PNM Integrated Resource Plan MARCH 11, 2014 PUBLIC ADVISORY WORKING GROUP MEETING

Transcription

1 PNM Integrated Resource Plan MARCH 11, 2014 PUBLIC ADVISORY WORKING GROUP MEETING M ARCH 11, 2014

2 WIRELESS ACCESS FOR MAR 11 TH ATTENDEES Network: Orbit-GA Username: guest Password: SLIDE 2 MARCH 11, 2014

3 AGENDA MARCH 11 TH Today s agenda Welcome, Introductions, Safety and Ground Rules Solar Considerations Risk Analysis Discuss Schedule & Plan future meetings SLIDE 3 MARCH 11, 2014

4 SAFETY AND LOGISTICS Fire escape routes via stairways at east and west ends of hallway; please let us know if you require special handicap egress or special assistance We must obey any fire or emergency alarm; even drills/test alarms Restrooms Women's room at west end; Men's room at east end Must sign in and sign out with security desk each time you enter the building Recycling please help our efforts by dropping plastic or aluminum containers in the designated recycle bins SLIDE 4 MARCH 11, 2014

5 MEETING GROUND RULES Questions and comments are welcome; please be mindful of our time constraints Comments should be respectful of all participants Use name tents to indicate you have a comment or question Reminder: today s presentation is not PNM s plan or a financial forecast, it is an illustration of the IRP modeling process SLIDE 5 MARCH

6 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 contained in the presentation are subject to a variety of risks, uncertainties and other factors, most of which are beyond the company s control, and many of which could have a significant impact on the company s ultimate conclusions and plans. For further discussion of these and other important factors, please refer to reports filed with the Securities and Exchange Commission. The reports are available online at The information in this presentation is based on the best available information at the time of preparation. The company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances that occur after the date on which such statement is made or to reflect the occurrence of unanticipated events, except to the extent the events or circumstances constitute material changes in the Integrated Resource Plan that are required to be reported to the New Mexico Public Regulation Commission (NMPRC) pursuant to Rule New Mexico Administrative Code (NMAC). SLIDE 6 MARCH

7 SOLAR CONSIDERATIONS IMPACTS OF SOLAR PHOTOVOLTAIC ( PV ) RESOURCES Illustrate how Solar PV impacts PNM s demand Solar PV capacity contribution Solar PV energy contribution SLIDE 7 MARCH 11, 2014

8 SOLAR CONSIDERATIONS PNM SOLAR CAPACITY VALUE - TYPICAL PEAK DAY DEMAND 2,000 1,800 1,600 1,400 1,200 1, :00 AM 3:00 AM 4:00 AM 5:00 AM 6:00 AM 7:00 AM 8:00 AM 9:00 AM 10:00 AM 11:00 AM 12:00 PM 1:00 PM 2:00 PM 3:00 PM 4:00 PM 5:00 PM 6:00 PM 7:00 PM 8:00 PM 9:00 PM 10:00 PM 11:00 PM 12:00 AM 1:00 AM System Peak SLIDE 8 MARCH 11, 2014 MW

9 SOLAR CONSIDERATIONS PNM SOLAR CAPACITY VALUE - JULY TYPICAL DAY PEAK CONTRIBUTION 100.0% 90.0% 80.0% 70.0% 91.0% 86.8% 91.0% 72.5% 91.9% 87.4% 90.0% 81.5% 76.0% 70.7% 60.0% 50.0% 40.0% 44.0% 30.0% 20.0% 10.0% 7.2% 0.0% SLIDE 9 MARCH 11, % 19.5% MW 2:00 AM 3:00 AM 4:00 AM 5:00 AM 6:00 AM 7:00 AM 8:00 AM 9:00 AM 10:00 AM 11:00 AM 12:00 PM 1:00 PM 2:00 PM 3:00 PM 4:00 PM 5:00 PM 6:00 PM 7:00 PM 8:00 PM 9:00 PM 10:00 PM 11:00 PM 12:00 AM 1:00 AM System Peak

10 SOLAR CONSIDERATIONS PNM SOLAR CAPACITY VALUE - PNM TYPICAL PEAK DAY NET DEMAND 2,000 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 SLIDE 10 MARCH 11, 2014 MW 2:00 AM 3:00 AM 4:00 AM 5:00 AM 6:00 AM 7:00 AM 8:00 AM 9:00 AM 10:00 AM 11:00 AM 12:00 PM 1:00 PM 2:00 PM 3:00 PM 4:00 PM 5:00 PM 6:00 PM 7:00 PM 8:00 PM 9:00 PM 10:00 PM 11:00 PM 12:00 AM 1:00 AM System Peak PNM 2016 Solar PV (40 MW) PNM 2015 Solar PV (23 MW) PNM Existing Solar PV (44 MW) PNM Solar PV DG PNM Peak Demand

11 SOLAR CONSIDERATIONS PNM SOLAR CAPACITY VALUE Solar PV production provides capacity value during PNM system peak Solar PV capacity value declines as more solar facilities are added to the system Capacity curves are provided by solar developer(s) and validated against historical information and industry standards SLIDE 11 MARCH 11, 2014

