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New Mexico

New Mexico

Incentives/Policies for Renewables & Efficiency

Printable Version
Renewables Portfolio Standard   

Last DSIRE Review: 07/24/2014
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 in 2020:
Solar: 20% of RPS requirement (4% of sales)
Wind: 30% of RPS requirement (6% of sales)
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.
Authority 4:
Date Enacted:
Date Effective:
Case No. 13-00152
Authority 5:
Date Enacted:
Date Effective:
S.B. 49

In March 2004, New Mexico’s governor signed into law S.B. 43, creating a state renewable portfolio standard (RPS). By 2020, investor-owned utilities (IOUs) are required to generate 20% of total retail sales from renewable energy resources, and rural electric cooperatives are required to generate 10% of total retail sales from renewable energy resources.

Eligible Technologies

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 fuels or nuclear facilities.


Investor-Owned Utilities

IOUs are required to generate 20% of total retail sales from renewable energy resources by 2020, with interim standards of 10% by 2011 and 15% by 2015.

Provisions in current law limit the potential cost of complying with the RPS. 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. The reasonable cost threshold for 2006 was 1% of the IOU's 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%.

The additional cost of the RPS to non-governmental customers who consume more than 10 million kWh per year is limited so as not to exceed either 1% of that customer's annual electric charges or $49,000, whichever is less. This procurement limit increases by 0.2% or $10,000 per year until January 1, 2011, when it remains fixed at either 2% of the customer's annual electric charges or $99,000, whichever is less. 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. 

S.B. 549 of 2011 exempts political subdivisions of the state under certain conditions from all utility charges associated with renewable energy generation. 

Electric Cooperatives

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

S.B. 418 also 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.


In August 2007, the Public Regulation Commission (PRC) issued an order and rules requiring that IOUs meet the 20% by 2020 target through a "fully diversified renewable energy portfolio,” in which no less than:

  • 30% of the RPS requirement is met using wind energy,
  • 20% met using solar power,
  • 5% met using other renewable energy technologies, and
  • 1.5% met using distributed generation renewable energy technologies for years 2011 through 2014, rising to 3% in 2015. (Distributed generation renewable energy resources used to meet other RPS requirements cannot also be counted for this distributed requirement.)

Utilities will be excused from the diversification targets should costs of achieving them raise the cost of electricity by more than 2% or if the targets cannot be accomplished without impairing system reliability.

Credit Multipliers

The PRC approved a credit multiplier in December 2013, where 1 kilowatt-hour (kWh) of electricity from biogas, geothermal, landfill gas, and fuel cell technologies counts as 2 renewable energy certificates toward compliance with the RPS (see below).


Utilities document compliance with the RPS through the use of renewable energy certificates (RECs). A REC represents 1 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 that are not used for compliance, sold, or otherwise transferred may be carried forward for up to 4 years.

On July 1 of every year, IOUs 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. Electric cooperatives must report to the PRC by April 30 of each year on its purchases and generation of renewable energy during the preceding calendar year.

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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.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.