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

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