FINANCIAL ASSURANCE FOR RENEWABLE ENERGY

SB0209

SENATE BILL 209

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

INTRODUCED BY

Gabriel Ramos
and
Leo Jaramillo
and
Anthony L. Thornton

and
Luis M. Terrazas

AN ACT

RELATING TO UTILITIES; REQUIRING FINANCIAL ASSURANCE FOR
RENEWABLE ENERGY FACILITIES; PROVIDING AUTHORITY TO MANAGE
FINANCIAL ASSURANCE FOR RENEWABLE ENERGY FACILITIES; CREATING
THE RENEWABLE ENERGY 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 "Renewable Energy Financial Assurance Act".

SECTION 2.
[
NEW MATERIAL
] DEFINITIONS.--As used in the
Renewable Energy Financial Assurance Act:

A. "decommissioning" means actions taken to remove,
dispose of or recycle equipment or infrastructure and remediate
the site of a renewable energy 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. "renewable energy facility" means a facility
that generates energy using the following resources, with or
without storage:

(1)
solar;

(2) wind;

(3) geothermal;

(4) hydropower;

(5) biomass;

(6) fuel cells that do not use fossil fuels to
create electricity; or

(7) landfill gas and anaerobically digested
waste biogas; and

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

SECTION 3.
[
NEW MATERIAL
] AUTHORITY OVER FINANCIAL
ASSURANCE FOR RENEWABLE ENERGY FACILITIES--REQUIREMENTS FOR
DECOMMISSIONING.--

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

B. The division shall promulgate rules to establish
requirements for the decommissioning of renewable energy
facilities that ensure:

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

(2) remediation of the site;

(3) monitoring of the site as necessary;

(4) an appropriate time frame for completion;

(5) that an owner or operator provides
financial assurance sufficient to cover costs of
decommissioning a renewable energy facility in a form and
amount acceptable to the division; and

(6) the implementation of additional measures
the division deems appropriate.

SECTION 4.
[
NEW MATERIAL
] FINANCIAL ASSURANCE REQUIREMENT
FOR RENEWABLE ENERGY FACILITIES.--

A. The owner or operator of a renewable energy
facility shall provide financial assurance to the division as a
condition precedent to commercial operation of the facility.

B. The amount of financial assurance provided by
the owner or operator of a renewable energy facility shall be
sufficient to ensure the decommissioning of the facility, as
determined by the division.

C. The form of financial assurance filed by an
owner or operator of a renewable energy facility is subject to
approval by the division and shall comply with rules
promulgated by the division. Acceptable forms of financial
assurance include:

(1) surety bonds;

(2) irrevocable letters of credit;

(3) collateral bonds;

(4) cash accounts;

(5) facility-specific insurance policies; and

(6) third-party guarantees.

D. The division shall periodically review financial
assurance requirements and adjust them to account for inflation
and anticipated changes in decommissioning costs. An owner or
operator of a renewable energy facility shall ensure that the
financial assurance provided to the division meets any new or
expanded requirements.

E. Financial assurance provided by an owner or
operator to the division shall remain in force until released
by the division. The owner or operator of a renewable energy
facility may file an application with the division for the
release of all or part of the owner's or operator's financial
assurance. The application shall describe the decommissioning
measures completed and shall contain an estimate of the costs
of the decommissioning that have not been completed. Prior to
the release of the owner's or operator's financial assurance,
the division shall conduct an inspection and evaluation of the
site and decommissioning work involved. 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.

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

A. If the owner or operator of a renewable energy
facility fails to comply with financial assurance requirements,
the division may order the 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 of a renewable energy facility 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 renewable energy decommissioning
fund.

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
owner or operator in the district court of the county in which
the renewable energy facility is located for indemnification of
all costs incurred by the division in decommissioning that
owner's or operator's renewable energy facility. All money
collected pursuant to a judgment in a suit for indemnification
brought pursuant to this section shall be deposited in the
renewable energy decommissioning fund.

SECTION 7.
[
NEW MATERIAL
] RENEWABLE ENERGY
DECOMMISSIONING FUND.--

A. The "renewable energy 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 Renewable Energy
Financial Assurance 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 renewable energy facilities.

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