Southwestern Public Service Company 2023 Integrated Resource Plan

Sierra Club
Project completed.

Synapse supported Sierra Club’s engagement in Southwestern Public Service Company’s (Xcel Energy / SPS) 2023 Integrated Resource Planning process. Synapse reviewed and critically evaluated SPS’s IRP report with a focus on SPS’s modeling and consideration of the following issues: (1) SPS’s selection of gas resources to replace its retiring coal units and to meet future load growth; (2) SPS’s limited consideration of the risks that volatility in the gas market will place on ratepayers; (3) SPS’s limited consideration of the impact of the New Mexico Energy Transition Act (ETA) and the newly proposed Greenhouse Gas Rules under Section 111 of the Clean Air Act (Section 111 Rule) on its proposed new gas resources; (4) SPS’s cost assumptions for new renewables, and in particular its assumptions around tax credits available under the Inflation Reduction Act.

We recommend that SPS; 

(1) Not build any new gas capacity during the study period that will eventually have to be converted to operate on hydrogen to comply with the ETA and the proposed Section 111 Rules. Given the uncertainty around the cost and commercial viability of hydrogen as a fuel source, SPS should rely on commercially available clean energy resources and not subject ratepayers to stranded asset risk.
(2) SPS should outline its understanding of the environmental compliance options required for new and existing fossil units to comply with the proposed Section 111 Rule.
(3) SPS should model additional tax credits available for renewables under the IRA in its final IRP modeling runs, including the Energy Infrastructure Reinvestment Financing program within the IRA.