Adequacy
PNM Summer 2022 Review and Modeled Market Assistance for Resource Adequacy SL IDE 6 5 | J ANUARY 1 7 , 2 0 2 3
Slide 66: Introduction to Summer 2022 Discussion
INTRODUCTION TO SUMMER 2022 DISCUSSION • In our previous discussion of market dynamics and system resiliency, PNM mentioned meeting after summer 2022 to review new data and modeled market assistance included for resource adequacy • Modeled Market Assistance included for Resource Adequacy are current
Slide 67: Market Purchases During High-Risk Window
MARKET PURCHASES DURING HIGH-RISK WINDOW Average hourly purchases, MW Jun-Aug HE 19-22 • Summer 2022 did not see a regional heat wave comparable to prior summers, in addition, thermal 140 130 units had solid availability 122 120 • As the Southwest region sees more solar and storage additions, LOLE r
Slide 68: Regional Weather Dynamics Were Not as Extreme in 2022
REGIONAL WEATHER DYNAMICS WERE NOT AS EXTREME IN 2022 AS IN PRIO R YEARS June July August Mean Temperature Percentiles 2022 2021 Source: NOAA National Centers for Environmental Information Ranking period: 1895-2022 2020 SL IDE 6 8 | J ANUARY 1 7 , 2 0 2 3
Slide 69: Regional Dynamics Impact Market Liquidity
REGIONAL DYNAMICS IMPACT MARKET LIQUIDITY https://www.wecc.org/Administrative/Heatwave%20EEA%20Slides.pdf • Tuesday August 18, 2020 was the peak of the heat wave and • Five different Balancing Authorities were in EEA-2 or most challenging day for PNM operators and traders EEA-3 status on August 18,
Slide 70: Takeaways
TAKEAWAYS • Modeling and limits should focus on net peak periods since these are the most constrained hours • Regional dynamics play a major role in market liquidity • Planning should incorporate likelihood of regional constraints and weather events • PNM has no plans to change its current modeled i
Slide 71: 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 February 10, 2022. SL IDE 7 1 | J ANUARY 1 7 , 2 0 2 3
Slide 72: Near Term Schedule
NEAR TERM SCHEDULE FUTURE MEETING TIME & LOCATION When: February 15, 2023 Topics: Existing system (regulatory and planning requirements), modeling framework Start Time: 9:00 AM Location: Virtual SL IDE 7 2 | J ANUARY 1 7 , 2 0 2 3
Slide 73: 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 7 3 | J ANUARY 1 7 , 2 0 2 3
Slide 74: Thank you
Thank you pr aio OO@
Slide 75: Appendix
APPENDIX SL IDE 7 5 | J ANUARY 1 7 , 2 0 2 3
Slide 76: Effective Load Carrying Capability
Effective Load Carrying Capability Effective Load Carrying Capability (ELCC) describes the reliability contribution of an energy limited or non-dispatchable resource Effective Load Carrying Capability (ELCC) analysis adds load to offset the reliability contribution of the resource type under Illustr
Slide 77: Increased PV pushes net peak into evening
Increased PV pushes net peak into evening (eventually after sunset) Solar Penetration Demand Hour Ending (MST) SL IDE 7 7 | J ANUARY 1 7 , 2 0 2 3
Slide 78: ELCC captures saturation effects with increasing resource penetration
ELCC captures saturation effects with increasing resource penetration 78
Slide 79: ELCC Captures Synergistic Interactive Effects Between Resources
ELCC Captures Synergistic Interactive Effects Between Resources Resources with complementary characteristics produce a combined ELCC that exceeds the sum of individual resources’ ELCCs, producing a “synergistic interaction” • This effect has been described as a “diversity benefit” between resource
Public Service Company of New Mexico — Corporate Update (January 2023) on 6ix