Southwest Public Service Company 2026 Certificate of Need Docket
Synapse provided technical assistance to New Mexico Attorney General Raúl Torrez and the New Mexico Department of Justice in reviewing Southwest Public Service Company's (SPS) 2026 application for a Certification of Need Docket (CPCN) to build and operate new wind, solar, battery and thermal resources and to extend the life of some existing thermal resources. Synapse’s review and testimony focused on assessing whether the full quantity of proposed resources were justified, and if sufficient alternative analysis had been provided. We reviewed the drivers of SPS’s load growth and assessed the extent to which the load was likely to materialize. We reviewed the cost of new proposed projects and the Company’s justification for continued reliance on its existing resources. And we evaluated SPS’s Renewable Energy Standard (REA) exemption requests.
We found that SPS’s load forecast and resource need was being driven by four distinct factors: (1) a change in winter capacity accreditation in the Southwest Power Pool (SPP); (2) retirement of existing resources; (3) increasing electrification of the oil and gas industry in the region; and (4) some data center growth in its Texas region. We reviewed SPP’s capacity accreditation process and found flaws that were driving the high winter reserve margin. We found that a large portion of the new load was attributed to new oil and gas load – much of which is speculative and uncertain, and that there were no current large load tariffs set up in the state to properly protect ratepayers. Absent any new tariffs, ratepayers will see their bills rise by as much as 47.5 percent. Finally, we found that SPS was just justified in request to designate a portion of the Gaines County CT as a zero-carbon resource, nor was it justified in seeking an exemption from REA compliance at the Gains and Tolk CTs.
We recommended that SPS distinguish between the different types of new load and procure resources separately to meet existing load vs new speculative load, prioritizing existing load first with the lowest cost resource options. We recommended that the Commission only approve a CPCN for resources needed to meet existing load and the new reserve margin and not approve resources to meet new load until new tariffs and protections were in place. We also recommended that the Commission not grant SPS’s request to exempt Gaines County and Tolk Station from REA compliance and not approve a CPCN for new resources that required a REA compliance exemption. We also recommended that SPS take a more active role in SPP in improving the market’s capacity accreditation framework.