HB 311

                                1  HOUSE BILL 311
                                2      57TH LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 2026
                                3  INTRODUCED BY
                                4  Dayan Hochman-Vigil
                                5
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                                8
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                                10  AN ACT
                                11   RELATING TO UTILITIES; ENACTING THE VIRTUAL POWER PLANT ACT;
                                12   REQUIRING ELECTRIC PUBLIC UTILITIES TO IMPLEMENT VIRTUAL POWER
                                13   PLANT PROGRAMS; PROVIDING AUTHORITY FOR THE PUBLIC REGULATION
                                14   COMMISSION TO PROMULGATE RULES RELATED TO VIRTUAL POWER PLANT
                                15   PROGRAMS; ESTABLISHING PARTICIPATION AND COST RECOVERY
                                16   CONDITIONS FOR A VIRTUAL POWER PLANT PROGRAM.
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                                18   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
                                19        SECTION 1.    A new section of Chapter 62 NMSA 1978 is
                                20   enacted to read:
                                21        "[NEW MATERIAL] SHORT TITLE.--This act may be cited as the
                                22   "Virtual Power Plant Act"."
                                23        SECTION 2.    A new section of Chapter 62 NMSA 1978 is
                                24   enacted to read:
                                25        "[NEW MATERIAL] DEFINITIONS.--As used in the Virtual Power
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                                1    Plant Act:
                                2  A.   "commission" means the public regulation
                                3    commission;
                                4  B.   "distributed energy resource" means distributed
                                5    generation, energy storage systems, electric vehicles,
                                6    microgrids, smart panels, fuel cells and demand-side management
                                7    measures that are deployed at the distribution system level on
                                8    either the customer or utility side of the meter;
                                9  C.   "distributed energy resource aggregator" means a
                                10   person that manages customer enrollment, participation and
                                11   performance-based compensation and ensures the delivery of grid
                                12   services from the distributed energy resources in a virtual
                                13   power plant;
                                14  D.   "electric public utility" means an electric
                                15   public utility regulated by the commission pursuant to the
                                16   provisions of the Public Utility Act that is not also a
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                                17   cooperative nonprofit membership corporation organized pursuant
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                                18   to the provisions of the Rural Electric Cooperative Act;
                                19  E.   "grid service" means a capacity, an energy or an
                                20   ancillary service, including avoided or deferred infrastructure
                                21   costs, that supports grid operations;
                                22  F.   "performance-based compensation" means payments
                                23   made in return for, and in proportion to, the provision of grid
                                24   services by a virtual power plant;
                                25  G.   "performance requirements" means the terms by
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                                1    which a distributed energy resource aggregator is eligible for
                                2    performance-based compensation; and
                                3  H.   "virtual power plant" means an aggregation of
                                4    distributed energy resources that are collectively organized
                                5    via software to provide grid services, reducing or shifting
                                6    customer load or exporting power as needed."
                                7  SECTION 3.     A new section of Chapter 62 NMSA 1978 is
                                8    enacted to read:
                                9  "[NEW MATERIAL] VIRTUAL POWER PLANT PROGRAMS--RULEMAKING
                                10   AUTHORITY.--
                                11  A.   On or before December 31, 2026, the commission
                                12   shall promulgate rules to require an electric public utility to
                                13   implement a virtual power plant program that creates a
                                14   framework enabling distributed energy resources to be
                                15   aggregated, by the utility or a third party, as a virtual power
                                16   plant to provide grid services.
