PNM Proposes $344 Million Grid Modernization Plan for New Mexico

The Public Service Company of New Mexico has filed a grid modernization plan with the New Mexico Public Regulation Commission seeking approval of the first six years of investments in projects, totaling $344 million. The projects, a part of the company’s longer-term grid modernization strategy, include the deployment of smart meters and enhanced physical security and cybersecurity infrastructure to protect the new devices and networks deployed to achieve grid modernization.

As part of the application, the PNM Resources subsidiary proposes to invest in a comprehensive grid modernization plan to set New Mexico on a path to succeed in its clean energy transition, while meeting customers’ needs. The modernised grid proposed here will aim to enhance customer reliability, allowing better integration of carbon-free resources, ensuring that benefits flow to all customers, and improving customer experience.

The total investment is subject to a yearly evaluation and reconciliation through which PNM will file up to date forecasted costs for the following rate year based on the best accessible information and also  accurately reflect estimated costs from the previous year to the actual outlays acquired. The estimated revenue requirement for Year 1 is $9.8 million.

The application aims to recoup the expenditures of these projects through a Grid Modernization Rider, for which PNM will file an advice notice after the commission approval. To this end, PNM seeks approval of the proposed ratemaking methodologies used to develop the rider, as well as its proposal to collect the rider as a fixed monthly charge per customer. PNM also requests approval of the monthly charge amount by customer class listed in the proposed rider.

The company seeks commission action by July 1, 2023 to approve the implementation plan, which represents the first phase of its overall 11-year strategy for grid modernization. PNM seeks to minimize bill impacts by deploying its plan over an initial six-year period, with some projects planned for years 7-11 to carry out the company’s longer term grid modernization strategy. PNM intends to strategically phase-in investments to provide customer value and operational efficiency.

As it stands, PNM requests the earliest reasonable date for issuance of a final order on its application, in order to move forward as promptly as possible to implement Year 1 of the Implementation Plan.