STATE CAPITOL

July 31st, 2017

Mr. Ernest D. Archuleta P.E.
Public Regulation Commission
Office of the Chief of Staff
1120 Paseo De Peralta
P.O. Box 1269
Santa Fe, NM 87504

Dear Mr. Archuleta,

In The Matter of the Filing of an Integrated Resource Plan by the Public Service Company of New Mexico, we
are writing to file a formal protest to the Integrated Resource Plan ("IRP") proposed by the Public Service
Company of New Mexico ("PNM").

In large part due to the inadequacy of the PRC’s IRP guidelines, PNM’s Integrated Resource Plan which
proposes the abandonment of San Juan Generating Station ("SJGS") in 2022, fails to account for several very
significant factors. These include the number of economic base jobs that will be lost, the cost for greenfield
reclamation of the abandoned SJGS, the advantage of keeping a diverse energy portfolio as a safeguard
against commodity price increases and service disruption, and the impact on state and local revenues -
including several school districts.

The premature shutdown of SJGS will result in the elimination of approximately 1;500 jobs in San Juan County,
including over 650 at the power plant and coal mine along with approximately 750 contractors, suppliers and
other service related work. These 1,500 jobs account for over $75 million in annual wages and benefits. The
magnitude of harm the elimination of these jobs would cause to the Four Corners region cannot be overstated
- the equivalent in Bernalillo County would be the loss of Kirtland Air Force Base or Sandia Laboratories. At a
time when more than 6,000 high-paying oil industry jobs have disappeared along with nearly 14,000 residents,
San Juan County would be devastated by the loss of more economic base jobs.

Another major problem with PNM’s IRP is their failure to account for the cost of reclaiming the SJGS site. PNM
should not be allowed to abandon SJGS without returning the site back to greenfield status. The omission of
reclamation costs in the IRP demonstrates PNM’s intent to leave behind an industrial hazard site for New
Mexico taxpayers to deal with in the future. If that site is not going to be put to beneficial use as a power
generation station, it should be returned back to its original state. This is a $270 million expense that needs to
be accounted for in the IRP.

Additionally, PNM’s IRP severely underestimates the benefits of keeping a diverse energy portfolio. The IRP
does not indicate any hedge against an increase to natural gas prices, which have been well over ~10 / MCF in
recent history. PNM should also be required to have adequate storage facilities or infrastructure in place to
ensure continued utility service in the case of supply disruption. Currently, coal power generating stations are
required to stockpile reserves to insure against supply disruption -this is a minimal public safety requirement.
All reserve supply facilities and/or infrastructure should be included in the initial IRP cost estimate.

Finally, PNM’s IRP completely disregards the impact of prematurely decommissioning SJGS on state, local
governments and school districts. Between severance taxes, gross receipts, corporate, personal income taxes
and mill levies, well over ~50 million (every year) in state and local taxes and school district tax revenues will
have to be made up by tax paying citizens. The additional costs of unemployment benefits, along with an
increase in welfare and Medicaid enrolment will also have to be covered by tax payers. This shift of the tax
burden onto the backs of already overtaxed New Mexico citizens would be devastating as we continue to work
toward recovery from the Great Recession. These numbers do not include the $34 million stranded asset
exposure the residents of Farmington will bear due to the city’s minority ownership in SJGS, nor the city’s
premature replacement cost of ~97 million in new generation.

We therefore urge you, in accordance with your duty to protect the Public’s Interests, to reject PNM’s IRP
which proposes to prematurely shut down and leave abandoned the SJGS. We further urge the Commission to
require that PNM submit a new IRP which includes all of the costs presented to you in this protest.

Sincerely,

State Senator William Sharer, SD 1 Stal Steve Neville, SD 2

Representative Rod Montoya, HD :t
BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION

IN THE MATTER OF THE PROTEST TO )
PNM’S 2017 INTEGRATED RESOURCE ) Docket No. 17-00174-UT
PLAN )
)

CONSOLIDATED RESPONSE OF PUBLIC SERVICE COMPANY OF NEW MEXICO
TO PROTESTS TO 2017 INTEGRATED RESOURCE PLAN

Public Service Company of New Mexico ("PNM"), through its undersigned counsel,

submits this consolidated response ("Response") to the written protests ("Protests") filed by the

New Mexico Industrial Energy Consumers ("NMIEC"), the Northwestern New Mexico

Legislators~ ("Legislators"), Southwest Generation Operating Co. LLC ("SWG"), Citizens for

Fair Rates and the Environment ("CFRE") and New Energy Economy ("NEE")2 with respect to

PNM’s 2017 Integrated Resource Plan ("2017 IRP").3 NMIEC, Legislators, SWG, CFRE and

NEE are sometimes collectively referred to in this Response as the "Complainants".

The Northwestern New Mexico Legislators include: State Senator William Sharer, State Senator Steve
Neville, Representative Rod Montoya, Representative James Strickler, Representative Paul Bandy, and
Representative Sharon Clahchischilliage.

The protests of CFRE and NEE were filed in Case No. 17-00192-UT. Upon consultation with the
Commission’s Records Bureau, PNM was advised to file this Response in Case No. 17-00174-UT.

The Complainants filed their respective Protests to PNM’s 2017 IRP as follows: (1) New Mexico Industrial
Energy Consumers Protest to Public Service Company of New Mexico’s 2017 Integrated Resource Plan
("NMIEC Protest"); (2) Formal Protest to the Integrated Resource Plan proposed by Public Service
Company of New Mexico ("Legislators Protest"); (3) Southwest Generation Operating Co. LLC Verified
Protest of PNM’s 2017-2036 Integrated Resource Plan ("SWG Protest"); (4) Citizens for Fair Rates and
the Environment’s PROTEST of PNM’s 2017 Integrated Resource Management Plan ("CFRE Protest"); (5)
New Energy Economy’s Verified Protest of PNM’s 2017-2036 Integrated Resource Plan and Request for
Summary Return of Plan or Hearing ("NEE Protest").
INTRODUCTION

1. On July 3, 2017, PNM submitted its 2017 IRP to the New Mexico Public

Regulation Commission ("NMPRC" or "Commission"), as required by 17.7.3 NMAC ("IRP

Rule"). The 2017 IRP identifies the most cost-effective portfolio of existing and new resources

that meets electric system demand, provides acceptable system reliability and operational

flexibility, and meets applicable legal and regulatory requirements, at a low projected customer

cost and cost risk profile across most scenarios. A significant finding of the 2017 IRP is that

retiring PNM’s 497 MW share of San Juan Generating Station ("SJGS") in 2022 would provide

long-term cost savings for PNM’s customers.

