New Mexico Commission Approves SPS Transmission Upgrades, Resource Expansion
The New Mexico Public Regulation Commission has approved a major infrastructure and generation expansion plan for Southwestern Public Service Company that includes significant transmission upgrades and nearly 3,850 MW of new generation and storage resources to support rapidly growing electricity demand in eastern New Mexico.
As part of the plan, the Commission approved approximately $461 million in transmission upgrades for three key New Mexico transmission lines. The projects are intended to strengthen regional grid reliability, expand power delivery capabilities and support the integration of new energy resources across the system.
The approved resource portfolio includes a mix of wind, solar, natural gas and battery energy storage projects designed to maintain reliability while supporting long-term load growth and economic development in the region.
Under the plan, SPS will develop the Lariat and Yellow House wind farms, the Sandy Loam solar project, and the Gaines and Tolk natural gas plants. Regulators said the diversified resource mix is intended to ensure sufficient capacity during periods of peak demand and maintain system reliability as electricity use continues to grow.
To improve grid flexibility and support renewable integration, the Commission also approved large-scale battery energy storage facilities at Sagamore and Plant X. The storage systems are expected to provide backup capacity during periods of lower wind and solar generation and help stabilize grid operations.
The Commission also established a timeline for the retirement of Units 1 and 2 at the Tolk Generating Station, setting a retirement date of March 31, 2029. Regulators said the schedule is intended to avoid reliability gaps while the new generation and transmission infrastructure is completed and brought online.
As part of the proceeding, the Commission rejected a proposal to classify natural gas resources as “zero-carbon,” while reaffirming New Mexico’s commitment to its 2045 clean energy goals.
The overall expansion plan represents an estimated $9.3 billion investment. Costs will be phased into customer rates over time as projects enter service. The Commission also directed SPS to provide ongoing demand forecasts and reporting related to anticipated tax credits tied to the new facilities to ensure infrastructure investments remain aligned with actual system growth.
Additional information is available through the PRC eDocket System under Docket No. 25-00066-UT.