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-HOUSE BILL 226
-57TH LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 2026
-INTRODUCED BY
-Randall T. Pettigrew and Jimmy G. Mason and John Block
-AN ACT
-RELATING TO RENEWABLE ENERGY; AMENDING THE RURAL ELECTRIC
-COOPERATIVE ACT AND THE RENEWABLE ENERGY ACT TO INCLUDE NATURAL
-GAS USING COMBINED CYCLE TECHNOLOGY IN THE DEFINITION OF
-"RENEWABLE ENERGY RESOURCE".
-BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
-SECTION 1.  Section 62-15-37 NMSA 1978 (being Laws 2007,
-Chapter 4, Section 4, as amended) is amended to read:
-"62-15-37.  DEFINITIONS--ENERGY EFFICIENCY--RENEWABLE
-ENERGY.--As used in the Rural Electric Cooperative Act:
-A.  "energy efficiency" means measures, including
-energy conservation measures, or programs that target consumer
-behavior, equipment or devices to result in a decrease in
-consumption of electricity without reducing the amount or
-quality of energy services;
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-B.  "renewable energy" means electric energy
-generated by use of renewable energy resources and delivered to
-a rural electric cooperative;
-C.  "renewable energy certificate" means a
-certificate or other record, in a format approved by the public
-regulation commission, that represents all the environmental
-attributes from one megawatt-hour of electricity generated from
-renewable energy;
-D.  "renewable energy resource" means electric or
-useful thermal energy:
-(1)  generated by use of the following energy
-resources, with or without energy storage and delivered to a
-rural electric cooperative:
-(a)  solar, wind, [and] geothermal and
-natural gas using combined cycle technology;
-(b)  hydropower facilities brought in
-service on or after July 1, 2007;
-(c)  other hydropower facilities
-supplying no greater than the amount of energy from hydropower
-facilities that were part of an energy supply portfolio prior
-to July 1, 2007;
-(d)  fuel cells that do not use fossil
-fuels to create electricity;
-(e)  biomass resources, limited to
-agriculture or animal waste, small diameter timber, not to
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-exceed eight inches, salt cedar and other phreatophyte or woody
-vegetation removed from river basins or watersheds in New
-Mexico; provided that these resources are from facilities
-certified by the energy, minerals and natural resources
-department to:  1) be of appropriate scale to have sustainable
-feedstock in the near vicinity; 2) have zero life cycle carbon
-emissions; and 3) meet scientifically determined restoration,
-sustainability and soil nutrient principles; and
-(f)  landfill gas and anaerobically
-digested waste biomass; and
-(2)  does not include electric energy generated
-by use of fossil fuel or nuclear energy, except for natural gas
-using combined cycle technology;
-E.  "useful thermal energy" means renewable energy
-delivered from a source that can be metered and that is
-delivered in the state to an end user in the form of direct
-heat, steam or hot water or other thermal form that is used for
-heating, cooling, humidity control, process use or other valid
-end-use energy requirements and for which fossil fuel or
-electricity would otherwise be consumed;
-F.  "zero carbon resource" means an electricity
-generation resource that emits no carbon dioxide into the
-atmosphere, or that reduces methane emitted into the atmosphere
-in an amount equal to no less than one-tenth of the tons of
-carbon dioxide emitted into the atmosphere, as a result of
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-electricity production; and
-G.  "zero carbon resource standard" means providing
-New Mexico rural electric cooperative retail customers with
-electricity generated from one hundred percent zero carbon
-resources."
