New Mexico Electricity Rates: What to Know

New Mexico electricity is still cheaper than most of the country, but the days of rock-bottom rates are fading fast. As of April 2026, the average New Mexico residential customer pays between 15 and 16 cents per kilowatt-hour, producing a typical monthly bill in the $95-$110 range. That is roughly 10-15% below the national average, a cushion that has existed for most of the last decade thanks to abundant in-state coal, natural gas, and a growing fleet of utility-scale solar and wind.

That cushion is getting thinner. Public Service Company of New Mexico (PNM), the state's largest utility, just implemented the second phase of a rate case on April 1, 2026 that adds about $7 per month to the average residential bill on top of the $3 bump from July 2025. El Paso Electric and Xcel/Southwestern Public Service both have big rate cases pending, and a $11.5 billion Blackstone buyout of PNM's parent company is awaiting regulatory approval. Layered on top of all of that is the 2019 Energy Transition Act, one of the earliest 100% clean electricity laws in the country, which is reshaping where New Mexico's power comes from. Understanding these forces — and what you can do about them — is the key to managing your electricity costs in the Land of Enchantment.

How New Mexico's Electricity Market Works

New Mexico is a regulated electricity market. Unlike deregulated states where residential customers can shop between competing energy suppliers, New Mexicans are served by whichever utility holds the franchise for their geographic area. You do not get to choose.

The New Mexico Public Regulation Commission (NMPRC) oversees the state's investor-owned electric, gas, and water utilities. It sets rates, approves rate increase requests, reviews mergers and acquisitions, and establishes the operational rules these utilities must follow. The NMPRC's job is to balance utility financial health with consumer protection and reliable service.

One of the most important structural changes in New Mexico regulatory history happened in November 2020: voters approved Constitutional Amendment 1, transforming the PRC from a five-member elected body into a three-member body appointed by the governor. The change took effect January 1, 2023. Commissioners now serve six-year staggered terms, only two can come from the same political party, and no more than two consecutive terms are allowed. Supporters argued appointment would depoliticize the commission and bring more technical expertise; critics worried it would hand too much power to the governor. You will see this shift referenced throughout any recent coverage of New Mexico utility decisions.

The NMPRC does not regulate rural electric cooperatives and municipal utilities in the same way it regulates investor-owned utilities. Cooperatives are member-owned and governed by elected boards. Municipal utilities like the Farmington Electric Utility System answer to city councils. This matters because roughly a third of New Mexicans get their power from a co-op or muni, and those customers have a fundamentally different relationship with their utility than PNM or El Paso Electric customers.

Here's a quick breakdown of New Mexico's utility types:

Utility Type	Regulation	Examples
Investor-Owned Utilities (IOUs)	NMPRC-regulated	PNM, El Paso Electric, Xcel/SPS
Rural Electric Cooperatives	Member-owned, self-governed	Kit Carson, Central NM, Sierra Electric
Municipal Utilities	City-governed	Farmington Electric, Los Alamos County

The bottom line for most New Mexico residents: your main levers for controlling costs are not choosing your provider. They are managing your usage, picking the right rate plan, tapping state tax credits, and — if the math works for your property — generating your own power.

What New Mexicans Actually Pay

Let's put real numbers on the table. The average residential electricity rate in New Mexico as of early 2026 ranges from about 15.3 to 16 cents per kWh depending on the data source. The Electric Choice April 2026 tracker puts New Mexico at 16 cents per kWh. EnergySage reported 15.4 cents per kWh in March 2026. PriceOfElectricity.com listed 15.29 cents per kWh in February 2026. All three are below the national average of roughly 17.5-18 cents per kWh.

The average monthly residential bill in New Mexico runs between $95 and $110. That is significantly below the national average of $147-156 per month — a difference driven by two factors: below-average rates AND below-average usage. New Mexico households tend to use less electricity than the US average, partly because of the state's dry desert climate (which allows efficient evaporative cooling in many areas) and partly because homes are generally smaller than the national mean. Winter heating loads are modest across much of the state, and many homes use natural gas or propane for heating rather than electric resistance or heat pumps.

