Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Pettigrew/Murphy/Henry
LAST UPDATED
ORIGINAL DATE 02/11/2025
SHORT TITLE Certain Natural Gas as Renewable Energy
BILL
NUMBER House Bill 273
ANALYST Gygi
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
EMNRD
No fiscal
impact
No fiscal
impact
No fiscal
impact
No fiscal
impact
General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Conflicts with Senate Bill 45.
Sources of Information
LFC Files
Agency Analysis Received From
New Mexico Attorney General (NMAG)
Energy, Minerals and Natural Resources Department (EMNRD)
SUMMARY
Synopsis of House Bill 273
House Bill (HB273) adds the term "natural gas using combined cycle technology” to the list of
renewable energy resources in both the Rural Electric Cooperative Act (Section 62-15-37 NMSA
1978) and the Renewable Energy Act (Section 62-16-13 NMSA 1978). The bill also adds the
following exclusion to the definition in the Rural Electric Cooperative Act: “does not include
electric energy generated by use of fossil fuel or nuclear energy, except for natural gas using
combined cycle technology.”
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
The Energy, Minerals and Natural Resources Department (EMNRD) does not anticipate a direct
fiscal impact if HB273 is enacted.
House Bill 273 – Page 2
SIGNIFICANT ISSUES
According to EMNRD:
Defining fossil fuels as a renewable energy resource based on the efficiency of
technology runs counter to established definitions and understanding of what a renewable
energy resource is: i.e., energy derived from natural sources that are replenished at a
higher rate than they are consumed or are replenished on a human rather than geologic
timescale. Even highly efficient combined cycle gas turbines consume fossil gas, a
resource which is not renewable within a human lifetime, at a greater rate than it is
created.
Both EMNRD and the New Mexico Attorney General (NMAG) point out HB273 fails to define
“combined cycle technology.” Given the lack of definition, EMNRD presumes that:
The proposed language means a combined-cycle gas turbine technology that utilizes both
the Brayton cycle of a natural gas fired turbine engine while also utilizing the heat from
the exhaust gases in a fired or unfired Rankine cycle waste heat boiler, thus recovering
over 60 percent of the input energy to create electricity. This is the common definition of
“combined cycle technology” in the power generation industry.
NMAG points out that the proposed non-standard definitions in HB273 do not follow federal
definitions or those approved by New Mexico’s Public Regulation Commission and recognized
by the Western Renewable Energy Generation Information System (WREGIS), an independent,
renewable energy tracking system for a 14-state region. This lack of alignment could adversely
affect public utilities required to register “renewable energy certificates” with WREGIS to
demonstrate compliance with the state’s portfolio standards. NMAG states that “a definition
encompassing a fossil fuel source may cause conflict with the policy objectives of other
participating states, which may manifest as legal challenges.”
EMNRD and NMAG call attention to the fact that the provisions of HB273 skirt the zero carbon
emission provisions in the Renewable Energy Act’s portfolio standards, as well as the Energy
Transition Act (ETA) and Section 62-15-34 of the Rural Electric Cooperative Act, which
mandate 100 percent of electricity be generated by zero carbon resources by 2045 and 2050,
respectively. NMAG concludes that:
Because combined cycle gas turbines are not “zero carbon” resources, the proposed
amendments to the definition of renewable energy would not exempt these electricity
generating resources from the ETA’s mandates.
EMNRD further cautions:
Not all combined cycle technology includes carbon-capture or waste heat boilers, leaving
open the possibility that a non-renewable and potentially carbon emitting technology
would be enshrined in legislation as a renewable energy resource.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
House Bill 273 conflicts with House Bill 45, which creates a Renewable Energy Production Tax
Act containing a different definition of “renewable energy.”
KG/hj/SL2