PNM added that the Commission has also approved a plan to build a one-half megawatt solar power and storage demonstration project that is partially funded by a grant from the U.S. Department of Energy. However, the companys initial proposal to add 80 MW of solar power, including 45 megawatts of utility-scale facilities, was rejected.
It has been said that PNM plans to file for recovery of those costs through a rate rider that would be implemented one year after new PNM rates – currently under consideration – are effective. Costs incurred by a New Mexico utility that are consistent with an approved renewable energy plan are deemed reasonable and recoverable in rates under state law, said the company.
The solar addition to PNM’s rate base and subsequent recovery is expected add approximately USD$0.03 to USD$0.05 to earnings per diluted share in 2012.
"We are pleased that the Commission recognized the significance of adding renewable energy to our existing generation resources," said Pat Vincent-Collawn, PNM Resources president and CEO. "Our industry, along with regulators, needs to continue to look for ways to add renewable power while balancing the cost impact to consumers. This is the first step toward achieving that goal and meeting the state’s requirement to diversify our energy resources."
New Mexico law requires PNM and other electric utilities to have 10 percent of the energy they generate come from renewable resources such as wind and solar by next year.