The trend is what matters most. For years, New Mexico rates were relatively stable. That is no longer true. Here is how the major utility rate cases stack up:

Utility	Recent Action	Residential Impact
PNM	July 2025 + April 2026 rate case	~$6.23/month total increase
El Paso Electric	Filed March 2026	Proposed $1/day ($30/month) in two phases
Xcel/SPS	Filed November 2025	Requesting 16.7% increase (~$175M base revenue)
Kit Carson Coop	100% daytime solar achieved 2022	Wholesale cost dropped 9.5 to 4.5 cents/kWh

PNM's 2025-2026 rate case is the most directly relevant to the largest share of New Mexicans. The utility originally asked the NMPRC for $174.3 million in increased revenue. A unanimous settlement agreement with multiple parties reduced that to $105 million in actual recovery — about 60% of the original ask. The settlement also included a $1.5 million shareholder contribution to PNM's Good Neighbor Fund, which helps low-income customers avoid disconnection.

If your bill has been climbing and you are not sure where the money is going, our guide on how to read your electric bill and spot overcharges walks through every line item.

New Mexico's Major Utilities

Public Service Company of New Mexico (PNM)

PNM is the largest utility in the state, serving roughly 540,000 customers across central New Mexico — including Albuquerque, Santa Fe, Rio Rancho, and the surrounding communities. It is an investor-owned utility, a subsidiary of TXNM Energy (the parent company changed its name from PNM Resources in 2024 to reflect its combined New Mexico and Texas operations).

PNM just implemented the second phase of its 2025-2026 rate case on April 1, 2026. The combined impact of both phases adds about $6.23 per month to the average residential bill. Why the increase? PNM cites a combination of factors: recovering investments in coal plant replacement generation, transmission and distribution upgrades, vegetation management, technology modernization, and growing grid integration costs for new renewable projects. Underneath the specifics, the bigger story is the ongoing cost of transitioning away from coal toward wind, solar, and battery storage — a topic we will dig into shortly.

PNM is also at the center of a major corporate story. In 2021, Spanish energy giant Iberdrola's subsidiary Avangrid tried to acquire PNM Resources for about $8.3 billion. In December 2021 the NMPRC unanimously rejected the merger, citing concerns about reliability risks, potential rate increases, slower renewable development, and ongoing criminal investigations of Iberdrola executives in Spain. After a failed appeal to the New Mexico Supreme Court, Avangrid formally terminated the deal in January 2024.

That was not the end of PNM's ownership saga. In May 2025, TXNM Energy announced it had agreed to be acquired by Blackstone Infrastructure in an $11.5 billion take-private deal. Blackstone proposed a $175 million benefits package for New Mexico customers and communities, including a $105 million rate credit that Blackstone calls the largest acquisition rate credit in state history. For the average residential customer, the credit would knock about 3.5% off bills — roughly $168 in savings per customer. Blackstone also committed to hold TXNM for at least 10 years, keep PNM headquartered in New Mexico, and honor current union commitments.

The NMPRC application was filed on August 25, 2025, with closing expected in the second half of 2026. Consumer advocates have raised concerns about private equity ownership of critical infrastructure — whether long-term cost control will survive, whether net metering policies might tighten, and whether service quality could suffer. The regulatory review is ongoing as of April 2026.

El Paso Electric (EPE)

El Paso Electric serves southern New Mexico — primarily Las Cruces, Dona Ana County, Otero County, and the communities near the Texas border — plus the El Paso, Texas metropolitan area across the state line. Total customers are around 460,000, split between New Mexico and west Texas. EPE is an investor-owned utility that went private in 2020 when it was acquired by IIF US Holding 2, a J.P. Morgan Investment Management infrastructure fund.

