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New Mexico approves contracts to supply Facebook with 267 MW of renewables

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New Mexico approves contracts to supply Facebook with 267 MW of renewables

New Mexico utility regulators on March 21 approved three renewable energy power purchase agreements for a PNM Resources Inc. subsidiary to serve Facebook Inc.'s $1 billion data center under construction in Los Lunas, N.M.

The state Public Regulation Commission approved contracts for Public Service Co. of New Mexico to purchase 267 MW of wind, solar and storage to supply the social media company for the next 20 to 25 years. Facebook must pay all costs of the renewable energy procurement.

PNM has signed 25-year power purchase agreements with NextEra Energy Inc. for 50 MW of capacity and energy plus 1 MW of battery storage at the Casa Mesa Wind Project under development in Quay County, N.M, and 50 MW of capacity and energy from NextEra's Route 66 Solar Energy Center in Cibola County, N.M., and due in operation by the end of 2021.

PNM also contracted with Avangrid Inc. subsidiary Avangrid Renewables LLC for 166 MW of capacity and associated wind energy over 20 years from the La Joya Wind Plant under development in Socorro County, N.M.

The commission had already approved three 25-year power purchase agreements in 2016 for PNM to purchase 60 MW generated by three solar facilities for Facebook's data center because the company wanted to run its new facility entirely with green energy. Then, Facebook subsequently announced it wanted to triple the size of the center to nearly 3 million square feet, so it needed more renewable energy.

The commission decided to issue a final order and close the case, turning back Citizens for Fair Rates and Environment Director Thomas Manning's effort to keep the proceeding open for the PRC to address his group's concerns whether the variable renewable energy projects for Facebook would saddle other ratepayers with costs of maintaining grid system reliability.

Manning argued PNM had not addressed his question whether dispatchable resources, such as gas-fired generation, would be needed for the utility to add more renewable resources in the future beyond those solar and wind facilities Facebook agreed to pay PNM to add for its data center.

The commissioners concluded that question was beyond the scope of the Facebook case. PRC Associate General Counsel Russell Fisk advised that Manning's group may intervene in PNM's future rate cases to address reliability cost concerns.

A final order was not immediately available March 21 but will closely resemble a proposed order PNM filed for the commission's consideration, Fisk told the commissioners. (New Mexico PRC Case No. 18-00009-UT)