12 SOLAR CONSIDERATIONS PNM SOLAR ENERGY CONTRIBUTION TYPICAL DAY VS. 10 MW SOLAR PV 1,500 1,400 1,300 1,200 1,100 1, January ,200 1,100 1, MW 2:00 AM 4:00 AM 6:00 AM 8:00 AM 10:00 AM 12:00 PM 2:00 PM 4:00 PM 6:00 PM 8:00 PM 10:00 PM 12:00 AM 2:00 AM 4:00 AM 6:00 AM 8:00 AM 10:00 AM 12:00 PM 2:00 PM 4:00 PM MW MW 6:00 PM 8:00 PM 10:00 PM 12:00 AM MW April 2,000 1,800 1,600 1,400 1,200 1, July ,300 1,200 1,100 1, :00 AM 4:00 AM 6:00 AM 8:00 AM 10:00 AM 12:00 PM 2:00 PM 4:00 PM 6:00 PM 8:00 PM 10:00 PM 12:00 AM 2:00 AM 4:00 AM 6:00 AM 8:00 AM 10:00 AM 12:00 PM 2:00 PM 4:00 PM MW SLIDE 12 MARCH 11, MW MW 6:00 PM 8:00 PM 10:00 PM 12:00 AM MW October

13 SOLAR CONSIDERATIONS PNM SOLAR ENERGY VALUE Although solar PV provides energy value, a significant customer energy requirement remains Solar PV energy provides hedge against future carbon prices and fossil fuel price variations Energy value decreases with solar panel degradation SLIDE 13 MARCH 11, 2014

14 RISK ANALYSIS OVERVIEW MODELING KEY COST FACTOR VARIABILITY PNM s modeling shows that the input factors that both A) display significant variation in their magnitude and B) have a major impact on total ratepayer cost are: 1. Natural gas prices 2. Load growth 3. Potential greenhouse gas emission costs 4. Wholesale electricity market prices SLIDE 14 MARCH 11, 2014

15 PORTFOLIO COST SENSITIVITY TO KEY FACTORS Revised SIP w/pvngs #3; Portfolio Cost Factors $5,700,000 $5,900,000 $6,100,000 $6,300,000 $6,500,000 $6,700,000 $6,900,000 $7,100,000 $7,300,000 Carbon Cost Load Growth Coal Price Natural Gas Price Drought Energy Efficiency Case Descriptions: Low Cost High Cost Reference Case Values Sensitivity Sensitivity Carbon Cost $ first year Load Growth 0.7% -- annual peak demand growth rate 0.5% 1.1% Coal Price $2.73/ton -- change from SJGS base coal cost -10.0% 20.0% Natural Gas Price $ $/mmbtu, escalate 2.5% $3.75 $4.15 Drought Budget -- No scarcity Reference Drought Energy Efficiency Base -- Program effectiveness scenarios High Impact Low Impact SLIDE 15 MARCH 11, 2014

16 ANALYZE VARIATION IN MULTIPLE COST FACTORS Test Portfolios Using Monte Carlo Simulations Load Gas Price Electricity Price CO 2 Cost X X X X SLIDE 16 MARCH

17 PORTFOLIO RISK AND COST RESULTS PLOTTING THE SIMULATION OUTCOMES FOR A PORTFOLIO 95 th Percentile Mean NPV Mean 95 th Percentile Cheaper than the mean More expensive than the mean SLIDE 17 MARCH 11, 2014

18 PORTFOLIO COST & RISK COMPARISONS Case # UT: Risk - Cost Results (900 Draws: CO2, P E, P G, Load) $400 5% Risk Tail ($m million) $350 $300 $250 $200 Indifference RSIPw/o PV3 RSIP + PV3 Retire 4 units FIP -SCR $150 $6,200 $6,400 $6,600 $6,800 $7,000 $7,200 $7,400 $7,600 Expected Portfolio Cost (Mean NPV $million) SLIDE 18 MARCH 11, 2014

19 NEXT MEETING AGENDA CONTINUE PORTFOLIO ANALYSIS Follow up on comments from today s meeting Discussion and review of preliminary Integrated Resource Plan Draft Report Trends and conclusions Discuss report preparation Meeting schedule to be determined SLIDE 19 MARCH 11, 2014

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21 MAKE SURE WE HAVE UP TO DATE CONTACT INFORMATION FOR YOU for documents for s Register your on sign-in sheets for alerts of upcoming meetings and notices that we have posted new information to the website. Meetings Schedule: Tuesday, Sept. 17, 2013, 8 a.m.- noon Friday, Sept. 20, 2013, 8 a.m.- noon Thursday, Sept. 26, 2013, 8 a.m.- noon Friday, Oct. 4, 2013, 8 a.m.- noon Friday, Nov. 15, 2013, 8 a.m.- noon SLIDE 21 MARCH 11, 2014

22 IRP GOALS BALANCE SLIDE 22 MARCH 11, 2014