El Paso Electric filed a major rate case with the NMPRC in March 2026 seeking to recover approximately $400 million. The proposed increase would be implemented in two phases and add roughly $1 per day — about $30 per month — to the average residential bill when fully implemented. EPE cites infrastructure investments, reliability upgrades, and fuel cost increases as the drivers. The NMPRC is expected to rule on the case by the end of 2026, and administrative law judges have already signaled they may recommend a smaller increase than the company requested.

Xcel Energy / Southwestern Public Service (SPS)

Xcel Energy's subsidiary Southwestern Public Service serves eastern New Mexico communities including Clovis, Portales, Hobbs, Lovington, and Roswell. It operates primarily in the New Mexico-Texas Panhandle region, with a larger customer base in Texas than New Mexico.

In November 2025, SPS filed a rate case with the NMPRC seeking a $175 million base rate revenue increase — a 16.7% jump. The proposal uses a future test year ending November 30, 2027 and includes a 10.5% return on equity and a $3.9 billion retail rate base. A decision is expected in the fourth quarter of 2026. SPS says the increase is necessary to support the clean energy transition and accommodate large load growth in its service territory.

Rural Electric Cooperatives (The Kit Carson Story)

New Mexico has roughly 15 rural electric cooperatives. These member-owned utilities generally serve smaller, more dispersed populations than the IOUs, and they operate differently: members elect the board, excess revenue is returned as capital credits, and decisions are made closer to the communities served.

The standout story is Kit Carson Electric Cooperative, which serves about 30,000 members in Taos, Colfax, and Rio Arriba counties. In December 2016, Kit Carson's board voted unanimously to pursue 100% daytime solar power by 2022 — and they actually achieved it. With the opening of the Taos Mesa Solar Array in summer 2022 (170 acres, 43,680 panels), Kit Carson hit its goal. The cooperative now has roughly 41 MW of distributed solar plus 15 MW of battery storage across its territory.

The financial results are extraordinary. Kit Carson's wholesale energy supply cost dropped from 9.5 cents per kWh to 4.5 cents per kWh after the transition — a 53% reduction. That translates to approximately $10 million in annual savings passed through to members. In January 2025, Kit Carson was awarded $231 million in federal funding to build another 104 MW of green hydrogen-powered generation, solar, and battery storage.

For New Mexicans lucky enough to live in Kit Carson's service territory, the coop is a living demonstration that aggressive clean energy can lower costs rather than raise them when you own your own generation instead of buying wholesale power from fossil-heavy suppliers. It is one of the most compelling rural clean energy transformations in the United States.

The Energy Transition Act: 100% Carbon-Free by 2045

If one policy matters most to the future of New Mexico electricity rates, it is the Energy Transition Act (ETA) signed into law by Governor Michelle Lujan Grisham on March 22, 2019. At the time, New Mexico was among just three US states to commit to 100% carbon-free electricity — years ahead of most others.

The ETA sets a stair-stepped renewable energy standard for New Mexico's investor-owned utilities:

Year	Requirement (IOUs)
2025	40% renewable
2030	50% renewable
2040	80% renewable
2045	100% zero-carbon

Rural electric cooperatives have their own timeline, reaching 100% zero-carbon by 2050 — five years after the IOUs.

Notice the careful wording: "100% zero-carbon" is broader than "100% renewable." It could include nuclear, carbon capture, and other non-fossil sources, not just wind and solar. In practice, the dominant replacement technologies so far have been utility-scale solar, wind, and battery storage, but the law leaves room for other options.

The Just Transition Provision

One of the most distinctive features of the ETA is its worker and community support package. The law authorized $375 million in transition bonds to help communities and workers affected by coal plant closures. It also established a separate $40 million transition fund for direct assistance to impacted communities. Workforce training, economic development for the Farmington area, and educational support for displaced coal workers were all built into the law.

Climate policy advocates frequently cite the ETA as a model for other states because it pairs aggressive emissions targets with meaningful help for the workers left behind. Unlike some states that have closed coal plants without a plan for displaced workers, New Mexico at least tried to build a bridge.

