PNM Resources : Direct Testimony of Laura Sanchez- policy witness, stakeholder outreach, evaluation metrics, IIJA funding;

BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION

IN THE MATTER OF PUBLIC SERVICE COMPANY OF	)
NEW MEXICO'S APPLICATION FOR AUTHORIZATION )
TO IMPLEMENT GRID MODERNIZATION	)
COMPONENTS THAT INCLUDE ADVANCED	) Case No. 22-00058-UT
METERING INFRASTRUCTURE AND APPLICATION	)
TO RECOVER THE ASSOCIATED COSTS THROUGH	)
A RIDER, ISSUANCE OF RELATED ACCOUNTING	)
ORDERS, AND OTHER ASSOCIATED RELIEF	)

_______________________________________________________

DIRECT TESTIMONY

OF

LAURA E. SANCHEZ

October 3, 2022

	NMPRC CASE NO. 22-00058-UT
	INDEX TO THE DIRECT TESTIMONY OF
	LAURA E. SANCHEZ
	WITNESS FOR
	PUBLIC SERVICE COMPANY OF NEW MEXICO
I.	INTRODUCTION AND PURPOSE ......................................................................	1
II. PNM'S GRID MODERNIZATION STRATEGY ...............................................	13

1. OVERVIEW OF PNM'S GRID MODERNIZATION APPLICATION AND PLAN
   ............................................................................................................................... 19

IV.	OVERVIEW OF CUSTOMER BENEFITS.........................................................	23
V.	THE GRID MOD STATUTE...............................................................................	26
VI.	OVERVIEW OF COST ESTIMATE AND RECOVERY...................................	35
VII.	STAKEHOLDER OUTREACH...........................................................................	36
VI.	OTHER ISSUES...................................................................................................	39

PNM Exhibit LES-1 Resume

PNM Exhibit LES-2 EnerNex's Guide for PNM's Grid Modernization Implementation PNM Exhibit LES-3 PNM's Grid Modernization Implementation Plan

PNM Exhibit LES-4Low-Income GIS Tracts Using 2020 Census Data

PNM Exhibit LES-5 Explanation of the Environmental Justice Screening Tool PNM Exhibit LES-6 PNM's Grid Modernization Evaluation Metrics

PNM Exhibit LES-7 Table of Stakeholder Meetings

PNM Exhibit LES-8 Table of Government, Community and Business Outreach

PNM Exhibit LES-9 Table of Questions from Recommended Decision in Case No. 15-00312-UT PNM Exhibit LES-10 Estimated Grid Mod Program Management Office Costs Self-Verification

i

DIRECT TESTIMONY

OF LAURA E. SANCHEZ

NMPRC CASE NO. 22-00058-UT

1	I. INTRODUCTION AND PURPOSE

1. Q. PLEASE STATE YOUR NAME, POSITION AND BUSINESS ADDRESS.
2. A. My name is Laura E. Sanchez. I am the Chief Policy and Legal Advisor for PNM
3. Resources, Inc. ("PNMR") and am employed by PNMR Services Company. My testimony
4. is submitted on behalf of Public Service Company of New Mexico ("PNM" or the
5. "Company"), a public utility subsidiary of PNMR. My business address is 414 Silver Ave.
6. SW, Albuquerque, New Mexico 87102.

8

1. Q. WHY IS GRID MODERNIZATION AN IMPORTANT NEXT STEP FOR PNM?
2. A. Ensuring that electricity service remains reliable, resilient, and secure while transitioning
3. to carbon-free generation is a key policy objective for PNM. PNM's internal policies are
4. driving toward a carbon-free transition by 2040, ahead of state law.1 The New Mexico
5. Legislature-alsorecognizing the need for definitive and significant change to enable the
6. transition to carbon-free-passed legislation that ensures reliability, enables carbon free
7. resources, and enhances customer service, all while providing for a financially sound
8. utility. To capture these objectives, state law authorizes utilities to invest in grid
9. modernization projects to transition the grid to capture the public benefits that come from
10. clean energy and to enable customer participation and choices for clean energy. Customers
11. will benefit from this transition. PNM's plans for grid modernization ensure that customers

1 New Mexico's Energy Transition Act requires PNM to supply 100% percent of all retail sales of electricity in New Mexico from zero carbon resources by January 1, 2045. NMSA 1978, § 62-16-4(A)(6) (2019). By January 1, 2040, no less than 80 percent of all retail sales of electricity in New Mexico are to be supplied through renewable energy resources. See Section 62-16-4(A)(5).

1

DIRECT TESTIMONY

OF LAURA E. SANCHEZ

NMPRC CASE NO. 22-00058-UT

1. are a top priority and will benefit consistent with the Grid Modernization Statute, NMSA
2. 1978, Section 62-8-13 ("Grid Mod Statute" or "Statute").2

3

1. Q. HOW HAS PNM ACCOUNTED FOR CUSTOMER INTERESTS IN THIS
2. FILING?
3. A. A key objective of PNM's grid modernization effort is to ensure that its customers
4. experience tangible benefits and new opportunities in alignment with stated customer
5. priorities. To accomplish this objective, PNM has engaged in a multifaceted process to
6. understand what customers want and to consider constructive feedback from stakeholders.3
7. Specifically, PNM undertook an approximately 20-month engagement process, holding
8. customer and stakeholder meetings to receive input and understand customer priorities and
9. answer stakeholder concerns. Based on this feedback, PNM's grid modernization plan
10. focuses on:
11. • equitable access to a modern electric grid for all customers, particularly low-income

15customers;

1. • enhanced customer reliability and resiliency;
2. • faster and more efficient integration of carbon-free resources, including behind-the-

18	meter distributed energy resources ("DERs"); and

1. The Grid Mod Statute specifically contemplates increased product and program offerings for customers, including new customer information platforms designed to provide improved customer access, greater service options and expanded access to energy usage information. NMSA 1978, § 62-8-13(B)(5), (F)(12).
2. In this context where my testimony discusses "stakeholders," I mean the entities that typically participate in New Mexico Public Regulation Commission proceedings or entities that may have a particular interest in grid modernization-related activities.

2

	DIRECT TESTIMONY
	OF LAURA E. SANCHEZ
	NMPRC CASE NO. 22-00058-UT
1	• improved access to electricity usage information, empowering customers with more
2	visibility on their energy usage and enhancing customer optionality for rates (i.e., time-
3	of-day rates) and programs or offerings (i.e., energy efficiency, DERs and
4	electrification).
5

6 Q. HOW EXTENSIVE ARE PNM'S PLANS FOR MEETING KEY OBJECTIVES

7 FOR A CARBON-FREE TRANSITION AND ENHANCING CUSTOMER

1. BENEFITS?
2. A. Like many utilities, PNM's 1970s era grid reflects the best technology of that time. That
3. grid has served customers well. But it is essentially a one-way communication path that
4. was built for a system with large, central station power. Today's grid needs two-way
5. communication to integrate carbon free, distributed resources, as well as to give customers
6. the information to make choices about energy use. These investments to modernize the
7. grid will create a platform to make that happen. PNM has been investing in the current
8. grid on an ongoing basis, but now we need to take a technological step toward changing its
9. current one-way delivery system into a multi-directional grid. In turn, this will support
10. DERs, enhance reliability and resiliency, and provide customers with optionality and
11. critical information.

19

1. This transition will not be easy and will require not only infrastructure modernization, but
2. also fundamental changes to all aspects of utility operations, which is why PNM is
3. proposing a multi-year plan. The grid modernization projects authorized by the Grid Mod

3