SB 235 New Mexico Senate · 2026 Regular Session

MICROGRID OVERSIGHT ACT

SB 235, the Microgrid Oversight Act, requires microgrids (systems generating at least 20 megawatts that can operate independently or connected to the grid) to transition to 100% zero-carbon electricity by 2045 through a renewable portfolio standard. Microgrid owners must report annually on energy generation (by source), water use, and compliance status, while electric utilities cannot raise rates to cover microgrid infrastructure costs. The law directly affects microgrid operators and electric utilities, imposing new reporting obligations and prohibiting rate increases tied to microgrid development. It creates a framework for oversight by the Public Regulation Commission, ensuring microgrids meet renewable energy targets without passing infrastructure costs to customers.

Issues: ✓ Energy ✓ Environment

Bill status passed 3 of 5 stages cleared

Introduction

Feb 2026

Committee Review

Feb 2026

Senate Passage

Feb 2026

House Passage

Governor

Introduced Feb 3, 2026 Last action Mar 24, 2026

Maddy AI version diff · 1 comparison

What changed between versions

introduced version → CO substitute · 7 edits

MODERATE

The bill was amended to strengthen the Microgrid Oversight Act by adding new renewable energy definitions, expanding compliance options for microgrids, and clarifying utility rate protections. The substitute version includes more specific renewable resource categories and alternative compliance mechanisms for low-income households, while maintaining the core requirement that microgrids meet renewable portfolio standards.

Scope change

The bill's scope remains focused on microgrids in New Mexico, but the definition of renewable energy resources was expanded to include additional categories like fuel cells and landfill gas, and the compliance framework now includes alternative options for microgrids to meet renewable energy requirements.

DEFINITION

Added new renewable energy resource categories including fuel cells that do not use fossil fuels, landfill gas, and anaerobically digested waste biogas to the list of qualifying renewable resources.

Added definition for 'low-income household' to establish eligibility criteria for alternative compliance options, defined as households earning at or below 80% of area median income or enrolled in low-income programs.

Modified biomass resource definition to limit eligibility to specific types like agriculture waste, animal waste, and small-diameter timber, with certification requirements.

REQUIREMENT

Added alternative compliance mechanism allowing microgrids to satisfy up to 10% of renewable energy requirements through residential solar systems serving low-income households.

Modified renewable energy portfolio requirements to include specific percentages (40%, 50%, 80%, 100%) with corresponding deadlines from 2026 through 2045.

ENFORCEMENT

Added authority for the commission to prohibit operation of microgrids that fail to meet renewable portfolio standard requirements.

TECHNICAL

Added reporting requirements for microgrids to include total water use and information related to alternative compliance options.

Floor votes

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Feb 15, 2026

Introduced

Sent to House Judiciary Committee

lower

Feb 14, 2026

Upper · Passed

passed Senate

upper

Feb 13, 2026

Upper · Passed

DO PASS committee report adopted

upper

Feb 10, 2026

Upper · Passed

DO NOT PASS, replaced with committee substitute

upper

Feb 3, 2026

Introduced

Sent to Senate Committees' Committee & Senate Conservation Committee & Senate Tax, Business and Transportation Committee

upper

4 primary · 0 co-sponsors