2. In the Protests, certain of the Complainants contend that PNM’s 2017 IRP is

deficient under the IRP Rule4 and should be rejected by the Commission. See, NMIEC Protest,

pp. 3-14; SWG Protest, pp. 9-19; CFRE Protest, pp. 1-8, NEE Protest, pp. 4-21. In addition,

though not necessarily a basis for protest, certain of the Complainants raise questions related to

specific analytic assumptions, including those assumptions surrounding costs, environmental

attributes, and replacement alternatives. See, NMIEC Protest, pp. 6-9; SWG Protest, pp. 8-17

and pp. 23-26; CFRE Protest, pp. 3-8, NEE Protest, pp. 10-21. Finally, certain Complainants use

the Protests as a venue to express dissatisfaction over PNM’s resource procurement process.

See, SWG Protest, pp. 19-23; CFRE Protest, pp. 8-10; NEE Protest, p 21-23.

3. 17.7.3.12(A) NMAC provides that the Commission will review an IRP "for

compliance with the procedures and objectives set forth" in the IRP Rule. "Unless a protest is

4 The Legislators Protest does not state that PNM’s 2017 IRP was deficient, but instead contends that the
NMPRC IRP guidelines are inadequate and fail to account for several significant factors such as job loss,
remediation costs, portfolio diversity and impact on state and local revenues. See, Legislators Protest, p.
1.PNM acknowledges the potential adverse economic impact of a SJGS closure on the local community,
but the issue before the Commission is simply whether the 2017 IRP conforms to the IRP Rule as written.
The Commission can make that determination without concluding that closure is in the public interest, and
acceptance of the 2017 IRP as compliant with the IRP Rule will not affect the Commission’s decision in
any future abandonment proceeding.
2
filed that demonstrates to the Commission’s reasonable satisfaction that a hearing is necessary,"

the Commission may accept an IRP without a hearing. Id. The Protests fail to demonstrate that

the 2017 IRP should be rejected by the Commission. The IRP meets all of the requirements of

the IRP Rule and should be accepted as compliant without further proceedings.

BACKGROUND

4. The Commission adopted the IRP Rule to fulfill certain requirements of the New

Mexico Efficient Use of Energy Act, NMSA 1978, §§ 62-17-10 through -11 (2013) ("EUEA").

Section 62-17-10 (2005) of the EUEA addresses utility integrated resource planning and requires

utilities to file integrated resource plans with the Commission to "evaluate renewable energy,

energy efficiency, load management, distributed generation and conventional supply-side

resources on a consistent and comparable basis and take into consideration risk and uncertainty

of fuel supply, price volatility and costs of anticipated environmental regulations in order to

identify the most cost-effective portfolio of resources to supply the energy needs of customers."

The purpose of the IRP Rule is "to set forth the commission’s requirements for the preparation,

filing, review and acceptance of integrated resource plans by public utilities supplying electric

service in New Mexico in order to identify the most cost-effective portfolio of resources to

supply the energy needs of customers." PNM’s 2017 IRP contains all of the elements required

under the IRP Rule for acceptance by the NMPRC.

At a general level, the protests are not concerned with IRP compliance so much as

the outcomes of PNM’s analysis. This is not a claim PNM failed to satisfy the IRP Rule, but

rather that the answer when following the rule is undesirable from a given Complainant’s view.

The 2017 IRP conforms to the requirements of the IRP Rule, and Table 13 in Appendix G of the
2017 IRP, entitled IRP Rules Checklist and attached hereto Exhibit 1, methodically sets forth

how and where the 2017 IRP meets each requirement of the IRP Rule.

6. A review of the Protests reveals that while Complainants express opposition to the

2017 IRP in terms of non-compliance with the IRP Rule, their real concerns are about certain

substantive conclusions of the report which they find objectionable as a matter of public policy.

Some Complainants want to see coal-fired generation continue to run through the end of its

useful life, regardless of what economic analyses show. Some believe PNM should be retiring

Four Comers Power Plant ("FCPP") now, regardless of what the economic analyses show.

Others object to the economic consequences to communities based on actions which were

identified in the 2017 IRP modeling results. The Protests include allegations speculating about

PNM’s motivations regarding future cost recovery, allegations of bias and predetermination of

modeling outcomes, arguments about future cost recovery for any stranded assets, and

accusations about whether PNM has fulfilled its responsibilities under the regulatory compact

that governs the relationship between the Commission, PNM, and customers.

7. The problem with the Protests is two-fold. First, the allegations impugning

PNM’s motivations and the integrity of its analyses are baseless. Second, the arguments drift far

afield from the Commission’s charge with regard to the 2017 IRP under the IRP Rule, i.e., to

conduct a "compliance review" and "review the utility’s proposed IRP for compliance with the

procedures and objectives set forth" in the IRP Rule. The protests object to the public policy

outcomes that would occur if the most cost-effective portfolio and four-year action plan set forth

in the 2017 IRP were implemented by PNM and approved by the Commission. The IRP Rule

makes clear, however, that an integrated resource plan is simply a planning document and that

additional proceedings are necessary to implement actions contained in the IRP. 17.7.3.12(B)
NMAC. Acceptance of an IRP neither permits nor requires PNM to close SJGS in 2022 or take

other actions set forth in the IRP. Therefore, the public polity-driven objections in the protests

cloaked as compliance violations should be rejected because parties will have a full opportunity

to bring forward these arguments when PNM seeks Commission authorization to proceed with

any action contemplated by this IRP.5

8. Complainants raise public policy considerations with respect to the future of the

PNM system and generation mix. Similar concerns were expressed in a recent letter sent to the

Commission from the Legislative Finance Committee. Indeed, the IRP acknowledges that

impacts on communities from potential changes to PNM’s generation mix are considerations as

PNM evaluates next steps. The question here, however, is whether the 2017 IRP has met the

requirements of the IRP Rule. The contents and detailed analysis contained in the 2017 IRP, as

summarized in Table 13 of Appendix G, show that it has.

