Investor-owned utility (IOU) Public Service Company of New Mexico (PNM) is seeking regulatory approval of two Energy Storage Agreements (ESA) and a Certificate of Convenience and Necessity (CCN) covering 350MW of energy storage capacity across three projects.
The projects were selected by PNM after a “robust and competitive” RFP process issued by the IOU to meet summer 2028 retail customer needs in the most cost-effective and reliable way. PNM lodged a filing with the New Mexico Public Regulation Commission (NMPRC) containing details of the agreements on 22 November 2024.
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PNM is requesting that the agreements be approved by 1 September 2025 in order for the projects to be in place for the 2026 summer season.
Aypa Power: Sun Lasso Energy Center
The first ESA entitles PNM to energy storage capacity from Aypa Power’s 150MW/600MWh Sun Lasso Energy Center battery energy storage system (BESS) project, known previously as Central Energy Storage, located in Albuquerque, Bernalillo County.
Regular readers of Energy-Storage.news will remember the project being featured last month, after the Blackstone-portfolio company secured US$190 million in industrial revenue bonds (IRBs) from the Bernalillo County Board of County Commissioners to aid project development.
Under the terms of the contract, Aypa Power will provide capacity to PNM on an availability rate of US$14.55/MWh for a 20-year term commencing on 15 January 2028. The agreement also entitles PNM to ancillary services from the project including frequency response, load following, contingency reserve and spinning reserve.
The project, expected to comprise 172 individual BESS units, will connect to the Public Service Company of New Mexico-owned grid via the utility’s yet-to-be-built Sunset Gardens 115kV switching station. Aypa Power is seeking an interconnection agreement with PNM that it expects to secure during the first quarter of 2025 (queue number IA-PNM-2021-04).
According to the agreement, Aypa Power hopes to close financing and commence construction on the project during the first quarter of 2027.
Plus Power: Corazon
As announced this week by developer Plus Power, the second ESA relates to the company’s 150MW/600MWh Corazon BESS also located in Albuquerque.
The tolling agreement entitles PNM to the same attributes as the Sun Lasso ESA, but for a slightly higher price based on a US$15.4/MWh availability rate over the same 20-year term. The project has a contracted commercial operation date (COD) of 31 December 2027.
Plus Power anticipates commencing construction and securing financing for the project during August 2026. Construction will begin that year for the start of commercial operations before the end of 2027.
Interconnection to the PNM-controlled grid will be via the utility’s Pajarito 345kV substation.
For Plus Power, the project marks entry into a sixth US state. It currently has seven projects in operation in Arizona, Texas and Hawaii, with two under construction in Maine and Massachusetts.
Utility-owned solar and storage development
PNM is also seeking regulatory approval of a CCN to develop a 100MW solar project paired with a 30MW/120MWh BESS, dubbed the Sunbelt project, located within the Central Consolidated School District in New Mexico’s San Juan County.
Although Sunbelt will be owned by PNM, the utility has executed an engineering, procurement, and construction (EPC) agreement with contractor Gridworks to build the project at a cost of US$220.4 million.
Within its recent filing, PNM included an option to increase the size of the BESS to 50MW/200MWh, bumping the total project cost up to US$252 million. However, the utility hopes to recoup some of this cost through investment tax credits (ITCs) associated with the BESS, estimated by PNM to be around US$23.3 million for the 30MW option.
Since the US election, there has been some uncertainty on the future of the Inflation Reduction Act (IRA) and the benefits it provides such as ITCs for renewable energy developments. However, as recently reported by Energy-Storage.news, a repeal of the IRA remains unlikely, according to industry analysts and participants.
The Sunbelt project is expected to reach commercial operations during May 2028.
Public Service of New Mexico targets 100% carbon-free power by 2040
PNM is New Mexico’s largest electricity provider, serving over 550,000 customers, who has been taking steps to reduce its reliance on fossil fuels over the past few years. As reported by Energy-Storage.news in June this year, the NMPRC approved PNM’s plan to add 310MW of battery storage to its portfolio for summer 2026.
Set forth in the New Mexico Energy Transition Act (ETA) of 2019, IOUs within the state are required to have a renewable energy standard of 50% by 2030, 80% by 2040 and 100% by 2045.
TXNM Energy, the holding parent company for PNM and Texas utility Texas-New Mexico Power (TNMP), has pledged to achieve 100% carbon-free power generation by 2040 across both of its subsidiaries.