-SECTION 2.  Section 62-16-3 NMSA 1978 (being Laws 2004,
-Chapter 65, Section 3, as amended) is amended to read:
-"62-16-3.  DEFINITIONS.--As used in the Renewable Energy
-Act:
-A.  "commission" means the public regulation
-commission;
-B.  "energy storage" means batteries or other means
-by which energy can be retained and delivered as electricity
-for use at a later time;
-C.  "municipality" means a municipal corporation,
-organized under the laws of the state, and H class counties;
-D.  "public utility" means an entity certified by
-the commission to provide retail electric service in New Mexico
-pursuant to the Public Utility Act but does not include rural
-electric cooperatives;
-E.  "reasonable cost threshold" means an average
-annual levelized cost of sixty dollars ($60.00) per megawatt-
-hour at the point of interconnection of the renewable energy
-resource with the transmission system, adjusted for inflation
-after 2020;
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-F.  "renewable energy" means electric energy
-generated by use of renewable energy resources and delivered to
-a public utility;
-G.  "renewable energy certificate" means a
-certificate or other record, in a format approved by the
-commission, that represents all the environmental attributes
-from one megawatt-hour of electricity generated from renewable
-energy;
-H.  "renewable energy resource" means the following
-energy resources, with or without energy storage:
-(1)  solar, wind, [and] geothermal and natural
-gas using combined cycle technology;
-(2)  hydropower facilities brought in service
-on or after July 1, 2007;
-(3)  biomass resources, limited to agriculture
-or animal waste, small diameter timber, not to exceed eight
-inches, salt cedar and other phreatophyte or woody vegetation
-removed from river basins or watersheds in New Mexico; provided
-that these resources are from facilities certified by the
-energy, minerals and natural resources department to:
-(a)  be of appropriate scale to have
-sustainable feedstock in the near vicinity;
-(b)  have zero life cycle carbon
-emissions; and
-(c)  meet scientifically determined
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-restoration, sustainability and soil nutrient principles;
-(4)  fuel cells that do not use fossil fuels to
-create electricity; and
-(5)  landfill gas and anaerobically digested
-waste biogas;
-I.  "renewable portfolio standard" means the minimum
-percentage of retail sales of electricity by a public utility
-to electric consumers in New Mexico that is required by the
-Renewable Energy Act to be from renewable energy;
-J.  "renewable purchased power agreement" means an
-agreement that binds an entity generating power from renewable
-energy resources to provide power at a specified price and
-binds the purchaser to that price;
-K.  "zero carbon resource" means an electricity
-generation resource that emits no carbon dioxide into the
-atmosphere, or that reduces methane emitted into the atmosphere
-in an amount equal to no less than one-tenth of the tons of
-carbon dioxide emitted into the atmosphere, as a result of
-electricity production; and
-L.  "zero carbon resource standard" means providing
-New Mexico public utility customers with electricity generated
-from one hundred percent zero carbon resources."
-- 6 -
-.233069.1
+Fiscal impact reports (FIRs) are prepared by the Le gislative Finance Committee (LFC) for standing finance
+committees of the Legislature. LFC does not assume responsibility for th e accuracy of these reports if they
+are used for other purposes.
+
+F I S C A L    I M P A C T    R E P O R T
+
+BILL NUMBER: House Bill 226
+SHORT TITLE: Natural Gas As Renewable Energy
+SPONSOR: Pettigrew/Mason/Block
+LAST
+UPDATE:
+ ORIGINAL
+DATE:
+
+02/13/26
+
+ANALYST: Davidson
+
+ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
+(dollars in thousands)
+Agency/Program FY26 FY27 FY28 3 Year
+Total Cost
+Recurring or
+Nonrecurring
+Fund
+Affected
+EMNRD No fiscal impact No fiscal
+impact
+No fiscal
+impact
+No fiscal
+impact Recurring General Fund
+PRC No fiscal
+impact $55.5 $58.7 $114.2 Recurring General Fund
+Parentheses ( ) indicate expenditure decreases.
+*Amounts reflect most recent analysis of this legislation.
+
+Duplicates House Bill 327 from the 2025 Legislative Session
+
+Sources of Information
+
+LFC Files
+
+Similar Analysis from the 2025 Legislative Session
+Public Regulation Commission
+Energy, Minerals and Natural Resources Department
+New Mexico Attorney General
+
+Agency or Agencies That Were Asked for Analysis but did not Respond
+New Mexico Environment Department
+Energy, Minerals and Natural Resources Department
+New Mexico Attorney General
+
+SUMMARY
+
+Synopsis of House Bill 226
+
+House Bill (HB226) adds the term "natural gas using combined cycle technology” to the list of
+renewable energy resources in both the Rural Electric Cooperative Act (Section 62-15-37 NMSA
+1978) and the Renewable Energy Act (Section 62-16-13 NMSA 1978). The bill also adds the
+following exclusion to the definition in the Ru ral Electric Cooperative Act: “does not include
+electric energy generated by use of fossil fuel or nuclear ener gy, except for natural gas using
+combined cycle technology.”