RESPONSE TO PROTESTS

9. In the Protests filed by NMIEC, SWG, CFRE and NEE, numerous allegations

regarding supposed deficiencies, errors and uncertainties are raised with respect to the 2017 IRP.

A close examination of the 2017 IRP itself, and especially Table 13 of Appendix G, shows these

allegations are without merit. While not responding to each and every statement and inference in

these Protests, PNM addresses select major topics raised in the Protests as delineated below.

10. The Public Advisory Participation Process. NEE asserts that PNM simply paid

"lip service" to that statutorily-required public advisory process by not considering matters raised

Pursuant to paragraph 19 of the Amended Stipulation approved by the Commission in Case No. 13-00390-
UT, between July 1, 2018 and December 31, 2018, PNM will "make a filing with the Commission... to
determine the extent to which SJGS should continue serving PNM’s retail customers’ needs after June 30,
2022."
by interested stakeholders in the 2017 IRP in any meaningful way. NEE Protest, p. 10, Van

Winkle Affidavit, p. 6.

11. PNM Response. NEE’s assertions concerning the public advisory process for the

2017 IRP are not only unsupported, they are wrong. The 2017 IRP discusses the public advisory

process and how the attendees actively engaged in the planning process by discussing the

planning assumptions and approach, providing comments, sharing concerns, and proposing

alternative scenarios, assumptions, and methodologies for consideration. See, 2017 IRP, pp.

137-140. PNM held ten public advisory meetings throughout the course of the year-long IRP

process addressing topics ranging from the particular requirements of the 2017 IRP related to

SJGS, to electric grid reliability, PNM’s baseload resources, PNM’s existing transmission system

(and possible transmission additions), emerging technologies (including storage), and fuel and

carbon costs and projections. See, 2017 IRP, p. 138. In the public advisory process, PNM

provided data so that advisory group participants could perform independent analyses and

provided a preliminary draft report on April 20, 2017, in advance of finalizing the report, to

allow time for review and feedback by participants and other stakeholders. See, 2017 IRP, p.

139. After the preliminary draft was issued, PNM held an additional six public comment

meetings throughout its service territory, in Farmington, Alamogordo, Deming, Silver City,

Albuquerque, and Santa Fe. See, 2017 IRP, p. 140

12. The public advisory process resulted in significant contributions to the 2017 IRP.

Participants provided substantial feedback, including, without limitation, prioritization

recommendations regarding which areas and topics in the draft IRP were covered adequately and

which required more analysis. The discussions between PNM and the public participants

resulted in tangible revisions and modifications to the draft IRP. For example, in response to

6
public advisory process feedback, PNM included a discussion of how resource planning affects

PNM’s business, provided additional and detailed explanation as to why PNM is not considering

repowering SJGS with natural gas, developed and considered portfolios with higher levels of

renewable supply, and conducted further assessments of near-term and long-term potential of

batteries and other storage technologies. See, 2017 IRP, p. 139. Furthermore, public advisory

process participants expressed interest in the key question of continuing versus retiring SJGS in

2022. Through the public advisory process, participants raised concerns about the impacts of

resource planning decisions on customers, environmental impacts of IRP decision points, and

how advanced technology may be deployed to address resource planning challenges. PNM

considered and addressed each concern. The public process ultimately made the 2017 IRP filed

with this Commission an improved document from the draft IRP.

13. NEE’s unfounded assertion that the entire public advisory process was a charade

discounts the time, effort and contributions of all participants to the process, and certainly should

not result in a finding that the 2017 IRP fails to comply with the IRP Rule. NEE’s assertions are

shown to be unfounded not only by the 2017 IRP itself, as described above, but by the comments

filed by Western Resource Advocates ("WRA") in this docket:

PNM accepted comments and feedback throughout the [public advisory] process
and responded to the public comments in its published analysis. PNM also
responded to numerous data requests from public participants by providing load,
resource, performance and other modeling parameters, inputs and outputs
throughout the process.

At ¶ 2 (August 2, 2017). WRA recommends that the Commission accept PNM’s 2017 IRP as

filed, as do the Coalition for Clean Affordable Energy and the Interwest Energy Alliance. See

initial comments filed in Case No. 17-00174-UT.
14. The Most Cost-Effective Portfolio. NEE and CFRE assert that PNM did not

identify the most cost-effective portfolio in the 2017 IRP. NEE Protest, pp. 1; 6-8, Van Winkle

Affidavit, pp. 5-6; CFRE pp. 1, 8. Additionally, NEE claims that there is no match between

PNM’s most cost-effective portfolio load & resource table and PNM’s Strategist® runs that

include net present value ("NPV"). NEE Protest, p. 8.

15. PNM Response. The most cost-effective portfolio is a centerpiece of this IRP. The

assertion that it was not identified is without merit, and based on a near-willful misreading of the

document. In response, PNM briefly notes the following:

¯ The 2017 IRP summarizes the most cost-effective portfolio beginning on page 128.

¯ Figure 50 on page 129 illustrates the most cost-effective portfolio capacity additions and

retirements over the twenty year period.

¯ Table 44 shows the loads and resources plan, including each type of generating resource,

for the first 10 years and Table 76 shows the loads and resources plan for the entire 20

years of the most cost-effective portfolio.

¯ The most cost-effective portfolio is provided in Table 128 on page 198 of Appendix M

and all supporting data is included in the accompanying data disk.