Implementation Progress

Progress toward the ETA targets is real but uneven. PNM's closure of San Juan Generating Station in 2022 was the single biggest emissions milestone. Utility-scale solar and wind procurement has accelerated. But challenges persist: transmission bottlenecks delay new renewable projects, rising materials costs have pushed up the price of new construction, and the Four Corners Generating Station retirement has been pushed back from 2031 to "no later than" 2038 due to regional reliability concerns. PNM says it remains on track for ETA compliance; outside analysts are more cautious.

Why New Mexico Rates Are Changing

New Mexico has historically enjoyed some of the lowest electricity rates in the country. Rates are climbing from that low base, and several forces are at work.

San Juan Generating Station Closure

The San Juan Generating Station was PNM's flagship coal plant for nearly 50 years. Located in Waterflow, New Mexico near Farmington, it had a peak capacity of 1,848 MW across four units. Unit 1 came online in 1973. Units 2 and 3 shut down at the end of 2017. Unit 1 closed in June 2022, and Unit 4 — the last to operate — closed in September 2022.

The closure eliminated roughly 5 million tons of CO2 emissions annually, a major milestone for the state. But it also cost the Farmington area dearly: approximately 200 mine workers, 220 plant workers, and an estimated 1,500 indirect jobs (suppliers, vendors, contractors) vanished. The average worker was 46 years old and earned about $86,000 — hard to replace in a rural area with limited comparable employment.

PNM's replacement power strategy leans heavily on the San Juan Solar project (200 MW of photovoltaic solar plus 100 MW of battery storage) and other renewable purchases. But there is a catch: under a legal mechanism called securitization, PNM customers continue paying for the closed plant through ratepayer-backed bonds. Those costs flow into rates even though the plant no longer generates electricity. This "paying for a closed plant" dynamic is a persistent source of consumer frustration in New Mexico.

Four Corners Generating Station Delay

The Four Corners Generating Station sits on Navajo Nation land about 20 miles southwest of Farmington. With 1,540 MW of remaining capacity across two operating units, it is New Mexico's last large coal plant. Arizona Public Service (APS) operates the plant on behalf of co-owners that include PNM, Salt River Project, Navajo Transitional Energy Company, and Tucson Electric Power.

Four Corners was originally scheduled to retire in 2031. In August 2025, APS announced the retirement would be pushed back to "no later than" 2038 due to regional reliability concerns and surging electricity demand in the Southwest. The delay is controversial. Tribal communities, environmental groups, and clean energy advocates have argued against extending the plant's life, citing air quality, water consumption, and the cumulative impact on the region. But growing data center demand and reliability worries have given the plant operators political cover to keep it running longer.

Transmission and Data Center Load Growth

New Mexico's electricity demand is growing, driven significantly by data centers. Meta (Facebook) operates a massive data center campus in Los Lunas, about 30 miles south of Albuquerque. The campus now includes seven operational buildings with three more under construction and total investment exceeding $2.5 billion. It draws power from a portfolio of renewable projects spanning six New Mexico counties totaling 885 MW of contracted solar and wind plus 100 MW of battery storage — all interconnected through PNM's transmission network.

Data centers bring capital investment and clean energy contracts, but they also require significant transmission upgrades and can stress grid operations. In 2019, the NMPRC ruled that Facebook could not pass the full cost of a $39 million dedicated transmission line to PNM ratepayers, ordering Meta to absorb a proportionate share. These kinds of cost-allocation fights are a recurring theme as load grows.

Clean Energy Investment

Meeting the ETA's 2045 target requires enormous capital investment. New wind farms, utility-scale solar, battery storage, and the transmission lines to connect them all flow into the rate base that customers pay for. PNM's 2025-2026 rate case lists renewable integration and replacement generation as key cost drivers. SPS's November 2025 filing explicitly cites clean energy transition investments as a primary reason for its proposed 16.7% increase.

