Modernizing the grid: Smart meters, cybersecurity measures part of PNM’s plan

Public Service Company of New Mexico proposed a $344 million “grid modernization” plan Monday morning to help accommodate more renewable technology on its system, improve grid reliability and resiliency, and offer customers real-time monitoring of their own energy use for the first time.

The plan, which PNM filed at the Public Regulation Commission Monday morning, calls for installing “smart meters” on all the homes and businesses of PNM’s 530,000 customers over the next six years. That would allow for two-way, real-time system monitoring and communication between the utility and its customers. It would also facilitate the addition of new technology for PNM to instantaneously and automatically detect and isolate problems on the grid, limiting the impact of outages and greatly speeding repairs.

In addition, the plan includes foundational cybersecurity upgrades to better protect the grid as smart technology is installed, PNM executives told reporters in a virtual press conference.

Overall, the investment would bolster the utility’s ability to manage the transition from fossil fuels to renewable energy as large, centralized power plants are replaced by renewable technologies. Those include utility-run solar, wind and battery storage systems scattered in many areas around the state, plus customer-sited rooftop solar. To coordinate it all, PNM needs a modern, 21st-century grid that provides instantaneous monitoring and control across the entire system, including two-way communication between the utility and its customers, said PNM Chief Policy and Legal Advisor Laura Sanchez.

“In the last 50 years, the electric grid has evolved from a one-way power source to a dynamic multi-functioning system that not only powers our homes, but has the ability to integrate with all customers to give them control over their energy usage and bills, as well as providing greater opportunities for more rooftop solar,” Sanchez told reporters. “… PNM’s grid modernization plan will add technology to enable all of this to integrate onto the system, while also making sure the system is reliable — that the lights come on when you throw the switch — and that it is resilient.”

Utilities in at least 20 other states have either already adopted or initiated such grid modernization programs.

The New Mexico Legislature passed a law in 2020 instructing the PRC to oversee grid modernization. And, early this year, the PRC ordered PNM to submit a modernization plan to the commission.

If approved, the six-year investment would cost average residential consumers about $1.20 per month through a new fixed charge, or rate rider, on customers’ bills, said PNM spokesman Ray Sandoval.

“For less than the cost of a small cup of coffee per month, PNM customers can take control of their energy usage and their bill, while helping with the energy transition,” Sandoval told reporters.

Smart meters will allow customers to monitor their own consumption in real time to make personal decisions about the best time of day to run appliances, or plug in electric vehicles for home charging, based on off-peak electricity pricing.

“Suppose you need to run your clothes dryer or dishwasher,” Sanchez said. “When it’s fully implemented, grid modernization will help you determine when the best time to run them would be.”

PNM will propose a new time-of-day pricing structure in a separate filing with the PRC to facilitate customer choice after conducting a pilot program to test it, Sanchez said.

Other modernization technologies in the plan include:

• Software and hardware upgrades to PNM’s communications network.
• “Remote fault indicators” installed across the grid to immediately detect and pinpoint failures, effectively isolating problems to reduce customer impact while allowing for rapid, targeted repairs.
•  Volt-variation controls to smooth out peaks and valleys on the grid as customers add rooftop solar or plug-in electric vehicles.
• Upgrades in PNM’s distribution and analytics system, plus launch of a new “customer energy management platform,” or dashboard, for consumers to monitor their energy use on mobile devices.
• New cybersecurity software and hardware to better protect the grid.

Apart from the direct customer benefit of personalized control over their energy use, grid modernization can increase New Mexico’s competitiveness in attracting more businesses to the state, said PNM Business Development Manager Elisha Saavedra-Torres. That’s because many companies today want direct access to renewable energy with a system that’s reliable, resilient and secure.

“(We’re seeing) unprecedented interest from companies that are considering moving their facilities into our service territory,” Saavedra-Torres said. “… Competitive cost, cybersecurity and sustainability are key considerations for a business on where to operate.”

If approved by the PRC, smart meter installation will prioritize low-income communities, making them the first upgrade beneficiaries, Sandoval said. And the new $1.20 rate rider won’t begin until fall 2023, once next year’s peak summer electric consumption months have ended.

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