16. Emission Rates and Health/Environmental Effects. SWG claims that the 2017

IRP fails to present correct emission rates. SWG Protest, pp. 2, 8, 17-19. CFRE asserts that the

2017 IRP does not acknowledge or evaluate the hazardous health risks of maintaining its coal

and nuclear plants. CFRE Protest, p. 8. NEE also protests and objects to PNM’s 2017 IRP and

its most cost-effective portfolio therein because, allegedly, the IRP fails to properly evaluate

risks to PNM, its customers, and investors due to PNM’s reliance on coal in the face of

environmental regulations. NEE Protest, pp. 17-18.

8
17. PNM Response. The IRP Rule requires that a utility "present emission rates

(expressed in pounds emitted per kilowatt-hour generated) of criteria pollutants as well as carbon

dioxide and mercury." 1.7.3.9(C)(12) NMAC. Contrary to SWG’s claims, the 2017 IRP

correctly includes this information. Table 8 on page 30 of the 2017 IRP shows emissions in

lbs/MWh for NOx, CO, SO2, PM, CO2 and in lbs/TWh for Mercury for facilities in PNM’s

resource portfolio, as required by the IRP Rule. With regard to the issue of health effects and

risks as raised by CFRE and NEE, the EPA’s allowed emission rates and concentrations for

criteria pollutants are developed based on human health and environmental considerations. The

ongoing compliance with the applicable emissions limits set by EPA and state and local

environmental regulatory bodies by the listed facilities demonstrates that the protection of human

health and the environment is addressed as required under the IRP Rule. Additionally, the Palo

Verde Nuclear Generating Station ("PVNGS") is licensed and inspected by the Nuclear

Regulatory Commission. Currently, no new or revised environmental regulations are anticipated

during the planning period. PVNGS does not emit GHGs and uses treated sewer effluent for

cooling water. See, 2017 IRP, pp. 29-33.

18. Resource Replacement. SWG asserts that the 2017 IRP calls to replace the

existing Valencia Energy Facility power purchase agreement ("PPA") between SWG and PNM

that expires in 2028 without proper evaluation. SWG Protest, pp. 5, 8-13. NEE believes that

PNM failed to address or evaluate the cost effectiveness of SJGS, the FCPP and the PVNGS to

determine whether those resources are still economic or useful for its customers, or whether a

portfolio without those resources was more cost-effective for PNM’s customers over the twenty-

year planning period. NEE Protest, p. 4. CFRE asserts that PNM failed to adequately analyze

risks, actively seek the lowest possible price, and compare its recent investments in PVNGS to
alternative resources. CFRE Protest, pp. 6-8. NMIEC argues that the IRP appears to be the result

of a biased predetermined process favoring the phasing out of coal generation NMIEC Protest,

pp. 14-16.

19. PNM Response. As part of the 2017 IRP, PNM put forth the most cost-effective

portfolio to meet PNM’s customers’ energy needs from 2017 through 2036. See, 2017 IRP, pp.

142-149. Contrary to Complainants’ accusations, the 2017 IRP does not identify specific

resource replacements, but instead identifies that the most cost-effective portfolio reduces

customer cost through the replacement of base load resources with resources having lower

operating costs and greater flexibility to produce energy that better matches customers’ projected

energy use. See, 2017 IRP, p. 144. Contrary to SWG’s assertion, the 2017 IRP identifies the

types of resources PNM will need when the Valencia PPA expires in 2028, including a 187 MW

of natural gas-fired peaking resources. See, 2017 IRP, Appendix N, p. 141. This capacity need

could be fulfilled by extending an existing PPA (with Valencia for example) or procuring a new

resource; both would be consistent with the 2017 IRP.

20. For planning purposes, PNM assumed the Valencia PPA ended in 2028 pursuant

to its terms. PNM also assumed that SJGS, FCPP, and PVNGS will continue to provide power

to PNM’s customers pursuant to their existing operating agreements. PNM invited NEE during

the public advisory process to explain why other assumptions would be appropriate, but NEE did

not respond. E.g., Exhibit DVW-C(2) to the Affidavit of David Van Winkle (email exchange

between PNM and NEE in which PNM explains it does not "have a contractual option to exit

[FCPP] before 2031" and asks NEE to provide a basis for its assumption that PNM may exit

earlier.) Most important - and contrary to select Complainants’ allegations of bias in resource

selection - PNM states in the 2017 IRP that the next step following the IRP will be to issue an

10
all-source request for proposals ("RFP"). The RFP will refine the mix of replacement resource

types identified in this IRP (natural gas peaking, renewable energy and, potentially, energy

storage) to specific projects that could be proposed for NMPRC approval in later filings. Bidders

will be free to submit bids for any type and size of resource. See, 2017 IRP, p. 148. PNM’s

commitment to issue an all-source RFP for replacement resources illustrates the most cost-

effective portfolio will be constructed with the best resources compared to the feasible

alternatives.

21. Energy Storage. SWG is concerned that the proposed most cost-effective

portfolio in the 2017 IRP does not include energy storage resources during the twenty-year

planning period or four-year action plan. SWG Protest, p. 8, pp. 23-26. NEE points out that

PNM’s consideration of storage was limited to its sensitivity analysis. NEE Protest, p. 4 and pp.

19-21, Van Winkle Affidavit, p. 6. CFRE observed that PNM should have given consideration

to the rapidly declining prices of battery storage. CFRE Protest, pp. 1, 10.

22. PNM Response. Energy storage is discussed in the 2017 IRP at pages 65-67. This

discussion includes Table 24, which describes nine different energy storage technologies. The

2017 IRP explains that PNM included two versions of battery storage in the capacity expansion

modeling: (1) a 2 MW, two-hour storage battery, and (2) a 40 MW, four-hour battery, with prices

based on recent battery acquisitions in neighboring service territories and verified using the

Electric Power Research Institute’s ("EPRI") cost database. See, 2017 IRP, p. 67. NEE states

PNM "only" conducted a sensitivity analysis related to storage. That sensitivity analysis

included varying sizes and capacity of storage, and analyzed reliability impacts of one or more

storage projects. See, 2017 IRP, pp. 124-125; Appendix O, pp. 201-207. Additionally, the 2017

IRP’s Four-Year Action Plan states PNM will pursue several actions associated with the SJGS

11
abandonment, which includes issuing an all-source request for proposals. As discussed above,

the RFP will refine the mix of replacement resource types identified in this IRP, and energy

storage is an eligible resource option for purposes of this RFP. See, 2017 IRP, p. 148.

