New Mexico wind project
generates green power and jobs
by
Kevon Storie
 |
| The New Mexico Wind Energy Center at Taiban Mesa will be similar to FPL Energy's King Mountain Energy Center 60 miles south of Midland-Odessa, Texas. (FPL Energy photo) |
Public Service Company of New Mexico and FPL Energy recently inked an agreement that will make House, N.M., home of the third largest wind farm in the United States.
The investor-owned utility signed a long-term contract to buy all the power produced by the 204-MW New Mexico Wind Energy Center that FPL Energy will build, own and operate 170 miles southeast of Albuquerque. "PNM's involvement with the New Mexico Wind Energy Center represents the largest private-sector investment in renewable energy in New Mexico history," said PNM Spokesperson Don Brown.
The agreement concluded two years of negotiations which Brown admitted were sometimes touch and go. "The industry went through a lot of ups and downs during those years," he noted, recalling the huge spikes in the wholesale power market and the California energy crisis. "But the idea just made too much sense to give up. And now it's even better business."
Plan to buy renewable energy pre-dates state requirements
Brown referred to the New Mexico Public Regulation Commission's new rule requiring at least 5 percent of investor-owned utilities' retail sales be generated through renewable energy by 2006—increasing to 10 percent by 2011. The companies announced their plan in a joint statement in October, two months ahead of the passage of the rule in December.
The ambitious wind project will comprise 8 percent of PNM's overall generation capacity. However, the actual energy produced by the intermittent source is estimated at closer to 4 percent of the utility's portfolio in a given year.
Retail customers will
have the option of purchasing blocks of wind power from PNM
for a slight premium, fulfilling another component of the rule.
"We were developing our proposal for a green tariff well
before the PRC adopted the standard. We plan to seek PRC approval
of that tariff within the next few months," Brown said
proudly.
The utility will sell the rest of the power on the wholesale market inside and outside New Mexico.
Other factors beyond the growing market for renewable energy made the wind farm an attractive project. "The state offers a 1-cent-per-kWh production tax credit for wind power. Combine that with the 1.8 cent Federal credit program and you've got an economically viable operation," said Brown, adding, "PNM would really like to see that kind of support for developing other renewables."
Facility brings economic benefits to rural counties
Perhaps the greatest incentive for supporting the New Mexico Wind Energy Center was the economic opportunity it offered to rural DeBaca and Quay counties. Over 25 years, the length of PNM's contract, the facility will bring more than $40 million into the area, not counting the infusion of money from 125 to 150 temporary construction jobs during 2003.
The wind energy center will create permanent jobs generating about $500,000 in salaries every year. County governments and school districts can look forward to $450,000 per year in payments in lieu of taxes, and landowners will receive about $550,000 per year in lease payments.
FPL Energy
is building 136 turbines on 15 square miles of the mostly privately
owned Taiban Mesa. An existing 345-kV power line will transmit
the energy. However, PNM will have to build a new substation
to accommodate the wind energy center. "It's an infrastructure
improvement needed to accommodate the new wind facility,"
Brown reasoned.
Facility launch will correspond with more industry changes
PNM expects the New Mexico Wind Energy Center to go online this fall, about the same time as a five-year electric rate freeze goes into effect. The utility's rates will drop 4 percent in September 2003, and an additional 2.5 percent in September 2005. "Economic development is a big priority in the state right now," explained Brown. "The lower electric rates will hopefully make New Mexico more attractive to businesses."
The new renewable rule allows companies to recover from customers the costs of complying with the mandate. However, PNM's rate freeze means that such cost recovery would not come until 2008, two years after the mandate begins.
Debate over renewable policy in New Mexico will continue for some time. However, by working to protect their customers, protect the environment and grow the state's economy, Public Service of New Mexico seems to have all its bases covered.