Public Service Company Of New Mexico · OTC:PNMXO
Public Service Company Of New Mexico — Corporate Update (November 2007)
40 slides from Public Service Company Of New Mexico's corporate update, Nov 27, 2007
Slide 1: Electric Integrated Resource Plan
Electric Integrated Resource Plan Fifth Public Involvement Meeting November 27, 2007 PNM Alvarado Square 1
Slide 2: Evelin Wheeler, Director, Integrated Resource Planning
Evelin Wheeler Director, Integrated Resource Planning 2
Slide 3: Modeling Vocabulary
Modeling Vocabulary • Sensitivity • Scenario • Portfolio • Risk • Robust 3
Slide 4: Modeling Techniques
Modeling Techniques • Vary the sensitivities over a reasonable range • Examine multiple scenarios • Consider enough risks so that robust portfolios emerge 4
Slide 5: Portfolio Generation
Portfolio Generation Portfolio Ranking by Least Cost Low - Base High + Low Base High $8 $20 $40 Low High Load Gas Price Carbon Tax Others Portfolios sorted by cost, emissions and reliability for 5 each scenario
Slide 6: Portfolios Produced
Portfolios Produced • Up to 5,000 portfolios generated • Ordered by least cost for each scenario 6
Slide 7: Portfolio Risk Analysis
Portfolio Risk Analysis Portfolio Risk Analysis Test Top Portfolios Using Monte Carlo Carbon Tax $8 $20 $40 Load Gas Price Market 7
Slide 8: Schedule
Schedule • Review inputs by end of 2007 • Drafts for review February 2008 • Filing due date July 16, 2008 8
Slide 9: Environmental Impact
Environmental Impact Maureen Gannon Director, Environmental Services 9
Slide 10: Environmental Impact Topics
Environmental Impact Topics • Existing Impacts • Impacts of Potential New Resources • Future Regulations • Discuss Sensitivities 10
Slide 11: Current Generation
Current Generation PNM Energy by Unit Palo Verde 5% Four Corners 3% 5% 19% San Juan 1% Reeves 14% Afton New Mexico Wind 53% Energy Center Purchases 11
Slide 12: Criteria Pollutants - Current
Criteria Pollutants - Current Criteria Pollutants 6 Generation by Resource 5 4 (Environmental to Insert Graph) Carbon Monoxide lb s/M W h NOx 3 Particulate 2 SO2 1 0 Afton Palo Verde San Juan Reeves 4 Corners Plant 12
Slide 13: Carbon Emissions - Current
Carbon Emissions - Current Carbon Dioxide 1.000 Generation by Resource 0.900 0.800 Metric Tons/MWh 0.700 0.600 (Environmental to Insert Graph) 0.500 0.400 0.300 0.200 0.100 0.000 Afton Palo Verde San Juan Reeves 4 Corners Plant 13
Slide 14: Freshwater Usage - Current
Freshwater Usage - Current 0.9 0.8 0.7 0.6 gal/MWh 0.5 0.4 0.3 0.2 0.1 0 Afton San Juan Reeves 4 Corners Palo Verde Plant 14
Slide 15: Future Resource Considerations - Emissions
Future Resource Considerations- Emissions Future Fossil Technology Pollutant PC Fleet USPC IGCC NGCC NGCT NGCT Lb/MWh Average (Frame) (Aero) SO2 13 0.3-1.1 <0.1 nil <0.1 <0.1 NOx 6 0.3-0.5 <0.2 0.1 0.4 1.1 PM 1 <0.2 <0.1 nil <0.1 0.1 CO2 w/o 2250 1900 1850 800 1,300 1,300 capture CO2 with ------- 76
Slide 16: Freshwater Usage - Future
Freshwater Usage - Future 0.45 0.40 0.35 0.30 gal/MWh 0.25 0.20 0.15 0.10 0.05 0.00 Pulverized IGCC Combustion Combined Nuclear Coal Turbine Cycle (1x1) 16
Slide 17: Future Resource Considerations - Emissions
Future Resource Considerations- Emissions Future Renewable, EE, DSM Technology • Negligible air emission and freshwater usage for energy efficiency and DSM • Negligible air emission impacts for wind and solar; biomass is fuel dependent • Freshwater usage numbers for wind, solar and biomass are techn
Slide 18: Impact of Future Regulations
Impact of Future Regulations • Federal Clean Air Mercury Rule – Phase 1: 2010-2017 – Phase 2: 2018 and on • NM’s implementation of the mercury rule: Cap program with no trading • SJGS required to reduce mercury emissions – purchase of mercury allowances not an option – Phase 1 allocation – 488 lb –
Slide 19: Impact of Future Regulations
Impact of Future Regulations • EPA has proposed changes to the ozone NAAQS- if adopted these CRITERIA POLLUTANTS: could result in a number of Tightening of National counties in NM being classified as non-attainment. Ambient Air Quality • Any new or modified source in an Standards (NAAQS) ozone non-a
Slide 20: Climate Change
Climate Change Jeff Burks Director Environmental Sustainability 20
Slide 21: Climate Policy Landscape
Climate Policy Landscape • No shortage of interest in climate change regulations at state, regional and federal levels. • Governor Richardson’s Climate Change and GHG Reduction Executive Order established GHG emissions reduction goals, June 2005. • Five state Western Climate Initiative established i
Slide 22: Comparison of 110th Congress Emissions Targets