23. Rate Impact. NMIEC alleges that the 2017 IRP failed to provide any clear

presentation of the actual rate impact of PNM’s proposals on its customers. NMIEC Protest, pp.

3-6.

24. PNM Response. NMIEC’s allegation fails to recognize that beyond the NPV of

the most cost-effective portfolio, an estimate of annual rate impact is not required by the IRP

Rule and cannot be provided at this time. Consistent with the IRP Rule, 17.7.3.9(g) NMAC, the

2017 IRP identifies the top ranked resource portfolio based on NPV of total utility costs while

meeting loads within reliability requirements, emissions mandates, construction limitations, and

RPS and energy efficiency requirements. See 2017 IRP, p. 94. A comparison of NPVs indicates

the relative rate impact of the various portfolios but identifying the timing and level of rate

changes for individual customers or customer classes is not only beyond the scope of the IRP,

but dependent on the ultimate resource selections approved in CCN and other implementation

proceedings. The IRP Rule makes clear that follow-on proceedings are necessary to implement

actions contained in the IRP; those proceedings are where the rate impact of specific PNM

decisions should be provided and reviewed. Contrary to NMIEC’s claim, nothing in the IRP

"require[s] the abandonment of its.., share of [SJGS] in 2022", FCPP in 2031 or any other

existing plant, or the acquisition of any specific new resource. NMIEC Protest, p. 3.

Implementation of the IRP findings is reserved for later consideration by the Commission.

17.7.3.12(B) NMAC.

12
REQUEST FOR RELIEF

25. Based on the foregoing, PNM respectfully requests that the Commission accept its

2017 IRP as submitted.

Respectfully submitted the 1 lth day of August 2017.

PUBLIC SERVICE COMPANY OF NEW MEXICO

~l~min Phillips, Asso"-c~ate General C’~unsel
Ryan Jerman, Corporate Counsel
PNM Resources, Inc.
Corporate Headquarters - Legal Department
Albuquerque, NM 87158-0805
Phone: (505) 241-4836
Phone: (505) 241-4864
Ben.Phillips@pnmresources.com
Ryan.Jerman@pnmresources.com

Attorneys for Public Service Company of New Mexico
GCG # 523769

13
PNM EXHIBIT 1

Consisting of 6 pages
PNM EXHIBIT 1
Page I of 6

IRP Rules
Table 13. IRP Rules Checklist

9.B.2 current load forecast as described in this rule Overview
9.B.3 load and resources table Overview
9.B.4 identification of resource options Overview
9.B.5 description of the resource and fuel diversity Overview
9.B.6 identification of critical facilities susceptible to supply- Overview
source or other failures
9.B.7 determination of the most cost effective resource portfolio Overview
and alternative portfolios
9.B.8 description of public advisory process Overview
9.B.9 action plan Overview
9.B.10 other information that the utility finds may aid the Overview
commission in reviewing the utility’s planning processes
9.C.1 name(s) and location(s) of utility-owned generation Description of Table 14
facilities; existing resources
9.C.2 rated capacity of utility-owned generation facilities; Description of Table 14
existing resources
9.C.3 fuel type, heat rates, annual capacity factors and Description of Table 14;
availability factors projected for utility-owned generation existing resources Appendix J
facilities over the planning period;
9.C.4 cost information, including capital costs, fixed and variable Description of Appx J
operating and maintenance costs, fuel costs, and existing resources
purchased power costs;
9.C.5 existing generation facilities’ expected retirement dates; Description of Appx J
existing resources
9.C.6 amount of capacity obtained or to be obtained through Description of Table 21
existing purchased power contracts or agreements relied existing resources
upon by the utility, including the fuel type, if known, and
contract duration;
9.C.7 estimated in-service dates for utility-owned generation Description of n/a
facilities for which a certificate of public convenience and existing resources
necessity (CCN) has been granted but which are not in-
service
9.C.8 amount of capacity and, if applicable, energy, provided Description of Existing
annually to the utility pursuant to wheeling agreements and existing resources Transmission
the duration of such wheeling agreements;
9.C.9 description of existing demand-side resources, including Description of Existing
(1) demand-side resources deployed at the time the IRP is existing resources Demand-Side
filed; and (2) demand-side resources approved by the Resources
commission, but not yet deployed at the time the IRP is
filed; information provided concerning existing demand-

43
PNM EXHIBIT 1
Page 2 of 6

)riate, made the demand-side resource;
9.C.10 reserve margin and reserve reliability requirements (e.g. Planning Existing
FERC, power pool, etc.) with which the utility must comply Considerations and Transmission
and the methodology used to calculate its reserve margin existing resources and Appendix
D
9.C.11.a the utility shall report its existing, and under-construction, Planning Existing
transmission facilities of 115 kV and above, including Considerations and Transmission
associated switching stations and terminal facilities; the existing resources and
utility shall specifically identify the location and extent of Appendices D
transfer capability limitations on its transmission network &E
that may affect the future siting of supply-side resources;
9.C.11.b the utility shall describe all transmission planning or Planning Existing
coordination groups to which it is a party, including state Considerations and Transmission
and regional transmission groups, transmission existing resources and Appendix
companies, and coordinating councils with which the utility D
may be associated;
9.C.12 environmental impacts of existing supply-side resources

