The tables below display the data from two investor-owned utilities (IOUs) in New Mexico that reported having Demand Response Programs to the U.S. Energy Information Administration in 2018. In the case of PNM, residential customers may opt into a program that allows the utility to turn off customers’ air conditioning units during peak demand times. Customers who participate, therefore, give up control over their air conditioning units for a few afternoons per year for a small cost savings incentive.
New Mexico Demand Response Program Enrollment (2018)
|Number of Customers Enrolled||Energy Savings (MWh)|
|Public Service Co of New Mexico||37131||6592||110||43833||464||91||509||1064|
|Southwestern Public Service Co||4888||0||0||4888||4||0||0||4|
|Potential Peak Demand Savings (MW)||Actual Peak Demand Savings (MW)|
|Public Service Co of New Mexico||33.1||8.7||21||62.8||32.6||8||15.2||55.8|
|Southwestern Public Service Co||5.5||0||0||5.5||2.3||0||0||2.3|
Potential peak demand savings refers to the total demand savings that could occur at the time of the system peak hour assuming all demand response is called. Actual peak demand savings is demand reduction actually achieved by demand response activities and is measured at the time of the company’s annual system peak hour.
Source: 2018 EIA 861 Annual Electric Power Industry Report.
As electric utilities in New Mexico shift to more variable renewable electric generation, the need for demand management grows, which means new incentive programs are being reviewed and rolled out nationwide to maintain the balance between electric generation and demand. Some utilities vary rates seasonally, some vary rates daily, and some, such as PNM have four different rates based on time-of-day and season. In addition, the differences in rates vary, producing potential savings per 500 kWh, ranging from $30.50 to $68.38. Savings depend on customers being educated about Time of Use rates and able to take advantage of off-peak times for all energy consumption.
To take advantage of many of these incentive programs and Time of Use rates, the customer must be able to manage their demand. This is achievable, by either manually controlling consumption at specific times of the day or through the use of automated control devices such as smart thermostats, electric vehicle charging applications, industrial or commercial demand management systems, or other control systems (large or small) that can vary the consumers load to maximize cost savings.
A new building energy code went into effect March 25, 2021. Builders will now need to comply with the requirements of the 2018 International Energy Conservation Code (2018 IECC) and New Mexico Construction Industries Commission Amendments.
The 2018 IECC energy code will save ($3) for every dollar ($1) invested. A single-family home will save an average of $402 in annual energy costs when compared to the requirement of the old 2009 New Mexico energy code based on a study conducted by the Pacific Northwest National Laboratory (PNNL). Commercial building owners will save from $5.89 to $37.47 for every ($1) invested based on the same PNNL study.
Updating to the 2018 IECC energy code was one of the objectives of Executive Order 2019-003 to achieve a statewide reduction in greenhouse gas emissions of at least 45% by 2030 as compared to 2005 levels. Adopting the 2018 IECC will reduce greenhouse gases by over 27,000 tons of carbon dioxide per year based on the PNNL study.
EMNRD, in collaboration with higher education institutions and the New Mexico Regulation and Licensing Department’s Construction Industries Division (CID), will provide training for builders and code officials through 2021. Builders will learn how to use the Bypass Checklist and how to conduct a Blower Door and Duct Blaster Test. Training will include a mix of live instruction and short video clips from the field for discussion. The training will be available online. Successful participants will receive a certificate for completing the course. Three classes will be offered before June 30th and additional classes will be offered until December 31st.
Energy Savings Performance Contracts
The Department of Energy defines a net-zero building as a building that “produces enough renewable energy to meet its own annual energy consumption requirements, thereby reducing the use of non-renewable energy in the building sector.” The first step towards this goal is to understand and minimize the total energy usage of the facility, whether this is a new building or an existing building. Energy efficient systems can be funded in partnership with an Energy Service Company (ESCO) in the form of a Guaranteed Energy Savings Performance Contract (ESPC). The ESCO conducts a comprehensive facility energy audit and identifies options for capital improvements to save energy. Taken together, these capital improvements can lower the overall energy consumption of a facility. The ESCO designs, constructs, and arranges financing for the project, and the facility owner repays the ESCO through energy cost savings over the term of the contract. After the end of the contract, cost savings accrue to the facility owner.
ECMD has approved thirty-five Guaranteed Energy Savings Performance Contracts (GESPC) totaling more than $250 million in project investment since 2013. This program has been utilized by local governments (17 projects), the Higher Education Department (10 projects), K-12 schools (4 projects), and other government agencies (4 projects). These projects have resulted in more than $11.5 million in annual savings to State entities while reducing the total utility consumption an average of 31.9% per project. These projects also deployed renewable energy generation totaling more than 20 million kWh of electricity. ECMD has also approved two microgrid projects that will provide power to a community college and a State Park. ECMD will proudly continue to provide technical assistance to any State entity that inquiries about reducing their energy consumption.
State Price Agreements:
Financial Resiliency through Energy Efficiency
In 2019, ECMD was awarded a grant from the U.S. Department of Energy titled Financial Resiliency through Energy Efficiency (FREE). This grant funded the development of a systems dynamic model of the state of New Mexico. This model examines interactions between supply and demand of energy, environmental factors, energy use in the electricity sector, and revenue impacts over time. The model includes four stylized energy efficiency programs targeting residential customers to show what the impact of these programs would be. Results are aggregated and reported at the New Mexico Council of Governments district level. The below diagram gives a high-level overview of the interactions in the model:
The model was completed in March of 2021.
During the next stage of the grant, ECMD will conduct 8 virtual stakeholder meetings around the state. In these meetings, the results from the model will be presented with a focus on regional impacts, and stakeholders can ask questions or raise concerns. A key takeaway from these meetings will be any barriers that stakeholders foresee (regulatory or otherwise) with pursuing any of these programs with a legislative agenda.
The report derived from the stakeholder meeting will serve as a guide to pursing a legislative agenda around energy efficiency.