Las Cruces senator introduces bill regulating microgrids

LAS CRUCES — A week ahead of a 30-day legislative session in Santa Fe, a lawmaker from Doña Ana County has filed legislation that would regulate self-generated power stations similarly to investor-owned utilities and address public concerns about the proliferation of data centers. 

Sen. Jeff Steinborn, D-Las Cruces, announced the bill Monday, styled as the Microgrid Oversight Act, which would put the facilities under the supervision of the state Public Regulation Commission as with other utilities and instituting reporting requirements on water usage.

“If the state is serious about reducing our carbon emissions and confronting climate change, we must close the gaping loophole in our microgrid power generation law, and establish meaningful renewable energy and water conservation standards for new data centers and microgrids,” Steinborn said in a written statement. “We can achieve both our economic development and environmental protection goals, if we rise to the occasion.”

In 2025, the New Mexico Legislature passed a law addressing microgrids. Critics, including state Rep. Micaela Lara Cadena, D-Mesilla, say it created a loophole temporarily allowing larger utilities to purchase energy from microgrid owners outside the benchmarks and deadlines of New Mexico’s Energy Transition Act, which requires zero-emission power generation by 2045 — even if that energy was produced by burning natural gas.

Two proposed microgrid facilities for the large AI-focused data center known as Project Jupiter, currently under construction in Santa Teresa, would generate as much as 2.8 gigawatts of electricity via natural gas, with projected annual nitrogen oxide emissions of 248.9 and 249.97 tons, respectively, according to the developer’s air quality permit applications. 

The permits disclosed higher pollution forecasts than had been projected during public meetings regarding the project, which is financed in part from tax incentives from the state and Doña Ana County. 

The growth of data centers in New Mexico and West Texas has raised public alarms about the facilities’ demands for round-the-clock power and water consumption as well as debate over whether microgrid emissions could negate New Mexico’s progress toward eliminating greenhouse gas emissions that drive climate change.

Steinborn’s bill would direct the PRC to set rules for microgrids, including a renewable portfolio standard aligned with the Energy Transition Act, and making approval of the facilities contingent on their plans to comply with renewable energy benchmarks.

Beginning in May of this year, microgrids would have to generate a minimum of 40% of their energy from renewable sources, up to 50% by 2030, 80% by 2040 and 100% by 2045. 

The bill also includes language protecting ratepayers from increases if a microgrid operator purchases power from a public utility.

Steinborn’s proposal earned the support of Stephen Fischmann, who is both a former state senator and a former PRC commissioner. “This legislation protects New Mexicans’ physical health, and reduces the substantial hidden costs of carbon and other pollutants that communities would otherwise have to bear,” he said.

Lawmakers return to Santa Fe on Monday for the month-long session, which will focus primarily on the state budget and financial matters and proposals from the governor’s office.

Algernon D'Ammassa is the Journal's southern New Mexico correspondent. He can be reached at adammassa@abqjournal.com.