https://wordpress.com/post/silvercityburro.com/1247
By Peter Burrows 9/26/24
Public service of New Mexico, PNM, last July sent out a 36-page notice outlining their recent request for a rate increase. I only glanced briefly at it and noticed on page 2 that the requested increase would raise overall rates 23% in two stages, July 1, 2025, and January 1, 2026.
I recently had a chance to look at the notice in more detail and found on page 29 that residential customers who use between 500 kilowatt hours (kWh) and 1,000 kWh per month can expect their monthly bills to go up between 36.6 and 39.0 percent. Seems to me those are the more relevant numbers that PNM should have used.
The average New Mexico resident uses 975 kWh per month (1) and on page 2, PNM estimates a customer with average monthly usage of 600 kWh, decidedly at the low end of residential use, can expect a $23.60 increase in their January 2026 bill. Residents with a more typical usage of 900 kWh would suffer a $35.40 monthly increase. Another little sleight-of-hand from PNM, don't you think?
On page 4, we find out, if WE do the calculation, that 47.12% of the increase in our bills will be to pay for ESAs, which stands for energy storage agreements (ESA), which in this case is for utility-scale batteries.
I've been wondering when the bill for batteries would start to show up. New Mexico's legislators in 2019 passed the Energy Transition Act which requires New Mexico's electric utilities to reduce CO2 emissions to zero by 2050, "as long as safety, reliability and impacts to customer bills are considered." PNM said they can do this for electric generation by 2040. (2)
This is to be done without nuclear power which puts the burden on solar panels and wind turbines. The best we can expect from solar panels is that they produce electricity about 35% of the time, and the best we can expect for wind turbines is maybe 40%. If these two sources were perfectly complementary, they would provide, on average, 75% of our electricity.
In the real world, the best we can expect from wind and solar on a typical sunny New Mexico day is maybe 50%, and there will be days when that's much lower, 15 to 20% or even zero. The unavoidable reality is that wind and solar can't directly produce all the electricity we need 24/7, so where does the rest come from?
For now, batteries are PNM's answer, but the cost of sufficient batteries is so ridiculously high that it won't be too many years before the zero-emission timetable is either abandoned or we stop using solar/wind/batteries to achieve zero electric power plant emissions. In other words, reality, in the form of "impacts to customer bills" is going to assert itself. Let me explain why.
The batteries we will be paying for in this rate increase will produce 48 megawatt hours of electricity and is the first of many battery installations required by 2034. You may have missed it, I did, in March 2023 New Mexico passed a bill directing investor-owned utilities (IOUs) to have 7 gigawatt hours of energy storage online by 2034 (3)
Seven gigawatts is 7,000 megawatts. PNM's share of the investor-owned utility market is roughly 70 percent (5), or 4,900 megawatts. This rate increase pays for only 48 of those 4,900 megawatts. Thus, we can look forward to an additional 102 such rate increases (4,900 divided by 48, minus the one we are now getting.)
As noted above, a typical resident using 900 kWh per month will see, by January 1, 2026, a monthly increase in their electricity bill of $35.40, of which 47.12 percent is to pay for the batteries, or $16.68. Multiply $16.68 by 102 and by 2034 the cost of batteries will add another $1,702 to PNM's average residential MONTHLY electricity bill.
That is not going to happen.
While these numbers may come as a shock, years ago Bill Gates said the cost of going to wind and solar electricity would be "beyond astronomical" because of storage costs. (4) To illustrate how that applies to New Mexico, in January of 2024 electricity consumption in New Mexico was 2,454 GWh.(6) If batteries were to supply just 25% of that, the above assumed minimum, that would be 614 GWh of which roughly 50%, 307 GWh, would be required of IOUs vs. only 7 GWh mandated by the state.
It may not be "beyond astronomical," but the 307 GWh that would be needed, at a minimum, is about 44X the 7 GWh now mandated. This means the already ridiculous monthly residential bill of $1,700 for 7 GWh of storage would grow to about $74,800 per month. That's to supply just 25% of our electricity for when the sun doesn't shine and the wind doesn't blow.
A more realistic figure, as shown by the experience of Germany and other nations trying to convert to renewable energy, is 50%, which would raise our monthly PNM bill to almost $150,000 per month.
Bottom line: Bill Gates was right.
Do the numbers for yourself (Please!) and, hopefully, you'll find I've made an egregious error or two and my cost estimate is 10 times too high, ergo only $1500 a month. What a relief!!
I have no doubt PNM has known the math for some time. After all, not only is this their business, but since 2011 PNM has been running an experimental energy storage project called Prosperity Energy Storage. Here's how PNM describes it: "The PNM Prosperity Energy Storage Project is the nation's first solar storage facility fully integrated into a utility power grid and uses smart grid technology to advance renewable energy." (Google: PNM Prosperity Energy Storage Project)
One has to question why the executives at PNM haven't attempted to enlighten our legislators on the impossibility of using solar/wind/batteries to reliably supply adequate, affordable, electricity. It's possible they don't want the public to know the cost because the public might then not do what's necessary to save the world from CO2 emissions. Making electricity unaffordable is, in the long run, in the public's best interest, whether the stupid public knows it or not.
There are some who agree with that, but I doubt the management of PNM does. I think they know the whole wind/solar-push is a big scam, but they're going to play along with the politicians and environmentalists because that's going to be good for PNM's bottom line. The tip off was when PNM agreed to stop buying power from the Palo Verde nuclear power plant. Nuclear power is the only way to reduce CO2 emissions without destroying the economy.
PNM knows that, but adding solar panels, wind turbines and batteries to replace nuclear, coal and natural gas will require billions in new investment and add significantly to PNM's earnings. Since raising billions would be difficult in little New Mexico, why not hype New Mexico's potential as a great solar factory, and then sell PNM to a large international corporation? That would give shareholders a nice profit and millions in stock-option profits for PNM's execs.
By the time reality replaced fantasy, those executives would be comfortably retired in Florida, enjoying reliable, affordable electricity, unlike the poor slobs back in New Mexico. If that was the plan, it was working brilliantly until the environmentalists, for totally irrelevant reasons, persuaded the Public Regulatory Commission to put a halt to the acquisition of PNM by Avangrid, the U.S. subsidiary of international utility giant Iberdrola.
None of this mess would have occurred without government subsidies for solar and wind generated electricity. When the cost of batteries starts to kick in, most of the investment in solar and wind will be written off as useless. I hope the public blames the politicians, but since it seems most people haven't awakened to the fact that solar panels don't produce electricity at night, I'm afraid the political class will deflect the blame onto the utilities.
Since the electric utility industry hasn't fought "renewable energy" mandates as the senseless and expensive boondoggle they are, maybe that's where it belongs.
1) https://www.energysage.com/local-data/electricity-cost/nm/
2)https://www.nmlegis.gov/handouts/NMFA%20091820%20Item%201%20NM%20Energy%20Transition%20Act.pdf
5) https://gridworks.org/wp-content/uploads/2022/05/NM-IOUs-TEP-Presentation_4.27.22_Dft.1.pptx.pdf
6) https://www.emnrd.nm.gov/ecmd/wp-content/uploads/sites/3/JAN-24-New-Mexico-EIA-Data.pdf = 2024 January gWh 2454 + 5% from 2023's 2344. Jan 2024 x 12 = 2454 x 12 = 29,448 GWh estimate for all of 2024.