Comparison of 110th Congress Emissions targets 14000 Historical U.S. emissions (EPA, 1990-2005) Business-as-usual projection (AEO2007) Lieberman-Warner 12000 Bingaman-Specter assuming "safety valve" not hit McCain-Lieberman Sanders-Boxer / Waxman 10000 Kerry-Snowe Emissions (MMt CO2e) Olver-Gilchres
Slide 23: Assessment of Climate Risk in 2008 IRP
Assessment of Climate Risk in 2008 IRP • Timing and structure of future CO2 regulation still remains uncertain • The company will use PRC standardized carbon emissions costs in base assumptions • Carbon emissions will be priced beginning in 2010, at $8, $20, and $40 per ton escalating at 2.5% per ye
Slide 24: Discussion: Environmental Impacts
Discussion Environmental Impacts 24
Slide 25: Electric Load Forecasting Scenarios
Electric Load Forecasting Scenarios Frank Stern Principal, Summit Blue Consulting Steve Martin Sr. Economic Analyst, Modeling & Forecasting 25
Slide 26: Objectives
Objectives • Review load forecasting process • Review load characteristics • Review drivers • Discuss high/low scenarios 26 26
Slide 27: Electric Load Forecasting Provides Several Outputs
Electric Load Forecasting Provides Several Outputs • The electric load forecast provides – Energy forecast – Annual demand forecast – Hourly demand forecast 27 27
Slide 28: Importance of Load Forecasting to Resource Planning
Importance of Load Forecasting to Resource Planning • Long lead times are required to build power plants – Regulatory and environmental approval – Time to secure investment to finance construction – Time to procure equipment and construct the facility 28 28
Slide 29: Energy Variation
Energy Variation 2,000 1,800 1,600 1,400 1,200 (MW) 1,000 Energy sales and demand vary on a 800 day to day basis throughout the year. 600 400 200 0 1/1/2006 2/1/2006 3/1/2006 4/1/2006 5/1/2006 6/1/2006 7/1/2006 8/1/2006 9/1/2006 10/1/2006 11/1/2006 12/1/2006 29 29
Slide 30: PNM's System Load Shape
PNM’s System Load Shape July 17, 2006-Peak Day 2,000 1,800 1,600 1,400 1,200 (MW) 1,000 800 600 400 200 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 30 30
Slide 31: PNM's System Peak Demand
PNM’s System Peak Demand PNM's July 17, 2006 System Peak (1,855 MW) Losses, 178 Firm FERC, Residential, 499 163 TNMP (Retail), 117 Other, 13 Industrial, 169 Commercial, 715 31 31
Slide 32: Increase in Residential Usage
Increase in Residential Usage 1,200 1,000 Homes built in 2005 800 kWh 600 Homes built prior to 2002 400 Driven Drivenbyby larger homes, larger homes, manymany of 200 which areare of which using usingrefrigerated refrigerated air conditioning for cooling air conditioning for cooling 2006 billings 0 S
Slide 33: PNM Retail Sales by Class
PNM Retail Sales by Class 7,000 6,000 Forecast 5,000 Commercial (GWh) 4,000 3,000 Residential 2,000 1,000 Industrial 0 90 93 96 99 02 05 08 11 14 17 20 23 26 19 19 19 19 20 20 20 20 20 20 20 20 20 33 33
Slide 34: PNM System Peak Demand
34 (MW) 800 1,300 1,800 2,300 2,800 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 2007 Forecast 16 2008 Forecast 20 Growth Rate 2.4% 17 Growth Rate 2.2% 20 18 PNM System Peak Demand
Slide 35: Total PNM Retail Sales
Total PNM Retail Sales 12,000 11,000 2007 Forecast Growth Rate 2.4% 10,000 9,000 2008 Forecast Growth Rate 2.2% (GwH) 8,000 7,000 6,000 5,000 PNM retail sales does NOT include the former TNMP-NM sales. 4,000 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 19
Slide 36: Peak Demand
Peak Demand What contributes to peak demand increase? • Growing number of customers • Residential customer 5-yr. growth projected: 2.3% • Commercial customer 5-yr. growth projected: 1.9% • Growing use per customer • Increased size of dwellings • Increased use of electronic devices • Increased air co
Slide 37: What could lead to higher usage?
What could lead to higher usage? • Robust economy, resulting in – Continued construction of larger homes – Continued adoption of air conditioning – Increase in number of customers. • Significant adoption of plug-in hybrids • Renaissance of uranium industry 37 37
Slide 38: What could lead to lower usage
What could lead to lower usage • Slower economic growth resulting in less construction, smaller houses, less AC adoption, and erosion of manufacturing load. • Long-term drought constraining growth. • High carbon and/or energy prices depressing demand. 38 38
Slide 39: Summary of Draft Scenarios
Summary of Draft Scenarios Retail Energy Growth Sector Historical Low Growth Base Case High Growth Growth (2006-2016) (2006-2016) (2006-2016) (1996-2006) Residential 3.8% 2.6% 3.5% 4.6% Commercial 3.0% 1.4% 2.4% 3.9% Industrial 1.2% -1.2% -0.2% 0.8% Total 2.8% 1.9% 2.7% 3.7% For discussion purposes.
Slide 40: Discussion: Load Forecast
Reliability 40 Discussion Load Forecast A personal commitment to New Mexico pal
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