9.C. 12.a the utility shall provide the percentage of kilowatt-hours Customers Table 2
generated by each fuel used by the utility on its existing
system, for the latest year for which such information is
available
9.C.12.b to the extent feasible, for each existing supply-side Planning Table 8 and
resource on its system, the utility shall present emission Considerations Appendix J
rates (expressed in pounds emitted per kilowatt-hour
generated) of criteria pollutants as well as carbon dioxide
and mercury
9.C.12.c to the extent feasible, for each existing supply-side Description of Appendix J
resource on its system, the utility shall present the water existing resources
consumption rate
9.C.13 a summary of back-up fuel capabilities and options Description of Existing
existing resources Thermal
Resources
9.D.1 The utility shall provide a load forecast for each year of the
planning period; the load forecast shall incorporate the
following information and projections
9.D.l.a annual sales of energy and coincident peak demand on a Customers Appendix A
system-wide basis, by customer class, and disaggregated
among commission jurisdictional sales, FERC jurisdictional
sales, and sales subject to the jurisdiction of other states
9.D.l.b annual coincident peak system losses and the allocation of Customers Load Forecast
such losses to the transmission and distribution and Appendix
components of the system A
9.D.l.c weather normalization adjustments Customers Load Forecast
and Appendix
A
9.D.1 .d assumptions for economic and demographic factors relied Customers Load Forecast
on in load forecasting and Appendix
A

44
PNM EXHIBIT 1
Page 3 of 6

9.D.1 .e expected capacity and energy impacts of existing and Customers Load Forecast
proposed demand-side resources and Appendix
A&N
9.D.l.f typical historic day or week load patterns on a system-wide Customers Append A; n/a
basis for each major customer class by customer
class
9oD.2 The utility shall develop base-case, high-growth and low- Customers Load Forecast
growth forecasts, or an alternative forecast that provides and Appendix
an assessment of uncertainty (e.g., probabilistic A
techniques
9.D.3.a The utility shall explain how the demand-side savings Customers Load Forecast;
attributable to actions other than the utility-sponsored Energy
demand-side resources for each major customer class are Efficiency
accounted for in the utility’s load forecast and the effect, as
appropriate, on its load forecast of the utility-sponsored
demand-side resources on each major customer class
9.D.3.b The utility shall compare the annual forecast of coincident Cu~omeB Appendix A
peak demand and energy sales made by the utility to the
actual coincident peak demand and energy sales
experienced by the utility for the four years preceding the
year in which the plan under consideration is filed. In
addition, the utility shall compare the annual forecast in its
most recently filed resource plan to the annual forecast in
the current resource plan. In its initial IRP filing, the utility
shall provide information demonstrating how well its
forecasts during the preceding four years predicted
demand
9.D.3.c The utility shall explain and document the assumptions, Customers Load Forecast
methodologies, and any other inputs upon which it relied to and Appendix
develop its load forecast A
9.D.1 The utility shall provide a load forecast for each year of the
planning period; the load forecast shall incorporate the
following information and projections
9.E.1 utility-owned generation L&R Table Appendix N
9.E.2 existing and future contracted-for purchased power L&R Table Appendix N
including qualifying facility purchases
9.E.3 purchases through net metedng programs, as appropriate L&R Table Appendix N
9.E.4 demand-side resources, as appropriate L&R Table Appendix N
9.E.5 other resources relied upon by the utility, such as pooling, L&R Table Appendix N
wheeling, or coordination agreements effective at the time
the plan is filed
9.F.1 In identifying additional resource options, the utility shall Potential Resource Appendix K
consider all feasible supply-side and demand-side Additions
resources. The utility shall describe in its plan those
resources it evaluated for selection to its portfolio and the
assumptions and methodologies used in evaluating its
resource options, including, as applicable: life expectancy
of the resources, the recognition of whether the resource is
replacing/adding capacity or energy, dispatchability, lead-
time requirements, flexibility and efficiency of the resource.

45
PNM EXHIBIT 1
Page 4 of 6

9.F.2 For supply-side resource options, the utility shall identify Potential Resource Appendix K
the assumptions actually used for capital costs, fixed and Additions
variable operating and maintenance costs, fuel costs
forecast by year, and purchased power demand and
energy charges forecast by year, fuel type, heat rates,
annual capacity factors, availability factors and, to the
extent feasible, emission rates (expressed in pounds
emitted per kilowatt-hour generated) of criteria pollutants
as well as carbon dioxide and mercury
9.F.3 The utility shall describe its existing rates and tariffs that Customers; Existing
incorporate load management or load shifting concepts. Description of Demand-Side
The utility shall also describe how changes in rate design Existing Resources; Resources
might assist in meeting, delaying or avoiding the need for
new capacity
9.G.1 To identify the most cost-effective resource portfolio, Analysis Results; ApperJdix L &
utilities shall evaluate all feasible supply and demand-side Determination of M
resource options on a consistent and comparable basis, MCEP
and take into consideration risk and uncertainty (including
but not limited to financial, competitive, reliability,
operational, fuel supply, price volatility and anticipated
environmental regulation). The utility shall evaluate the
cost of each resource through its projected life with a life-
cycle or similar analysis. The utility shall also consider and
describe ways to mitigate ratepayer risk
9.G.2 Each electric utility shall provide a summary of how the
following factors were considered in, or affected, the
development of resource portfolios
9.G.2.a load management and energy efficiency requirements Analysis Results; Appendix L &
Determination of M
MCEP
9.G.2.b renewable energy portfolio requirements Analysis Results; Appendix L &
Determination of M
MCEP
9.G.2.c existing and anticipated environmental laws and Analysis Results; Appendix L &
regulations, and, if determined by the commission, the Determination of M
standardized cost of carbon emissions MCEP
9.G.2.d fuel diversity Analysis Results; Appendix L &
Determination of M
MCEP
9.G.2.e susceptibility to fuel interdependencies Analysis Results; Appendix L &
Determination of M
MCEP
9.G.2.f transmission constraints Analysis Results; Appendix L &
Determination of M
MCEP
9.G.2.g system reliability and planning reserve margin Analysis Results; Appendix L &
requirements Determination of M
MCEP
9.G.3 Alternative portfolios. In addition to the detailed description Analysis Results; Appendix L &
of what the utility determines to be the most cost-effective Determination of M
resource portfolio, the utility shall develop a reasonable MCEP
number of alternative portfolios by altering risk
assumptions and other parameters developed by the utility

46
PNM EXHIBIT 1
Page 5 of 6

and the public advisory process.

