State and Local Policy Database

New Mexico

State Scorecard Rank


New Mexico

13.5Scored out of 50Updated 10/2018
State Government
Score: 3.5 out of 5
State Government Summary List All

New Mexico offers financial incentives for energy efficiency investments. It enables PACE financing but does not have any active PACE programs. The state government leads by example by requiring efficient buildings and fleets, benchmarking public buildings, and encouraging the use of energy savings performance contracts.

Financial Incentives List All

Financial incentive information for New Mexico is provided by the Database of State Incentives for Renewables and Efficiency (DSIRE New Mexico). The state does enable Property Assessed Clean Energy Financing (PACE), but it does not have any active PACE programs.

Last Updated: July 2017

Building Energy Disclosure List All

There is no disclosure policy in place.

Last Updated: July 2017

Public Building Requirements List All

New Mexico first set energy standards for public buildings in 2006. Executive Order 2006-001 called for adoption of LEED-Silver standards in new public buildings in excess of 15,000 square feet and/or using over 50kW peak electrical demand, and that such buildings achieve a minimum delivered energy performance standard of 50% of the average consumption for that building type. New construction and renovation of existing buildings between 5,000 and 15,000 square feet must achieve a minimum delivered energy performance standard of 50% of the average consumption for that building type. Renovations of existing buildings in excess of 15,000 square feet and/or using over 50 kW peak electric demand must meet LEED-Silver standards and achieve a minimum delivered energy performance standard of 50% of the U.S. energy consumption for that building type. Under Executive Order 2006-01 and Senate Bill 200 (below), the state reviews over $186 million of renovation projects in all institutions of higher learning that must meet these criteria.

New Mexico continues to implement Executive Order 2007-053, which launched a statewide energy efficiency initiative that calls for state agencies to reduce energy usage by 20% below 2005 levels by 2015.  The 2012 DOE SEP competitive award has a goal to realize 20% energy savings by the year 2020 in the General Services Department building inventory through the WISE (Whole-building Investments for Sustainable Efficiency) program.

SB 200 of 2010 established a wider building requirement for certain building projects throughout the state that receive state funding. New buildings and building additions of 3,000 square feet or more, and buildings undergoing certain system renovations must be designed and constructed to attain Energy Star certification. These buildings must meet an Energy Star rating of 75 or better. The Energy Conservation and Management Division (EMCD) encourages public entities to conduct energy audits then provides technical assistance to enable these entities to implement and fund identified measures. In addition, ECMD state tracks energy use in public buildings using Portfolio Manager. This data will be used to develop and inform a sustainable whole building energy retrofit program for public facilities. To date, the state has benchmarked approximately 20% of public buildings.

The state of New Mexico and the staff of the Energy Conservation and Management Division (ECMD) and State Energy Office (SEO) are committed in meeting the EPACT Goal of improving energy efficiency by 25%, the Advanced Energy Initiative (AEI) and the 20in20 initiative. Many steps have been taken to promote energy efficiency in New Mexico, including the implementation of many clean energy Executive Orders. The State Energy Office will also be reviewing and evaluating New Mexico's energy usage data to measure compliance with these goals. This will be reported by the end of each program year.

Last Updated: July 2017

Fleets List All

Alternative Fuel Acquisition Act, signed into law in 2002 and amended in 2007, requires that 75% of vehicles bought by state agencies and educational institutions meet or exceed national CAFE standards, are hybrid vehicles, are capable of using alternative fuel, or are plug-in electric vehicles. The Energy, Conservation, and Management division (ECMD) of the New Mexico Energy, Minerals, and Natural Resources Department (EMNRD) is required to compile and submit an annual report to the Governor and the Legislature evaluating the status and effectiveness of the Act. The state has an Alternative Fuels Program Manager who coordinates reporting for statutory requirements related to transportation and promotes New Mexico-produced gaseous fuels. The manager also promotes, coordinates, monitors, and implements state alternative fuel transportation programs to include mass transit demonstration projects and petroleum reduction strategies. 