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                                17  B.   In promulgating rules regarding virtual power
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                                18   plant programs, the commission shall:
                                19  (1)   consider the potential interaction between
                                20   a virtual power plant program and other programs an electric
                                21   public utility is required to implement;
                                22  (2)   identify strategies to maximize benefits
                                23   in avoided generation, transmission and distribution
                                24   investments through the implementation of virtual power plant
                                25   programs;
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                                1  (3)   require electric public utilities to file
                                2    tariffs establishing performance requirements and performance-
                                3    based compensation specific to the applicable technologies that
                                4    may be used as part of a virtual power plant program; provided
                                5    that the tariff shall allow owners or end-users of distributed
                                6    energy resources to lock in the compensation levels in effect
                                7    at the time that the commission approves the virtual power
                                8    plant program for a period of five years;
                                9  (4)   prescribe methods for setting and revising
                                10   performance-based compensation that reflect the full value of
                                11   grid services provided by a virtual power plant program;
                                12  (5)   ensure that:
                                13  (a)   an electric public utility serving
                                14   as a distributed energy resource aggregator does not have a
                                15   competitive advantage over a third-party aggregator based on
                                16   access to customer data, marketing or other information to
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                                17   which the electric public utility has access;
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                                18  (b)   a distributed energy resource
                                19   aggregator or an owner or end-user of a distributed energy
                                20   resource is not disqualified from participation in a virtual
                                21   power plant program based on that distributed energy resource
                                22   aggregator's or owner's or end-user's underlying rate schedule
                                23   or receipt of other incentives; and
                                24  (c)   a distributed energy resource
                                25   aggregator or an owner or end-user of a distributed energy
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                                1    resource shall not be compensated more than once for providing
                                2    a service; and
                                3  (6)   determine:
                                4  (a)   an initial virtual power program
                                5    parameter that shall be set at no less than fifteen percent of
                                6    peak demand during the first five years of the program;
                                7  (b)   an appropriate regulatory process
                                8    for review and revision of virtual power plant program
                                9    parameters, including expanding the program size after the
                                10   first five years of the program;
                                11  (c)   data access requirements for
                                12   distributed energy resource aggregators, including third-party
                                13   aggregator access to customer data, grid data and hosting
                                14   capacity analysis;
                                15  (d)   grid event parameters for when and
                                16   how the owner or end-user of a distributed energy resource
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                                17   shall respond to a grid event, including frequency, duration
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                                18   and notice; and
                                19  (e)   protocols for stakeholders to
                                20   provide input on the virtual power plant programs proposed by
                                21   electric utilities."
                                22        SECTION 4.     A new section of Chapter 62 NMSA 1978 is
                                23   enacted to read:
                                24        "[NEW MATERIAL] VIRTUAL POWER PLANT PROGRAM--
                                25   APPLICATIONS.--
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                                1  A.   No later than February 1, 2027, an electric
                                2    public utility shall submit an application to implement a
                                3    virtual power plant program.
                                4  B.   The commission shall approve, deny or order
                                5    revisions to an electric public utility's application to
                                6    implement a virtual power plant program."
                                7  SECTION 5.     A new section of Chapter 62 NMSA 1978 is
                                8    enacted to read:
                                9  "[NEW MATERIAL] ELIGIBILITY OF ENERGY STORAGE SYSTEMS.--
                                10  A.   To be eligible to participate in a virtual power
                                11   plant program, an owner or end-user of an energy storage
                                12   resource with a usable energy capacity of one megawatt or
                                13   higher shall be subject to minimum wage and benefit rate
                                14   requirements pursuant to the provisions of the Public Works
                                15   Minimum Wage Act.
                                16  B.   The distributed energy resource aggregator
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                                17   administering a virtual power plant program shall file an
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                                18   affidavit with the commission and the workforce solutions
                                19   department stating that all energy storage resources with a
                                20   usable energy capacity of one megawatt or higher participating
                                21   in the program are in compliance with this section.
                                22  C.   If the distributed resource aggregator adds
                                23   additional energy storage resources to a virtual power plant
                                24   program after an affidavit has been filed, the aggregator shall
                                25   file an updated affidavit with the commission.
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                                1  D.   The commission may request additional
                                2    information related to compliance with this section from an
                                3    electric public utility or a distributed energy resource
                                4    aggregator."
                                5  SECTION 6.     A new section of Chapter 62 NMSA 1978 is
                                6    enacted to read:
                                7  "[NEW MATERIAL] COST RECOVERY FOR ELECTRIC PUBLIC
                                8    UTILITIES.--
                                9  A.   An electric public utility may recover
                                10   reasonable costs resulting from the implementation of a virtual
                                11   power plant program through cost recovery mechanisms approved
                                12   by the commission.
                                13  B.   Recoverable costs include:
                                14  (1)   foundational, operating and information
                                15   technology costs or investments; and
                                16  (2)   operating technology costs or
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                                17   investments."
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