9.H.1 The utility shall initiate the process by providing notice at Public Advisory
least 30 days prior to the first scheduled meeting to the Process
commission, interveners in its most recent general rate
case, and participants in its most recent renewable energy,
energy efficiency and IRP proceedings; the utility shall at
the same time, also publish this notice in a newspaper of
general circulation in every county which it~ serves and in
the utility’s b{llin9 inserts
9.H.l.a a brief description of the IRP process Public Advisory
Process
9.H.l.b time, date and location of the first meeting Public Advisory
Process
9.H.l.c a statement that interested individuals should notify the Public Advisory
utility of their interest in participating in the process Process
9.H.l.d utility contact information Public Advisory
Process
9.H.2 Upon receipt of the initial notice, the commission may Public Advisory
designate a facilitator to assist the participants with dispute Process
resolution
9.H.3 The utility or its designee shall chair the public participation Public Advisory
process, schedule meetings, and develop agendas for Process
these meetings. With adequate notice to the utility,
participants shall be allowed to place items on the agenda
of public participation process meetings
9.H.4 Meetings held as part of the public participation process Public Advisory
shall be noticed and scheduled on a regular basis and Process
shall be open to members of the public who shall be heard
and their input considered as part of the public participation
process. Upon request, the utility shall provide an
executive summary containing a non-technical description
of its most recent IRP
9.H.5 The purposes of the public participation process are for the Public Advisory
utility to provide information to, and receive and consider Process
input from, the public regarding the development of its IRP.
Topics to be discussed as part of the public participation
process include, but are not limited to, the utiiity’s load
forecast; evaluation of existing supply- and demand-side
resources; the assessment of need for additional
resources; identification of resource options; modeling and
risk assumptions and the cost and general attributes of
potential additional resources; and development of the
most cost-effective portfolio of resources for the utility’s
IRP
9.H.6 In its initial IRP advisory process, the utility and Public Advisory
participants shall explore a procedure to coordinate the Process
IRP process with renewable energy procurement plans
and energy efficiency and load management program
proposals. Any proposed procedure shall be designed to
conserve commission, participant and utility resources and
shall indicate what, if any, variances may be needed to
effectuate the proposed procedure

47
PNM EXHIBIT 1
Page 6 of 6

9.1.1 The utility’s action plan shall detail the specific actions the Executive Summary Four Year
utility will take to implement the integrated resource plan Action Plan
spanning a four-year period following the filing of the
utility’s IRP. The action plan will include a status report of
the specific actions contained in the previous action plan.
9.1.2 An action plan does not replace or supplant any Executive Summary Four Year
requirements for applications for approval of resource Action Plan
additions set forth in New Mexico law or commission
regulations

48
BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION

IN THE MATTER OF PROTEST TO PNM’S )
2017 INTEGRATED RESOURCE PLAN ) Case No. 17-00174-UT
)
CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the Consolidated Response of Public Service
Company of New Mexico to Protests to 2017 Integrated Resource Plan was e-mailed to the
parties identified below and was hand-delivered to the parties designated for hand-delivery
identified below on August 11, 2017:

HAND DELIVERED: HAND DELIVERED:
Honorable Vice-Chair Cynthia B. Hall Honorable Commissioner Patrick H. Lyons
NMPRC NMPRC
1120 Paseo de Peralta 1120 Paseo de Peralta
Santa Fe, NM 87504 Santa Fe, NM 87504
Cynthia.Hall@state.nm.us Patrick.Lyons@state.nm.us

HAND DELIVERED: HAND DELIVERED:
Honorable Commissioner Valerie Espinoza Honorable Chair Sandy Jones
NMPRC NMPRC
1120 Paseo de Peralta 1120 Paseo de Peralta
Santa Fe, NM 87504 Santa Fe, NM 87504
Valerie.Espinoza@state.nm.us Sandy.Jones@state.nm.us

HAND DELIVERED: HAND DELIVERED:
Honorable Commissioner Lynda Lovejoy Charles Gunter
NMPRC NMPRC
1120 Paseo de Peralta 1120 Paseo de Peralta
Santa Fe, NM 87504 Santa Fe, NM 87504
Lynda.Lovej o¥@state.nm.us Charles.Gunter@state.nm.us

HAND DELIVERED: HAND DELIVERED:
Cydney Beadles Jack Sidler
NMPRC NMPRC
1120 Paseo de Peralta 1120 Paseo de Peralta
Santa Fe, NM 87504 Santa Fe, NM 87504
Cydne¥.beadles@state.nm.us Jack.Sidler@state.nm.us

HAND DELIVERED: HAND DELIVERED:
Michael C. Smith John Reynolds
NMPRC NMPRC
1120 Paseo de Peralta 1120 Paseo de Peralta
Santa Fe, NM 87504 Santa Fe, NM 87504
MichaelC. Smith@state.nm.us John.Revnolds@state.nm.us
HAND DELIVERED: HAND DELIVERED:
Sarah Becker Heidi Pitts
NMPRC NMPRC
1120 Paseo de Peralta 1120 Paseo de Peralta
Santa Fe, NM 87504 Santa Fe, NM 87504
Sarah.Becker@state.nm.us Heidi.pitts@state.nm.us

HAND DELIVERED: HAND DELIVERED:
Vincent DeCesare Anthony Sisneros
NMPRC NMPRC
1120 Paseo de Peralta 1120 Paseo de Peralta
Santa Fe, NM 87504 Santa Fe, NM 87504
Vincent.decesare@state.nm.us Anthony.Sisneros@state.nm.us

HAND DELIVERED: HAND DELIVERED:
Elisha Leyba-Tercero Bill Garcia
NMPRC NMPRC
1120 Paseo de Peralta 1120 Paseo de Peralta
Santa Fe, NM 87504 Santa Fe, NM 87504
Elisha.leyba-tercero@state.m.us Bill.Garcia@state.nm.us

EMAIL ONLY:

Benjamin Phillips, Esq. Joseph Yar
Ben.Phillips@pnmresources.com jyar@nmag.gov
aarmijo@nmag.~ov

Nann M. Winter, Esq. Kevin Higgins
nwinter@stelznertaw.com khi~gins@energystrat.com