As part of New Mexico's "Lead by Example" initiatives set forth in Executive Order 2007-053, it shall be the goal of all Executive Branch state agencies to achieve a 20 percent usage reduction below 2005 levels in the state fleet and transportation-related activities by 2015 based on the average transportation-related energy usage per state employee. Through a rideshare program, the state promotes multimodal and efficient motor transport.

New Mexico will be developing a strategic plan to advance the building of natural gas vehicle infrastructure and adoption of natural gas vehicles. The state will also be developing an outline for a pilot project that highlights how CNG can be utilized in New Mexico.

Last Updated: July 2017

Energy Savings Performance Contracting List All

The Energy, Conservation, and Management division (ECMD) of the New Mexico Energy, Minerals, and Natural Resources Department (EMNRD) houses information about the state’s ESPC statutes, including guidelines for qualifying ESCOs and a few other model documents. EMNRD has initiated and now co-chairs the New Mexico Energy Service Coalition, a public-private partnership that seeks to support the use of energy performance contracting; educate the general public on energy efficiency; develop and disseminate information on energy efficiency practices; and provide a forum for networking. Coalition members include EMNRD, energy service providers, financiers, efficient equipment suppliers and reps, building improvement and service companies, building owners and property managers, and others from schools, higher education, government, and healthcare facilities. 

ECMD has processed $49.5 million in energy performance contracting projects in the past few years. These projeccts span over 200 buildings across 13 institutions and 8.6 million square feet. These efforts are supporting New Mexico’s partnership with DOE in the Better Buildings Performance Contracting Accelerator, through which the state committed to achieve $50 million in energy performance contracting projects by 2016. The state currently has $15.7 million worth of efficiency projects under construction.

Also, House Memorial 61 (HM 61) requests a study of energy performance contracting, water conservation, and financing for public facilities in New Mexico. A task force, comprised of representatives from various governmental agencies, was created to evaluate how to expand, improve, and promote energy performance contracting.

New Mexico’s General Services Department established statewide price agreements with seven energy services companies (ESCOs) in 2015: Ameresco, Energy Control Inc./Opterra, Johnson Controls, McKinstry, NORESCO, Siemens, and YESCO (Yearout Mechanical).  These ESCOs are deemed Qualified Providers in the Energy Performance Contracting (EPC) Program managed by the Energy, Minerals and Natural Resources Department.  They are available for direct selection by eligible governmental entities, which include state/local governments, K-12 public schools, and higher educational institutions.

Last Updated: July 2017

Research & Development List All

No public research centers have a focus on energy efficiency.

Last Updated: July 2017

Score: 2.5 out of 8
Buildings Summary List All

Residential and commercial buildings must comply with the 2009 IECC. The state has completed a gap analysis and utilities offer training as part of their energy efficiency programming. The New Mexico homebuilding industry has reviewed the 2015 IECC and forwarded proposed updated language to the State’s Construction Industry Division for review. New Mexico's Construction Industry Division will now bring this proposed code update to the Construction Industries Commission for a formal process review.

Residential Codes List All

The 2009 New Mexico Energy Conservation Code (NMECC) is based on the 2009 IECC with state-specific amendments for residential building codes. All areas of the state are covered by local building jurisdictions and must meet or exceed the state minimum code. Because localities are permitted to adopt stretch codes, the City of Santa Fe and Town of Taos have adopted more stringent building codes. Builders can also use the NM 2009 Energy Conservation Code Residential Applications Manual to comply when building a passive solar or high mass home. The New Mexico Home Builders association is considering a request to update the residential code to IECC 2015.

Last Updated: August 2017

Commercial Code List All

The 2009 New Mexico Energy Conservation Code (NMECC) is based on the 2009 IECC with state-specific amendments for commercial building codes. ASHRAE Standard 90.1-2007 is an acceptable compliance path through Chapter 5 of the 2009 IECC. All areas of the state are covered by local building jurisdictions and must meet or exceed the state minimum code. Because localities are permitted to adopt stretch codes, the City of Santa Fe and Town of Taos have adopted more stringent building codes.

