Dive Brief:

El Paso Electric Company (EPE) last week announced its generation mix for 2022-2023, which includes purchasing bids for natural gas, solar and battery storage.

The utility issued a request for proposals in June of 2017 and received bids through October of 2018 after finding it would need an additional 370 MW to meet 2022-2023 demand. The winning solicitations include a 226 MW natural gas combustion turbine, 200 MW of utility-scale solar and 100 MW of energy storage.

The gas generating unit will be operational in 2023 as an addition to the utility's 752-MW Newman Power Station, and is estimated to cost $143 million. EPE also plans to purchase an additional 50-150 MW of renewables "to provide for fuel diversity and energy cost savings," according to the utility's press release.

Dive Insight:

EPE in 2016 became the first utility in Texas and New Mexico to generate electricity without coal-fired power, making up for it with 1,446 MW of natural gas capacity. Now, the utility is diversifying its primarily natural gas and nuclear portfolio, taking advantage of cheap solar and storage prices.

The additional 576-676 MW of generation capacity will be sufficient to meet 2022-2023 demand, EPE Manager of Strategic Communications and Community Engagement George De La Torre told Utility Dive in an email. Although the utility only required 370 MW, the extra capacity includes "solar resources that do not contribute 100% of nameplate capacity during the peak load hour which is later in the afternoon in our service territory and the portfolio takes into consideration the variable output for cloud cover," he said.

Currently, EPE's renewables generation mix consists of 110 MW of solar including a 5 MW solar facility and a 3 MW community solar array in Texas. Its total generation capacity is approximately 2,082 MW, with 38.6% of its generation coming from natural gas and 48.7% from nuclear.

"This balanced combination of resources will work with our existing energy portfolio as we move to retire aging, less efficient plants while continuing to meet our customers' changing energy needs," said Mary Kipp, El Paso Electric President and Chief Executive Officer in a statement.

The utility serves over 400,000 customers across Texas and New Mexico.