Ryan Anderson Joe Herz
Ryan.Anderson@pnm.com jaherz@sawvel.com

Steven S. Michel Shannon A. Parden
smichel@westernresources.org Sparden@rmjfirm.com
Jim Dittmer Kurt J. Boehm, Esq.
jdittmer@utilitech.net Jody Kyler Cohn, Esq.
kboehm@bkllawfirm.com
jkylercohn@BKLlawfirm.com

Peter J. Gould, Esq. Dahl Harris
pgouldlaw@gmail.com dahlharris@hotmail.com

Charles F. Noble Bruce C. Throne
Noble.ccae@grnail.com bthroneatW@newmexico.com

2
GCG# 523766
Jason Marks, Esq. Rick Alvidrez
lawoffiee@j asonmarks.eom ralvidrez@mstlaw.com

Robert H. Clark Jeffrey H. Albright, Attorney
rclark@mstlaw.com JAlbright@lrrc.com

William P. Templeman, Esq. Justin Lesky, Esq.
wtempleman@cmtisantafe.com j leskv@leskylawoffice.com

Mariel Nanasi Mark K. Adams
mariel@seedsbeneaththesnow.org mkadams@rodev.com

Todd Hixon Thomas Manning
THixon@tep.com cfrecleanenergv@yahoo.com

Andrea Crane Bobbie J. Collins, Attorney
ctcolumbia@aol.com BCollins@lrrc.com

Michael I. Garcia Steve W. Chriss
mikgarcia@bemco, gov Stephen.chriss@wal-mart.com

Lisa V. Perry Grieta G. Gilchrist
LPerry@rqn.com ggilchrist@rmifirm.com

Jane Yee Tony A. Gurule
j~cee@cabq.gov TGurule@cabq.gov

Eva Taylor Nikki Joseph
Evata¥1or@cabq.gov Njoseph@cabq.gov

Richard C. Mertz Patrick T. Ortiz, Esq.
Rcmertz7@outlook.com Portiz@cuddymccarthy.com
Erin Overturf, Esq. Lisa Tormoen Hickey
Erin.overturf@westernresources.org lisahickey@newlawgroup~com

Donald E. Gruenemeyer, P.E. Louis W. Rose
degruen@sawvel.com Randy S. Bartell
Irose@montand.com
rbartell@montand.com

Steven Gross Martin R. Hopper
gross@~portersimon.com mhopper@msrpower.org

Daniel R. Dolan Rachel Brown
dan@lobo.net rabrown@santafecountvnm.gov

3
GCG# 523766
Marcos Martinez Mark Fenton
mdmartinez@santafenm, gov Mark.Femon@pnm.com

Raymond L. Gifford Debrea Terwilliger
rgifford@wbklaw.com dterwilliger@wbklaw.com

Amanda Edwards Ryan Jerman
AEdwards@lrrc.com Ryan.Jerman@pnmresources.com

Carey Salaz Cholla Khoury
Carey.Salaz@pnm.com ckhourT@nmag.gov

Loretta Baca Brian J. Haverly, Esq.
LBaca@lrrc.com bj h@keleher-law.com

Glenda Murphy Milo Chavez
~murp_ hv@westernresources.org Milo.Chavez@state.nm.us

David Van Winkle Megan A. O’Reilly
david@vw77.com arcresearchandanalysis@gmail.com

James R. Dauphinais Thomas Domme
jdauphinais@consultbai.com tdomme@tecoenergy.com

Clyde F. Worthen, Esq. Rebecca Carter
cfw@keleher-law.com racarter@teconenergy.com

Doug Gegax Don Hancock
dRe~ax@nmus.edu sricdon@earthlink.net

Ramona Blaber Noah Long
Ramona.blaber@sierraclub.org nlong@nrdc.org

Adam Bickford Jennifer Hall
abickford@swenergy.org ihall@mstlaw.com

Ralph Cavanagh Peter Auh, General Counsel
rcavanagh@nrdc.org pauh@abcwua.org

Becky Wenk Steve Schwebke
Becky.Wenk@pnm.com Steven. Schwebke@pnm.com

Patrick Luckow Travis Ritchie
PLuckow@synapse-energy.com Travis.ritchie@sierraclub.or~

Travis Blecha Dave Effross
Travis.Blecha@state.nm.us Dave.effross@westernresources.org

4
GCG# 523 766
Briana Trujillo Nick Schiavo
BrianaG.Trujillo@state.nm.us naschiavo@santafenm, gov

Charles Kolberg Tom Singer
ckolberg@abcwua.org Singer@westemlaw.org

Camilla Feibelman Nellis Howard
Camilla.feibelman@sierraclub.org Nellis.khoward@sierraclub.or~

Megan Anderson Michael Dirmeier
Anderson@westernlaw.org mdirmeie@gmail.com

Sarah Cottrell Propst John W. Boyd
propst@interwest.org jwb@fdblaw.com

Josh Ewing John M. Stomp II
je@fbdlaw.com jstomp@abcwua.org

Rob Witwer David Rhodes
witwerr@southwestgen.com rhodesd@southwestgen.com

Maurice Brubaker Brogan Sullivan
mbrubaker@consultbai.com Brogan.sullivan@huschblackwell.com

REIA of NM State Senator William Sharer
prcaction@reia-nm.org bill@williamsharer .com

State Senator Steve Neville Representative Rod Montoya
steven.neville@nmlegis.gov roddmontoya@gmail.com

Representative James Strickler Representative Paul Bandy
j amesstrickler@msn.com paul@paulband¥.org

Representative Sharon Clahchischilliage Representative Patricia A. Lundstrom
sharon.clahchischill@nmlegis.gov Patricia.lundstrom@nmlegis.gov

Senator Carlos Cisneros
carlos.cisneros@nmlegis.gov

MAIL ONLY:

Public Utilities Director City Attorney’s Office
City of Santa Fe City of Santa Fe
801 West San Mateo P. O. Box 909
Santa Fe, NM 87505 Santa Fe, NM 87501

5
GCG# 523766
Dated this 11th day of August, 2017.

By:

enior Project Manager - Regulatory
Public Service Company of New Mexico

6
GCG# 523766