+House Bill 226 - Page 2
+
+This bill does not contain an effective date and, as  a result, would go into effect 90 days after the
+Legislature adjourns, which is May 20, 2026.
+
+FISCAL IMPLICATIONS
+
+From analysis from an identical  bill introduced during the 2025 legislative session, the Public
+Regulation Commission (PRC), which will be re sponsible for rulemaking and implementation,
+estimates an additional annual cost of $55.5 t housand in FY26 and $58.7  thousand in FY27 for
+staff time if HB226 is enacted.
+
+From analysis from an identical bill in 2025, the Energy, Minerals and Natural Resources
+Department (EMNRD) does not anticipate a direct fiscal impact.
+
+SIGNIFICANT ISSUES
+
+The proposed definition changes in HB226 may ch allenge nationally agreed definitions, run
+counter to the intent of the tw o acts to be amended, undermine the state’s renewable portfolio
+standards, and could have negative impacts on other state and federal programs.
+
+According to EMNRD:
+Defining fossil fuels as a renewable ener gy resource based on the efficiency of
+technology runs counter to established definitions and understanding of what a renewable
+energy resource is: i.e., energy derived from na tural sources that are replenished at a
+higher rate than they are consumed or are replenished on a human rather than geologic
+timescale. Even highly efficient combined cycle gas turbines consume fossil gas, a
+resource which is not renewable within a hu man lifetime, at a greater rate than it is
+created.
+
+HB226 fails to define “combine d cycle technology.” Given th e lack of definition, EMNRD
+presumes that:
+The proposed language means a combined-cycle gas turbine technology that utilizes both
+the Brayton cycle of a natural gas fired turbin e engine while also utilizing the heat from
+the exhaust gases in a fired or  unfired Rankine cycle waste heat boiler, thus recovering
+over 60 percent of the input energy to create el ectricity. This is the common definition of
+“combined cycle technology” in the power generation industry.
+
+The provisions of HB226 skirt the zero carbon emission provision s in the state’s renewable
+portfolio standards (RPS) and Section 62-15-34 of the Rural Electric Cooperative Act. These
+standards mandate 100 percent of  electricity be generated by  zero carbon resources by 2045 and
+2050, respectively. The PRC asserts: “By allowing natural gas to be defined as a renewable
+resource, utilities may meet annual RPS requirements but won’ t achieve the 2045 zero-carbon
+target.”
+
+Further, HB226’s proposed definitions do not a lign with PRC or federal definitions. New
+Mexico currently uses the Western Renewa ble Energy Generation Information System
+(WREGIS), an independent, renewable energy tracking system for a 14- state region, to track
+“renewable energy certificates” and demons trate RPS compliance. The PRC and NMRETA
+House Bill 226 - Page 3
+
+concur that allowing a carbon-emitting generating source would impact verification.
+
+The Attorney General (NMAG) states that “a de finition encompassing a fossil fuel source may
+cause conflict with the policy objectives of othe r participating states, which may manifest as
+legal challenges.” NMRETA suggests the defini tion of renewable ener gy may also generate
+House Bill 226 – Page 3 conflicts with pr ojects supported under the Renewable Energy
+Financing District Act (5-18 NMSA 1978).
+
+EMNRD further cautions:
+Not all combined cycle technology includes carbon-capture or waste heat boilers, leaving
+open the possibility that a non-renewable and potentially carbon emitting technology
+would be enshrined in legislation as a renewable energy resource.
+
+CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
+
+House Bill 226 is a duplicate of House Bill 327 from the 2025 Legislative Session.
+
+TECHNICAL ISSUES
+
+House Bill 226 lacks a definition for combined-cycle technology.
+
+AD/cf/ct