CONSIDERATION OF RPS IN GRID MODERNIZATION

HB0337

HOUSE BILL 337

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

INTRODUCED BY

Debra M. Sariñana
and
Tara L. Lujan

AN ACT

RELATING TO PUBLIC UTILITIES; INCLUDING CONSIDERATION OF
RENEWABLE ENERGY STANDARDS AS A FACTOR IN EVALUATING GRID
MODERNIZATION GRANTS.

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

SECTION 1.
Section 71-11-1 NMSA 1978 (being Laws 2020,
Chapter 15, Section 1) is amended to read:

"71-11-1. GRID MODERNIZATION ROADMAP AND GRANT PROGRAM.--

A. The energy, minerals and natural resources
department shall develop a roadmap for grid modernization that
shall detail priorities and strategies to modernize New
Mexico's electric grid.

B. The department shall establish a grid
modernization grant program to support implementation of a
modern grid by providing grants to eligible projects proposed
by:

(1) municipalities and county governments;

(2) state agencies;

(3) state universities;

(4) public schools;

(5) post-secondary educational institutions;
and

(6) Indian nations, tribes and pueblos.

C. The department shall adopt rules establishing
the application procedure, the required qualifications for
projects and the purposes for which the grant may be used. In
approving grants, consideration shall be given to:

(1) the extent to which the project improves
electrical system efficiency, reliability, resilience and
security; lowers operations and maintenance costs; and meets
energy demands through a flexible, diversified and distributed
energy portfolio
that includes a percentage of renewable
generation sources consistent with the renewable portfolio
standards in the Renewable Energy Act and
consistent with New
Mexico's energy goals;

(2) the extent to which the project
incorporates a new technology or a new or innovative
application of an existing technology that will provide useful
information
in real time
to the state, utilities, electric
cooperatives
and their customers
and the general public related
to grid modernization;

(3) the degree to which the project fosters
the general public's, students' or a specific government or
industry sector's overall understanding and appreciation of the
benefits of modernizing the electric grid;

(4) the extent to which the project
complements or coordinates with the resource planning of a
public utility as required by the Public Utility Act; [
and
]

(5) the extent to which the project stimulates
in-state economic development, including the creation of jobs
and apprenticeships;
and

(6) the extent to which the project helps a
public utility to meet the requirements of the renewable
portfolio standards set forth in the Renewable Energy Act
.

D. Grants shall be awarded on a competitive basis,
and priority shall be given to proposals that use matching
funds from non-state sources. The grant program shall seek to
fund applicants in each of the following categories:

(1) an Indian nation, tribe or pueblo;

(2) a rural community served by a rural
electric cooperative;

(3) a rural community served by an investor-owned public utility;

(4) an urban or semi-urban municipality or
county; and

(5) an institution of higher education.

E. Projects receiving a grant from the grid
modernization grant program shall be required to be coordinated
with the electric service provider that serves the entity in
order to ensure that the program does not adversely impact
electrical system efficiency, reliability, resilience and
security.

F. The department shall provide a report on the
grid modernization grant program to the legislative finance
committee prior to each regular legislative session. The
report shall include:

(1) a list of grant recipients;

(2) the amount and date of each grant;

(3) a description of each project funded; and

(4) a description of how each project
contributes to grid modernization and demonstrates increased
electric grid reliability, resilience
and
security; creates
economic benefits; or pilots or demonstrates new technologies
or new implementations of existing technologies.

G. For the purposes of this section:

(1) "department" means the energy, minerals
and natural resources department; [
and
]

(2) "grid modernization" means improvements to
electric distribution or transmission infrastructure, including
related data analytics equipment, that are designed to
accommodate or facilitate the integration of renewable electric
generation resources with the electric distribution grid or to
otherwise enhance electric distribution or transmission grid
reliability, grid security, demand response capability,
customer service or energy efficiency or conservation and
includes:

(a) advanced metering infrastructure
that facilitates metering and providing related price signals
to users to incentivize shifting demand;

(b) intelligent grid devices for [
real
time
]
real-time
system and asset information at key substations
and large industrial customers;

(c) automated control systems for
electric distribution circuits and substations;

(d) communications networks for service
meters;

(e) distribution system hardening
projects for circuits and substations designed to reduce
service outages or service restoration times;

(f) physical security measures at key
distribution substations;

(g) cybersecurity measures;

(h) energy storage systems and
microgrids that support circuit-level grid stability, power
quality, reliability or resiliency or provide temporary backup
energy supply;

(i) electrical facilities and
infrastructure necessary to support electric vehicle charging
systems;

(j) new customer information platforms
designed to provide improved customer access, greater service
options and expanded access to energy usage information; and

(k) other new technologies that may be
developed regarding the electric grid;
and

(3) "microgrid" means a group of
interconnected loads and distributed energy resources within
clearly defined electrical boundaries. A microgrid acts as a
single controllable entity with respect to the grid and has a
maximum generation capacity of twenty megawatts. A microgrid
can operate in both grid-connected or in an island mode
."

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