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New Mexico

New Mexico

Incentives/Policies for Renewables & Efficiency

Printable Version
Renewables Portfolio Standard   

Last DSIRE Review: 12/21/2012
Program Overview:
State: New Mexico
Incentive Type: Renewables Portfolio Standard
Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Zero emission technology with substantial long-term production potential, Anaerobic Digestion, Fuel Cells using Renewable Fuels
Applicable Sectors: Investor-Owned Utility, Rural Electric Cooperative
Standard:Investor-owned utilities: 20% by 2020;
Rural electric cooperatives: 10% by 2020
Technology Minimum:For IOUs only in 2020
Solar: 20% of RPS requirement (4% of sales)
Wind: 30% of RPS requirement (6% of sales)
Geothermal, biomass, certain hydro facilities and other renewables: 5% of RPS requirement (1% of sales)
Distributed Renewables: 3% of RPS requirement (0.6% of sales)
Credit Trading:Yes (WREGIS)
Credit Transfers Accepted From:None
Credit Transfers Accepted To:WREGIS into NAR, NC-RETS
(Refers to tracking system compatibility only, not RPS eligibility. Please see statutes and regulations for information on facility eligibility)
Web Site:
Authority 1:
Date Enacted:
Date Effective:
NMAC 17.9.572
Authority 2:
Date Enacted:
Date Effective:
N.M. Stat. § 62-15-34 et seq.
Authority 3:
Date Enacted:
N.M. Stat. § 62-16-1 et seq.

Note: The New Mexico Public Regulation Commission (PRC) passed an order in December 2012, making some significant changes to the state's Renewables Portfolio Standard. Notably, the order increased the carve-out for wind from 20% to 30% of the overall standard. It also increased the reasonable cost threshold for investor-owned utilities such that 3% of their total annual revenue must be spent procuring renewable energy. Cooperative utilities will also have to comply with a 5% reasonable cost threshold beginning in 2015.  

In March 2007, New Mexico passed SB 418, which directs investor-owned utilities to generate 20% of total retail sales to New Mexico customers from renewable energy resources by 2020, with interim standards of 10% by 2011 and 15% by 2015. The bill also establishes a standard for rural electric cooperatives of 10% by 2020 (see below). Furthermore, utilities are to set a goal of at least 5% reduction in total retail sales to New Mexico customers, adjusted for load growth, by January 1, 2020.

Renewable energy is defined as electric energy generated by low- or zero-emissions generation technology with substantial long-term production potential; solar; wind; geothermal; hydropower facilities brought in service after July 1, 2007; fuel cells that are not fossil fueled; and biomass resources, such as agriculture or animal waste, small diameter timber, salt cedar and other phreatophyte or woody vegetation removed from river basins or watersheds in New Mexico, landfill gas and anaerobically digested waste biomass. Renewable energy does not include electric energy generated from fossil fuel or nuclear facilities.

Utilities document compliance with the RPS through the use of renewable-energy certificates (RECs). A REC represents one kilowatt-hour (kWh) of renewable electricity. RECs used for RPS compliance on or after January 1, 2008 must be registered with the Western Renewable Energy Generation Information System (WREGIS). RECs not used for compliance, sold, or otherwise transferred may be carried forward for up to four years.

RPS for Investor-Owned Utilities
In August 2007, the PRC issued an order and rules requiring that investor owned utilities meet the 20% by 2020 target through a "fully diversified renewable energy portfolio" which is defined as a minimum of 20% solar power, 30% wind power, and 5% from either biomass, geothermal energy, hydro brought into service after July 1, 2007, and other renewables starting in 2011. Additionally 1.5% must come from distributed renewables by 2011, rising to 3% in 2015. Distributed resources counted toward the other portfolio requirements cannot also be counted for the distributed requirement. Utilities will be excused from the diversification targets should costs of achieving them raise the cost of electricity by more than 2 percent or if the targets cannot be accomplished without impairing system reliability.

The reasonable cost threshold for 2006 was 1% of the utilities' total annual revenue, and increased by one-fifth percent per year until January 1, 2011. The reasonable cost threshold for 2013 and 2014 is 3%. In any given year, if the cost to procure renewable energy is greater than the reasonable cost threshold, a public utility will not be required to incur that cost or to procure that resource, provided that the condition excusing performance under the renewable portfolio standard in any given year will not operate to delay the annual increases in the renewable portfolio standard in subsequent years. A public utility that believes its procurement will exceed the reasonable cost threshold shall file with the commission a request for waiver of the renewable portfolio standard for the applicable calendar year.

The additional cost of the RPS to non-governmental customers who consume more than 10 million kWh per year is also limited so as not to exceed the lower of 1% of that customer's annual electric charges or $49,000. This procurement limit increases by 0.2% or $10,000 per year until January 1, 2011, when it remains fixed at the lower of 2% of the customer's annual electric charges or $99,000. After January 1, 2012, the $99,000 limit is adjusted for inflation by the amount of the cumulative change in the Consumer Price Index, Urban (CPI-U) between January 1, 2011 and January 1 of the procurement plan year.  SB 549 of 2011 exempts political subdivisions of the state, under certain conditions, from all utility charges associated with renewable energy generation. 

On July 1 of every year, investor-owned utilities must file a report to the PRC on its procurement and generation of renewable energy during the prior calendar year and submit a procurement plan.

RPS for Rural Electric Cooperatives
In March 2007, SB 418 created a separate renewables portfolio standard for rural electric distribution cooperatives: 5% of retail sales by 2015, increasing 1% per year to reach 10% renewables by 2020. Cooperatives are not required to incur RPS compliance costs that exceed the “reasonable cost threshold”, which is set at 1% of the distribution cooperative’s gross receipts from business transacted in New Mexico for the preceding calendar year. This reasonable cost threshold increases to 5% beginning in 2015.

In addition to the RPS, SB 418 established a “renewable energy and conservation fee” to support programs or projects to promote the use of renewable energy, load management or energy efficiency. Distribution cooperatives may collect from its customers a fee of no more than 1% of the customer’s bill, not to exceed $75,000 annually from any single customer.

Distribution cooperatives must report to the PRC by March 1 of each year on its purchases and generation of renewable energy during the preceding calendar year.

In December 2002, the PRC unanimously approved a renewables portfolio standard (RPS) requiring investor-owned utilities to derive 5% of annual retail sales to New Mexico customers from renewable energy sources by 2006, rising to 10% by 2011. In March of 2004, Senate Bill 43 codified the PRC rules and established additional requirements. New Mexico subsequently doubled its RPS for investor-owned utilities and created a separate standard for rural electric cooperatives in March 2007 (Senate Bill 418).

  Dwight Lamberson
New Mexico Public Regulation Commission
PO Box 1269
1120 Paseo de Peralta
Santa Fe, NM 87504
Phone: (505) 827-4001
Web Site:
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

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