Last Updated: July 2016

Compliance List All
  • Gap Analysis/Strategic Compliance Plan: New Mexico completed a gap analysis and a strategic compliance plan in 2011 in partnership with the Building Codes Assistance Project.
  • Baseline & Updated Compliance Studies: NA
  • Utility Involvement: No regulatory guidelines have been established with regard to involving utilities in supporting building energy code compliance. NM’s largest investor-owned utility has provided building code training as part of its energy efficiency programming.  Utilities conducted workshops on the energy code as part of the Efficent Use of Energy Act which support energy efficiency.
  • Stakeholder Advisory Group: NA
  • Training/Outreach: New Mexico is actively engaged in providing/supporting training programs and outreach and continues to work with home builder organizations to provide information, training and technical assistance needs. It is anticipated that the industry will request that the NM Construction Industries Commission start the review process of the 2015 IECC in 2017 so that it can be adopted.

Last Updated: July 2017

Score: 1.5 out of 4
CHP Summary List All

The state has an interconnection standard that applies to CHP and favorable revenue streams available for CHP projects. One new CHP system was installed in New Mexico in 2017.

Interconnection StandardsList All

Policy: New Mexico Public Regulation Commission (PRC) rules 568 (NMAC 17.9.568) and 569 (NMAC 17.9.569)

Description: Adopted by the PRC in July 2008, New Mexico’s interconnection rules simplify the interconnection requirements of qualifying facilities up to 10 MW in capacity, and specifically allow for the interconnection of CHP. Four levels of capacity are distinguished, with smaller capacity systems requiring less stringent interconnection processes. All systems are required to comply with applicable local and national utility standards—including NEC, IEEE, and UL standards—and disconnect switches are required on all systems. The PRC may require a generating facility to obtain insurance, and interconnection customers are required to pay reasonable application fees. Municipal utilities are exempt from these standards, as they are not regulated by the PRC.

Last Updated: July 2018

Encouraging CHP as a ResourceList All

There are currently no state policies designed to acquire energy savings from CHP (like other efficiency resources) or energy generation from CHP (in terms of kWh production) that apply to all forms of CHP.

Last Updated: September 2018

Deployment IncentivesList All

Incentives, grants, or financing: New Mexico's Energy Efficiency and Renewable Energy Bonding Act authorizes bonds, to be issued to finance energy efficiency and renewable energy improvements in state government and school buildings. CHP systems are eligible for funding.

Net metering:  In January 2007, the New Mexico Public Regulation Commission (PRC) extended the availability of net metering to systems up to 80 megawatts (MW) in capacity. Net metering is available to all "qualifying facilities" (QFs), as defined by the federal Public Utility Regulatory Policies Act of 1978 (PURPA), which generally include CHP systems. Previously, net metering in New Mexico was limited to systems up to 10 kilowatts (kW) in capacity.

Net-metered customers are credited or paid for any monthly net excess generation (NEG) at the utility's avoided-cost rate. All utilities subject to PRC jurisdiction must offer net metering (municipal utilities, which are not regulated by the commission, are exempt). Customers on a time-of-use tariff are permitted to net meter. There is no statewide cap on the aggregate capacity of net-metered systems.

Last Updated: September 2018

Additional Supportive PoliciesList All

There are currently some additional supportive policies that encourage renewable-fueled CHP in New Mexico. Biomass-fueled CHP systems are eligible for a corporate tax credit through the Renewable Energy Production Tax Credit and a sales tax incentive through the Biomass Equipment & Materials Compensating Tax Deduction. Recycled energy projects may also be eligible for an Advanced Energy Tax Credit. The state energy office also partners with USDOE support services to address any needs from any entity that requests assistance.

Last Updated: September 2018

Score: 4.5 out of 20
Utilities Summary List All

New Mexico has three investor-owned electric utilities (IOUs), three natural gas utilities, and seventeen customer-owned rural electric distribution cooperatives. The 2005 Efficient Use of Energy Act requires the electric IOUs and gas utilities to acquire cost-effective and achievable energy efficiency (EE) and load management resources available in their territories (NMSA 1978, §62-17-5(G)). Electric IOUs must spend 3% of customer bills, while the gas utilities shall not spend more than 3% of total annual revenues. Currently, the three electric IOUs and the largest gas utility, New Mexico Gas, choose to recover program costs and a proposed profit incentive through a tariff rider with an annual reconciliation mechanism. These four utilities offer a variety of energy efficiency programs, including programs targeted at low-income customers and multi-family housing.