The tension between climate ambition and near-term affordability is real. In theory, wind and solar are now cheaper than new coal or gas on a levelized-cost basis. In practice, the transition still requires building a lot of new infrastructure on top of the existing fossil fleet, and paying off stranded assets from early coal retirements.

Understanding New Mexico's Rate Structures

New Mexico uses several rate structures that directly affect what you pay. Understanding how they work gives you opportunities to save.

Tiered and Seasonal Rates

PNM's standard residential rate (Schedule 1A) includes seasonal differentiation — higher rates in summer (June through September) when cooling load peaks, and lower rates in winter. Some rate schedules also include tiered pricing, where usage above a certain baseline is charged at a higher per-kWh rate. These structures reward conservation: the more you can stay within baseline usage, the lower your average rate.

El Paso Electric also uses seasonal rates, with summer pricing (May through October) higher than winter. Xcel/SPS does the same. Given that New Mexico's hottest months drive the biggest AC bills, the summer season is when small efficiency improvements pay off the most.

Time-of-Use Options

PNM's Time-of-Use Pilot (Schedule 1B) is available to up to 7,500 residential customers on a first-come, first-served basis. Under this plan:

• On-Peak: 8:00 AM to 8:00 PM, Monday through Friday (60 hours per week)
• Off-Peak: All other hours — weekends, overnight, early morning (108 hours per week)

The pricing differential between on-peak and off-peak is significant. If you can shift heavy loads — laundry, dishwasher, EV charging, water heating — to off-peak hours, you can materially lower your monthly bill. Electric vehicle owners especially benefit because overnight charging falls entirely within the off-peak window.

El Paso Electric and SPS offer their own TOU options, though availability and enrollment rules vary. Check directly with your utility to see what is available in your specific territory.

What's on Your Bill

A typical New Mexico electricity bill includes several components beyond the energy charge:

• Energy charge (tiered/seasonal) — the largest component, varies by usage and time of year
• Service/customer charge — fixed monthly connection fee, typically $7-10
• Fuel and purchased power cost adjustment (FPPCA) — passes through fuel cost changes
• Renewable energy rider — funds renewable procurement
• Transmission and distribution charges
• Franchise fees — varies by city
• Gross receipts tax — New Mexico's state sales tax applied to electricity

The gross receipts tax is worth flagging: unlike most states that exempt residential utilities from sales tax, New Mexico taxes electricity through its gross receipts structure. That adds around 5-8% to your bill depending on your local tax rate.

Solar Energy in New Mexico

New Mexico has one of the best solar resources in the United States — and yet it punches below its weight on installed capacity. That gap is an opportunity for homeowners.

An Exceptional Solar Resource

New Mexico is the second sunniest state in the country, trailing only Arizona. Most of the state gets more than 300 sunny days per year. Albuquerque averages 6.4 to 8.8 peak sun hours daily depending on panel angle — among the highest figures in the country. Santa Fe, Las Cruces, and Farmington are comparable.

Sandia National Laboratories, headquartered in Albuquerque, operates the National Solar Thermal Testing Facility — the premier US research facility for concentrated solar power. Albuquerque consistently ranks among the top 5 US cities for installed solar PV per capita (Environment America ranked it #3 in a recent Shining Cities report).

And yet New Mexico ranks only around 16th nationally for total installed solar capacity. Cloudier states like Massachusetts, New Jersey, and North Carolina have deployed more solar. The gap reflects a combination of historically low electricity rates (reducing the economic urgency), smaller population, less aggressive municipal mandates, and policy inertia. But from a physics standpoint, New Mexico has vast untapped potential.

Net Metering

New Mexico state policy requires investor-owned utilities to offer net metering for customers with rooftop solar and other qualifying renewable systems. Under PNM's Customer Solar Program for systems up to 10 kW AC (the Small PV Program), excess generation is credited on your next bill as a Cumulative Renewable Energy Credit measured in kWh. These credits never expire and can build up during high-production months (spring and fall) to offset summer AC loads.

