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 Sen. Muñoz
/Rep. Dixon
LAST UPDATED
ORIGINAL DATE 1/30/2025
SHORT TITLE Grid Modernization Roadmap
BILL
NUMBER Senate Bill 142
ANALYST Davidson
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected
$100 Recurring
Grid Modernization
Grant Fund
$200 Recurring
Grid Modernization
Grant Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Sources of Information
LFC Files
Agency Analysis Received From
Higher Education Department (HED) Public Regulation Commission (PRC) Energy, Minerals and Natural Resource Department (EMNRD)
SUMMARY
Synopsis of Senate Bill 142
Senate Bill 142 (SB142) amends language regarding the Grid Modernization Roadmap and
Grant Program, requiring the Energy, Minerals and Natural Resources Department (EMNRD) to
work in consultation with the Public Regulation Commission (PRC) when developing a roadmap
for modernizing the state’s electric grid. The bill adds language allowing EMNRD to consider
the speed of project deployment when considering applications for the grant program and allows
school districts and charter schools to apply for grants. SB142 amends the definition of grid
modernization to include:
Projects that accommodate or facilitate the integration of “net-zero carbon resources”
with the electric distribution grid;
Construction of increased electric grid distribution capacity and transmission grid
infrastructure; and
Enabling the application of artificial intelligence to identify and find opportunities to
reduce or eliminate methane leaks. Senate Bill 142 – Page 2
The bill defines a “net-zero carbon resource” as “an electricity generation resource that emits no
carbon dioxide into the atmosphere or reduces methane emitted into the atmosphere in an amount
equal to no less than one-tenth of the tons of carbon dioxide emitted into the atmosphere”
SB142 appropriates $100 thousand from the grid modernization grant fund to EMNRD and $200
from the grid modernization grant fund to PRC for the implementation of the bill for expenditure
in fiscal years 2025 and 2026.
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 appropriation of $300 thousand contained in this bill is a recurring expense to the grid
modernization grant fund. Although SB142 does not specify future appropriations, establishing
funding for program support could create an expectation that the support will continue in future
fiscal years; therefore, this cost is assumed to be recurring. Any unexpended or unencumbered
balance remaining at the end of FY26 shall revert to the grid modernization grant fund.
SIGNIFICANT ISSUES
The latest assessment report from the EMNRD’s Energy Conservation and Management
Division on the state’s electrical grid noted reliance on the state’s grid is rapidly increasing due
to expanded electrification throughout the state and the state’s shift from conventional resources
to intermittent renewables. The report also highlighted how the state’s electrical grid, due to
accelerating demand outstripping system capacity, is becoming a bottleneck for statewide
economic development.
The report states that:
New Mexico should build on recent smart meter deployments at local utilities to cultivate
new markets in demand response and aggregated distributed resources.
The state’s transmission grid operators should deploy grid-enhancing technologies and
utility-scale storage to expand existing capacity and expedite resource interconnection.
Regulators and industry stakeholders should reexamine current utility incentive structures
and design a regulatory framework that is better aligned with the goals of the energy
transition.
Analysis from EMNRD states SB142 codifies the already existing relationship between EMNRD
and PRC. However, EMNRD analysis did point to definitional issues with SB142, particularly its
definition of “net-zero carbon resources.” EMNRD states that the bill’s current definition (see
bill summary) would include gas power plants using 90 percent carbon capture. EMNRD asserts
that:
Defining gas power generation as a “net-zero carbon resource” is in conflict with the
existing definitions and intention within the 2019 Energy Transition Act to define gas
power generation as an energy transition element, but not a “net-zero carbon resource,”
which implies gas power generation be considered clean energy and at parity with
renewable, true zero-carbon power generation. Under the ETA, net-zero carbon resources Senate Bill 142 – Page 3
were not intended to include natural gas, even with carbon capture. The ETA categorizes
natural gas as a transition fuel, meant to phase out over time.
Further, the bill adds “artificial intelligence technology to identify methane leaks” as a project
eligible for grants. EMNRD notes such a project would be better suited for the natural gas
pipeline grid.
Analysis from the Higher Education Department noted projects related to construction remodels,
renovations, or infrastructure improvements go through an approval process that includes green
screen requirements, current energy codes, and Leadership in Energy and Environmental Design
standards, in addition to other levels of analysis. The agency noted the projects highlighted in the
bill would also be subject to similar levels of analysis.
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