Electric IOUs have a statutory goal of saving 8% of 2005 retails sales through their EE programs by calendar year 2020. The three electric IOUs, Public Service Company of New Mexico (PNM), Southwestern Public Service Company (SPS), and El Paso Electric (EPE), are all on target to meet this savings goal. Furthermore, "New Mexico should participate in regional efforts to reduce energy consumption by twenty percent by 2020 through programs to reduce energy consumption" (NMSA 1978, §62-17-2(H)).

The rural electric distribution cooperatives are only required to examine the potential for offering cost-effective programs to reduce energy consumption or peak electricity demand (NMSA 1978, §62-17-11(A)). Each cooperative's governing body will approve any slate of programs. A percentage of the cooperatives offers energy efficiency programs as of 2016.

Last Updated: July 2018

Customer Energy Efficiency Programs List All

The Efficient Use of Energy Act (EUEA), enacted in 2005, directs New Mexico's public utilities to evaluate and implement cost-effective energy efficiency and load management programs in their resource portfolios (NMSA 1978, Chapter 62 Article 17). Electric and natural gas utilities shall achieve savings of 5% of 2005 total retail kWh sales by 2014 and 8% of 2005 total retail kWh sales by 2020. Program costs are 3% of customer bills for investor-owned electric utilities and shall not exceed 3% of total annual revenues for gas utilities. Program costs and incentives may be recovered through a tariff rider or base rates. Distribution cooperative utilities are to establish targets for energy efficiency and load management and implement those programs that are economically feasible and practical for their members and customers. Cooperative members shall approve any such programs (NMSA 1978, §62-17-11).

The NM Public Regulation Commission (NMPRC) updated its rule implementing the EUEA in October 2014 (Case No. 13-00310-UT). Beginning in 2015, each public electric and natural gas utility must file an annual application and report (17.7.2 NMAC). Public Service Company of New Mexico shall file on March 1. Southwestern Public Service Company shall file on May 1. El Paso Electric Company shall file on July 1. Natural gas utilities shall file on January 1. Distribution cooperatives shall file an annual report on May 1.

Current energy efficiency cases before the NM PRC are as follows: Public Service Company of New Mexico (Case No. 16-00096-UT), El Paso Electric Company (Case No. 16-00185-UT), Southwestern Public Service Company (Case No. 16-00110-UT), Zia Natural Gas Company (Case No. 16-00021-UT), and Raton Natural Gas Company (Case No. 15-00247-UT). New Mexico Gas Company received a variance to file in August 2016 and is expected to file shortly. Currently, the following rural electric cooperatives reported participation in 2015 energy efficiency or load management programs plus planned 2016 programs: Socorro Electric Cooperative, Farmers' Electric Cooperative, Lea County Electric Cooperative, Otero County Electric Cooperative, and Continental Divide Electric Cooperative.

Last Updated: July 2018

Energy Efficiency as a Resource List All

The Efficient Use of Energy Act (EUEA) provides the statutory requirements for incorporating energy efficiency as a resource. It directs "public utilities to develop all cost-effective and achievable energy efficiency and load management resources" (NMSA 1978, §62-17). The EUEA notes that integrated resource plans should consider energy efficiency as well as the traditional supply-side resources in formulating the plan (NMSA 1978, §62-17-10).

The New Mexico Public Regulation Commission (PRC) sets out the rules for implementing statute. The PRC's energy efficiency rule, NMAC 17.7.2, was recently updated in 2014 (Case No. 13-00310-UT).

The PRC mandates that electric utilities must file an IRP and a four-year action plan every three years. The Integrated Resource Planning (IRP) rule states that "the utility shall consider all feasible supply-side and demand-side resources" when identifying possible resource options (NMAC Energy efficiency requirements shall be considered when developing resource portfolios (NMAC

Last Updated: July 2018

Energy Efficiency Resource Standards List All

Summary: 5% reduction from 2005 total retail electricity sales by 2014, and an 8% reduction by 2020.

