Jason Marks NM Public Regulation Commission
February 6, 2009
2009 Regulatory Perspective
LSI Utility Rate Case Issues 2009 – Las Vegas
Outline
• A Challenging & Rapidly Evolving Environment
• Supply Issues• Regional Transmission
Challenging and Evolving Environment – Fuel Price Volatility
Challenging and Evolving Environment: New Investment/Rate Base Increases
Challenging and Evolving Environment:Getting Serious about Climate Change
The Cost of Addressing Carbon
A different choice for new versus existing generation.
Fuel Cost For Current Coal and CC Gas w/ Carbon Value
0
20
40
60
80
100
0 10 20 30 40 50 60 70Carbon Value ($ / ton CO2)
$ p
er m
egaw
att-
ho
ur Existing CC w/ $8 gas
Existing CC w/ $6 gas
Existing Pulverized Coal
New pulv coal
Challenging and Evolving Environment:Economic Weakness
New Mexico Confronts Supply Challenges: Energy Efficiency
Pub Svc N.M. - Energy Efficiency Savingsas a % of Total Retail Sales
0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Pub Svc Co. NM - EE Savings
8,0008,5009,0009,500
10,00010,50011,00011,50012,00012,500
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
An
n. G
WH
s
Series2
Series1
New Mexico Confronts Supply Challenges: Natural Gas/Renewables
Delta-Person – PPA 132 MW CT 2000
Afton – RB 235 MW CC Nov 2007
Valencia – PPA 148 MW CT Summer 2008
Lea Power Prtnrs – PPA
500 MW CC July 2008
Newman Five 288 MW CC May ’09 (CT)
May ’10 (CC)
Lordsburg
Luna
80 MW CT
190 MW CC
RB pending
EPE/eSolar PPA 64 MW Solar Thermal
2011
Cost of Service Issues at NM PRC
• Rate Case Redux– EPE Electric: June ’07 – June ’07 (S)– PNM Gas: May ’06 – June ’07 (L)– PNM Electric: March ’07 – June ’08 (L)– SPS Electric: July ’07- Aug ’08 (L)– PNM Electric: Sept ’08 – – SPS Electric: Early ’09 (?) – – Numerous complex water cases
• Utility Desire to Accelerate Rate “Relief” • Workshop on stipulations/partial stipulations• Utility legislative proposals
Executive Compensation
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
Total Compensation for Top 5 ExecutivesNM IOU and Similarl-Sized Public Power Utilities
Addressing Regional Transmission Needs
Western Renewable Energy Zones Project:
www.westgov.org/wga/initiatives/wrez/comments.htmComments thru March 2, 2009
Addressing Regional Transmission Needs• NM, CO, WY, UT to sponsor
conference:– What laws permit or constrain the
ability of state regulators to engage in joint decision making with their counterparts in neighboring states?
– What legal principles guide state regulators in reconciling their traditional charge to protect jurisdictional interests with broader public interests at stake in multistate transmission projects and renewable energy development? \
ARIZONA
Tucson
Phoenix
Holcomb
NEW MEXICO
COLORADO
WYOMINGDave
Johnston
LRS
Albuquerque
Limon
Comanche
Lamar
Pawnee/Story
Socorro
Gladstone
Midway
SunZia
HPX
14
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