New Mexico’s Renewable Portfolio Standard (RPS) is intended to increase use of renewable resources in the state by establishing the minimum amount of renewable energy that the state’s electricity providers must sell in a given year. This legally-established renewable energy procurement goal gradually increases over time to meet the overall target of 20% renewable power by 2020.
The state profile below explores the design of this policy, highlighting the factors that influence the success of New Mexico’s RPS goals and the tradeoffs inherent to it. Once you’re comfortable with the information on this page, you can evaluate the policy’s expected viability with the RPS Feasibility Calculator. You can also use the calculator to change the policy requirements, trajectory, cost cap, and more, to see how altering New Mexico’s policy design affects its success.
- 20% of the state's energy consumption must be from renewable sources by 2020, subject to the cost cap
- Carve-out for solar, wind, distributed generation, other non-wind non-solar technologies
- Explicit cost cap at 3% of annual revenue
Carve-outs can create economic opportunities in the state by introducing new or promising technologies into the market. However, these standards limit the utilities’ ability to substitute between renewable energy sources, potentially increasing the cost of the policy. New Mexico has a diverse system of four technology requirements that begin in 2011; more than half of the REA is comprised of carve-outs. Together, wind and solar make up 50% of the annual REA requirements. See the statute table below for addiontal details.
Compare the goal established in the RPS to what is being achieved.
The following chart compares the variety of sources currently used to generate New mexico’s electricity. The color of each bar is indicative of the carbon intensity of each source.
Cost Cap Details
New Mexico has an explicit ‘cost cap’. known as reasonable cost thresholds (RCTs) in NMAC 17.9.572.12 to protect the consumer from price increases due to REA compliance. Public utilities will not be required to add renewable energy to their portfolio if the costs of doing so exceeds 3% of total yearly revenue.
Historic retail prices (¢ / kWh)
The above chart presents historical data from the Energy Information Administration (EIA) on the price at which residential customers can purchase electricity. Typically, states set explicit cost caps relative to the retail price (as opposed to the lower wholesale price).
New Mexico’s Renewable Energy Act (REA) has two schedules overseen by the Public Regulation Commission (PRC); a primary RPS for investor-owned utilities starting in 2006, requiring 20% of total retail sales to New Mexico customers be from renewable energy by 2020. A secondary RPS applies to rural electric cooperatives requiring 10% by 2020. All of the defined carve-outs apply to the primary RPS only, and in 2013 the wind carve-out was increased from 20 to 30%.
RPS Technical Details
|Eligible Technologies||Solar, wind, geothermal, hydropower facilities (post 2007), fuel cells using non-fossil fuel, and various biomass resources (such as: agriculture or animal waste, small diameter timber, salt cedar and other phreatophyte or woody vegetation removed from river basins or watersheds in New Mexico, landfill gas and anaerobically digested waste biomass)|
|Geographic Eligibility||Renewable Energy Credits (RECs) may be used for compliance, but must be contracted for delivery, consumed, or generated by an end-use customer in New Mexico, unless determined otherwise by the PRC|
|Percent of Total Load||Primary RPS: 67.7%, Secondary RPS: 20.8%|
|Technology Requirements||Carve-outs only apply to IOUs: Wind—30% of annual req.; Solar—20% annual req.; Geothermal, hydro (post 2007), and other renewables—5% annual req. starting in 2011; Distributed Generation—1.5% annual req. by 2011, 3% by 2015|
|Sectors||Investor-Owned Utilities, Rural Electric Cooperatives|
Tools and other links
- Database of State Incentives for Renewables & Efficiency (DSIRE) RPS data page—Datasets available for download in .xlsx format
- National Renewable Energy Laboratory (NREL) Energy Analysis Portal—Resources on renewable energy policies, and interactive web tools
- Energy Information Administration (EIA) U.S. Energy Mapping System—An interactive energy resource map with a myriad of data layers to explore
- DSIRE State RPS Page—Visit for detailed information on RPS and complete legislation
- New Mexico Public Regulation Commission—Utilities and Renewable Energy Page—An overview of REA, state renewable capacity, and voluntary programs