In 2008, New Mexico legislature passed HB 305, which amended the Efficient Use of Energy Act (first passed in 2005) and established energy efficiency targets for the state. The 2008 law required investor-owned utilities to achieve a 5% reduction from 2005 total retail electricity sales by 2014 and a 10% reduction by 2020 (see NM Stat. § 62-17-1 et seq.).

The state’s targets were amended in 2013 with the passage of HB 267. The law established a fixed tariff rider for funding energy efficiency and load management programs. The bill was a compromise among energy efficiency advocates, New Mexico’s utilities, and representatives of the Public Regulation Commission, and preserved the targets but reduced the energy savings requirement in 2020 for electric utilities from 10% to 8% of sales.

Though targets have been adjusted downward, steady funding makes it likely that long-term targets will be surpassed. If a utility determines it cannot achieve the energy saving requirements, it must report to the Commission, explain the shortfall, and propose alternative requirements based on acquiring cost-effective and achievable energy efficiency and load management resources. If the commission determines that the requirements exceed the achievable amount of energy efficiency and load management available, it may establish lower requirements for the utility (see NMAC 17.7.2).

Distribution cooperative utilities, which are not fully regulated by the PRC, must annually consider self-imposed electricity reduction targets and design demand-side management programs to enable them to meet those targets. Each cooperative utility must submit a report to the PRC annually describing their demand-side management efforts from the previous year.

New Mexico has no natural gas EERS.

Last Updated: July 2018

Utility Business Model List All

Currently no utility has a decoupling or lost revenue adjustment mechanism in New Mexico. PNM has filed a new application in Case No. 18-00043-UT proposing a Lost Contribution to Fixed Cost Mechanism. The public hearing in this case is scheduled for late October 2018.

The Efficient Use of Energy Act and the Rule do allow a utility to propose a profit incentive mechanism that is based on satisfactory program performance and does not exceed the product of the approved annual program costs and its weighted average cost of capital. PNM, EPE, and SPS all earn an incentive award. NM Gas proposed an incentive award in its Plan Year 2017 program for the first time.

El Paso Electric's 2016 profit incentive was decided in a stipulated agreement in Case No. 13-00176-UT and was set at 7% of a 2016 budget of approximately $5.8 million. Southwestern Public Service's 2016 profit incentive was decided in Case No. 15-00119-U. It earns a base level incentive of 6.8% on a budget of approximately $11.5 million, based on a minimum cumulative savings threshold. This amount can be adjusted downward if there is a shortfall in low income program spending in program year 2016. Each GWh of additional savings above 31.805 net customer GWh earns an additional 0.1% in profit incentive, up to a maximum of 7.11%. Finally, Public Service Company of New Mexico's 2016 profit incentive was also decided in a stipulated agreement in Case No. 14-00310-UT and is based on a linear progression of cumulative savings towards the 2020 goal. The 2016 profit incentive is conditional on achieving energy savings of 6% of 2005 retail sales and is approximately 7.1% of program costs.

Plan Year 2017 energy efficiency cases before the Commission are:

  • PNM, Case No. 16-00096-UT
  • SPS, Case No. 16-00110-UT
  • EPE, Case No. 16-00185-UT
  • New Mexico Gas, Case No. 16-00100-UT
  • Zia Natural Gas, Case No. 16-00021-UT
  • Raton Natural Gas, Case No. 15-00247-UT (the original application for Plan Year 2016 was rejected by the Commission in July 2016, so RNG is in the process of proposing a new EE plan that will cover the remainder of 2016 and PY 2017).

Last Updated: June 2018

Evaluation, Measurement, & Verification List All
  • Primary cost-effectiveness test(s) used: utility cost test  

  • Secondary cost-effectiveness test(s) used: none 

Section 8 of the Efficient Use of Energy Act concerns the legislative requirements for measurement and verification of energy efficiency programs. Annual reports must be submitted by each utility and a comprehensive M&V report must be conducted by an independent evaluator every three years. Typically, a subset of programs is independently evaluated every year. New programs are independently evaluated in their first year, and every year the two programs with the highest projected energy savings are evaluated. The Commission has oversight in selecting the independent program evaluator and uses an RFP process for this purpose.  

