FINANCIAL ASSURANCE FOR SOLAR & WIND

HB0281

HOUSE BILL 281

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Luis M. Terrazas
and
Gabriel Ramos
and
Mark B. Murphy

and
Rebecca Dow
and
Gail Armstrong

AN ACT

RELATING TO UTILITIES; REQUIRING FINANCIAL ASSURANCE FOR SOLAR
AND WIND ENERGY GENERATION FACILITIES; PROVIDING AUTHORITY TO
MANAGE FINANCIAL ASSURANCE FOR SOLAR AND WIND ENERGY GENERATION
FACILITIES; CREATING THE SOLAR AND WIND DECOMMISSIONING FUND.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1.
[
NEW MATERIAL
] SHORT TITLE.--This act may be
cited as the "Solar and Wind Financial Assurance Act".

SECTION 2.
[
NEW MATERIAL
] DEFINITIONS.--As used in the
Solar and Wind Financial Assurance Act:

A. "decommissioning" means actions taken to remove,
dispose of or recycle equipment or infrastructure and remediate
the site of a solar or wind energy generation facility, in
accordance with rules promulgated by the division;

B. "department" means the energy, minerals and
natural resources department;

C. "division" means the energy conservation and
management division of the department;

D. "site" means the land on which a solar or wind
energy generation facility is or was located, including land
occupied or disturbed by associated equipment, structures,
access roads or facility-owned infrastructure;

E. "solar energy generation facility" means a
facility that uses an arrangement or combination of solar
collectors or modules that convert sunlight into electricity or
thermal energy; and

F. "wind energy generation facility" means a
facility that converts wind energy into electricity and
includes wind turbines, towers, substations and transmission
lines.

SECTION 3.
[
NEW MATERIAL
] AUTHORITY OVER FINANCIAL
ASSURANCE FOR SOLAR AND WIND ENERGY GENERATION FACILITIES--REQUIREMENTS FOR DECOMMISSIONING.--

A. The division has jurisdiction and authority over
all matters relating to financial assurance for the
decommissioning of solar and wind energy generation facilities.

B. The division shall promulgate rules to establish
requirements for the decommissioning of solar and wind energy
generation facilities that ensure:

(1) removal, proper disposal or recycling of
facility equipment and infrastructure;

(2) remediation of the site;

(3) monitoring of the site as necessary during
decommissioning;

(4) an appropriate time frame for completion;
and

(5) additional measures the division deems
appropriate.

SECTION 4.
[
NEW MATERIAL
] FINANCIAL ASSURANCE REQUIREMENT
FOR SOLAR AND WIND ENERGY GENERATION FACILITIES.--

A. The owner or operator of a solar or wind energy
generation facility shall, as a condition precedent to
operation of the facility, provide financial assurance in the
form of an irrevocable letter of credit, a cash or surety bond
or a facility-specific decommissioning insurance policy to the
division, running to the benefit of the state and conditioned
that the facility be decommissioned in compliance with rules
promulgated by the division.

B. Solar and wind energy generation facilities in
operation prior to July 1, 2026 shall be required to meet
financial assurance requirements pursuant to this section by
January 1, 2028.

C. The division shall establish categories of
financial assurance. The division shall consider the size and
location of the solar or wind energy generation facility,
equipment type, potential salvage value and other factors that
the division deems relevant. Financial assurance categories
established by the division for solar and wind energy
generation facilities shall be no less than two hundred fifty
thousand dollars ($250,000) per facility.

D. All financial assurance shall remain in force
until released by the division. The division shall release an
owner's or operator's financial assurance when the division is
satisfied that the conditions of the financial assurance have
been fully performed.

E.
An owner or operator required to provide
financial assurance for a solar or wind energy generation
facility pursuant to this section is considered to have met
that requirement if the owner or operator obtains an insurance
policy that covers the specific facility and that:

(1) is approved by the office of
superintendent of insurance;

(2) names the state as owner of the policy and
contingent beneficiary;

(3) names a primary beneficiary that agrees to
carry out the decommissioning;

(4) is fully prepaid and cannot be canceled or
surrendered;

(5) remains in effect until the specified
facility has been decommissioned;

(6) provides that benefits are payable only
upon completion of decommissioning; and

(7) provides benefits that are not less than
an amount equal to the financial assurance required by the
division.

F. If, subsequent to an owner or operator obtaining
an insurance policy as provided in this section, the applicable
financial assurance requirement is increased, the owner or
operator is considered to have met the revised requirement if:

(1) the existing policy benefit equals or
exceeds the revised requirement;

(2) the owner or operator obtains an amendment
that meets the requirements of Subsection E of this section and
increases the policy benefit by the amount of the increase in
the applicable financial assurance requirement; or

(3) the owner or operator obtains financial
assurance that meets the requirements of Subsection E of this
section and is equal to the amount, if any, by which the
revised requirement exceeds the policy benefit.

SECTION 5.
[
NEW MATERIAL
] FORFEITURE OF FINANCIAL
ASSURANCE.--

A. If the owner or operator of a solar or wind
energy generation facility fails to comply with financial
assurance requirements, the division may order decommissioning
of the facility or forfeiture of the financial assurance, or
both, in accordance with rules promulgated by the division. If
the owner or operator fails to comply with the order within the
time frame set out in the order, the financial assurance shall
be forfeited.

B. When financial assurance is forfeited, the
division shall give notice to the attorney general, who shall
collect the forfeiture without delay.

C. All forfeitures shall be remitted to the
division for deposit in the solar and wind decommissioning fund
to be used for decommissioning.

SECTION 6.
[
NEW MATERIAL
] INSUFFICIENT FINANCIAL
ASSURANCE.--When financial assurance proves insufficient to
cover the cost of decommissioning on land other than federal
land and money must be expended to meet the additional
expenses, the division is authorized to bring suit against the
operator in the district court of the county in which the solar
or wind energy generation facility is located for
indemnification for all costs incurred by the division in
decommissioning that owner's or operator's solar or wind energy
generation facility. All money collected pursuant to a
judgment in a suit for indemnification brought pursuant to this
section shall be deposited in the solar and wind
decommissioning fund.

SECTION 7.
[
NEW MATERIAL
] SOLAR AND WIND DECOMMISSIONING
FUND.--

A. The "solar and wind decommissioning fund" is
created as a nonreverting fund in the state treasury.

The fund
consists of appropriations, gifts, grants, donations, income
from investment of the fund and other money credited to the
fund. The division shall administer the fund, and money in the
fund is subject to appropriation by the legislature to the
division to carry out the provisions of the Solar and Wind
Decommissioning Act. Disbursements from the fund shall be made
by warrant of the secretary of finance and administration
pursuant to vouchers signed by the secretary of energy,
minerals and natural resources.

B. Money in the fund may be used by the division to
facilitate decommissioning of solar and wind energy generation
facilities
.

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