Dive Brief:
- New Mexico’s three investor-owned utilities would have to set up virtual power plant programs to offset at least 15% of peak demand under a bill state lawmakers are considering.
- The New Mexico GRID Act requires the New Mexico Public Regulation Commission to lay out VPP program rules by the end of 2026. The three investor-owned utilities — the Public Service Company of New Mexico, El Paso Electric and Xcel Energy subsidiary Southwestern Public Service Co. — would have to file implementation plans by next February.
- Those VPP frameworks must allow customers to lock in compensation for at least the first five years of the program and allow third-party aggregators to compete on equal terms with utilities acting as their own resource aggregators, according to the bill.
Dive Insight:
Michael Barrio, New Mexico lead for the clean energy trade group Advanced Energy United, said in a statement that the New Mexico GRID Act would reduce retail energy costs through more efficient use of batteries, smart thermostats, electric vehicle chargers and other distributed energy resources.
“Virtual power plants can drive down electricity costs for all New Mexicans by leveraging technologies already found in homes and businesses,” Barrio said.
In a separate statement, lead bill sponsor Dayan Hochman-Vigil, a Democrat who represents parts of Albuquerque, said “hundreds of thousands” of New Mexico residents have added DERs already. The New Mexico GRID Act would make it easier for them “to participate in our energy system,” she said.
New Mexico had about 25,000 plug-in EVs on the road in January, or 1.1% of active vehicle registrations, according to state data. The state’s heat pump adoption rate in 2023 was under 10% — low in comparison to states with similar climates, National Bureau of Economic Research data shows.
In an email, Barrio told Utility Dive that the bill is “intentionally technology-neutral” and contemplates aggregating a wide array of distributed resources.
“The intent is to give the PRC flexibility to design rules that reflect the system's needs rather than favoring any single resource or technology,” Barrio said.
The New Mexico GRID Act is also known in legislative filings as the Virtual Power Plant Act. It’s one of several state VPP bills proposed or enacted this decade. In 2024, Maryland and Colorado passed laws requiring larger utilities to implement VPP programs. Last year, 35 states took more than 100 legislative or regulatory actions on VPPs or other DER aggregation initiatives, according to data collected by the NC Clean Energy Technology Center.
The Virtual Power Plant Act is not the first legislation Hochman-Vigil has introduced to address rising power demand and creaky infrastructure in the state.
In 2025, she co-sponsored H.B. 13, a bill that would have required New Mexico’s investor-owned utilities to file electric distribution system plans with regulators every three years. The filings would detail how utilities planned to improve distribution grid operations and expand capacity while reducing greenhouse gas emissions.
Like the Virtual Power Plant Act this year, the 2025 bill directed New Mexico regulators to establish a virtual power plant program that the state’s investor-owned utilities would implement. It also directed utilities to file beneficial electrification plans that would support voluntary consumer uptake of non-combustion technologies, such as heat pumps.
In a committee hearing on H.B. 13 last year, Hochman-Vigil called New Mexico’s grid “the worst in the nation” and said shoring it up is “the single most important issue I have ever worked on.”
H.B. 13 died in the New Mexico Senate in March after comfortably clearing the state House of Representatives.