According to the Database of State Efficiency Screening Practices (DSESP), New Mexico uses the Utility Cost Test (UCT) as the primary test for decision making and evaluating program cost-effectiveness. The benefit-cost tests are required for total program level screening. 

Further information on cost-effectiveness screening practices for New Mexico is available in the Database of State Efficiency Screening Practices (DSESP), a resource of the National Efficiency Screening Project (NESP).  


Last Updated: January 2019

Guidelines for Low-Income Energy Efficiency Programs List All

Requirements for State and Utility Support of Low-Income Energy Efficiency Programs

The state’s energy efficiency targets, first established in 2005 within the Efficient Use of Energy Act, were amended in 2013 with the passage of HB 267. The legislation calls for an 8% reduction of energy consumption as a percent of sales by 2020 and also directs that no less than 5% of the amount received by the public utility for program costs shall be specifically directed to energy efficiency programs for low-income customers.

Cost-Effectiveness Rules for Low-Income Energy Efficiency Programs

The utility cost test (UCT) is conducted in New Mexico and is considered to be the primary test for decision making and evaluating program cost effectiveness. HB 267 directs that “…In developing this test for energy efficiency and load management programs directed to low-income customers, the commission shall either quantify or assign a reasonable value to reductions in working capital, reduced collection costs, lower bad-debt expense, improved customer service effectiveness and other appropriate factors as utility system economic benefits.”

It was later codified in New Mexico Administrative Code that “in developing the utility cost test for energy efficiency and load management measures and programs directed to low-income customers, unless otherwise quantified in a commission proceeding, the public utility shall assume that 20% of the calculated energy savings is the reasonable value of reductions in working capital, reduced collection costs, lower bad-debt expense, improved customer service, effectiveness, and other appropriate factors qualifying as utility system economic benefits” [ NMAC - Rp. NMAC, 1-1-15].

Last updated: July 2018

Self Direct and Opt-Out Programs List All

A self-direct option is offered statewide in the territories of three investor-owned utilities. Eligible customers must have electricity consumption greater than 7,000 MWh per year. Participants can receive credit for up to 70% of the annual energy efficiency rider. Self-direct customers provide their own engineering analysis and must meet the same total resource cost test as all the other industrial and commercial offerings. The customer must demonstrate to the reasonable satisfaction of the utility that its expenditures are cost-effective. Eligible expenditures must have a simple payback period of more than one year but less than seven years.

There is no provision for large customers to opt out entirely from paying for energy efficiency programs.

Last Updated: July 2018

Data AccessList All

New Mexico has no policies in place that require utilities to release energy use data to customers or third parties.

Last Updated: July 2018

Score: 1.5 out of 10
Transportation Summary List All

New Mexico has established a freight plan, but the state has not otherwise pursued policies to encourage efficient transportation system development. 

Tailpipe Emission Standards List All

No policy in place or proposed.

Last Updated: July 2017

Transportation System Efficiency List All

Transportation and Land use Integration: No policy in place or proposed.

VMT Targets: No policy in place or proposed.

Complete Streets: No policy in place or proposed.

FAST Freight Plans and Goals: New Mexico has a state freight plan that identifies a multimodal freight network, but it does not include freight energy or greenhouse gas reduction goals.

Last Updated: July 2017

Transit Funding List All

No policy in place or proposed.

Last Updated: July 2017

Incentives for High-Efficiency Vehicles List All

No policy in place or proposed.

Last Updated: July 2017

Equitable Access to TransportationList All
New Mexico does not have any state programs in place to incentivize the creation of low-income housing near transit facilities, but it does consider the proximity of transit facilities when distributing federal Low-Income Housing Tax Credits to qualifying property owners. Last Updated: July 2017
Appliance Standards
Score: 0 out of 3
Appliance Standards Summary List All

New Mexico has not set appliance standards beyond those required by the federal government.

Last Reviewed: June 2019