The credit value is the retail rate for small systems, which is favorable compared to states that have moved to reduced "net billing" or "avoided cost" pricing. Larger commercial systems follow a separate structure. El Paso Electric and Xcel/SPS also offer net metering in New Mexico.

A few things to watch:

• REC incentive program discontinued: The NMPRC ended the separate Renewable Energy Credit payment program on December 31, 2022. This reduces total solar compensation compared to the past.
• Advanced inverter requirements: As of March 2024, all new interconnections must use IEEE 1547-2018 compliant advanced inverters.
• Blackstone uncertainty: Consumer advocates have raised concerns that PNM's potential private equity owner might push for "net billing" changes that reduce compensation for rooftop solar. This has not happened, but worth monitoring.

New Mexico Solar Market Development Tax Credit

New Mexico offers a 10% state income tax credit on the cost of residential solar systems, capped at $6,000. Critically, the credit is refundable: if your credit exceeds your state tax liability, the excess is refunded to you by the NM Taxation and Revenue Department. Many state credits are non-refundable (you lose the unused portion), so the refundability of the NM credit is a meaningful advantage.

To claim it, you must apply to the Energy, Minerals and Natural Resources Department (EMNRD) within one calendar year of installation. Processing takes about 3-4 weeks. If your system is installed in 2026, your application deadline is December 31, 2027.

There has been legislation in the New Mexico Legislature to increase the credit from 10% to 30% — a move that would dramatically improve solar economics. Watch for updates in future legislative sessions.

Sustainable Building Tax Credit

New Mexico's Sustainable Building Tax Credit (SBTC) rewards energy-efficient new construction, renovation, and certain product installations in existing homes. Credits range from $0.30 to $6.25 per square foot for new/renovated buildings achieving third-party green certification (LEED, Build Green NM, Passive House, etc.). There is also a separate credit for installing specific energy-efficient products in existing homes.

Important caveat: the program currently has a sunset date of December 31, 2026, so 2026 projects are eligible but future renewals are uncertain. If you are planning a major renovation or new build, this year is an opportune time to claim the credit before it expires (or hopefully gets renewed).

What Solar Costs in New Mexico

Solar installation costs in New Mexico run roughly $2.50 to $3.00 per watt before incentives. A typical 7-10 kW residential system costs between $17,500 and $30,000 gross. The federal Investment Tax Credit expired for residential systems at the end of 2025, making the state 10% credit more important than ever.

Payback periods range from 7 to 11 years, depending on your usage patterns, utility, specific system size, and financing. For high-usage households with big summer AC bills, payback can be shorter. For a deeper dive into panel selection and installation, check out our guide on choosing the best solar panels for your home.

If rooftop solar is not feasible for your home — whether because of roof condition, shade, renting, or HOA restrictions — community solar subscriptions are an alternative. Our guide on community solar explains how it works.

Strategies to Lower Your New Mexico Electricity Bill

New Mexico has a unique climate profile: hot, dry summers with intense solar gain, mild winters in most populated areas, and significant day-night temperature swings. The highest-impact cost-saving strategies reflect that climate.

1. Attack Summer Cooling First

Cooling is the largest single driver of summer bills in New Mexico. A few moves that matter:

• Evaporative (swamp) coolers work beautifully in New Mexico's dry climate and use roughly 75% less energy than refrigerated air conditioning for most of the cooling season. Many New Mexico homes use evaporative cooling for the dry months (May-June) and switch to AC only during monsoon season (July-September).
• Smart thermostats optimize runtime, pre-cool during off-peak hours, and learn your schedule. Our guide to the best smart thermostats for energy savings covers the top options.
• Window coverings and shade trees reduce solar gain, which matters enormously in a state with 6-8 peak sun hours daily.
• Roof color and insulation — a reflective roof and proper attic insulation can cut summer AC demand by 20-30%.

2. Switch to Time-of-Use If You Can

If you are a PNM customer with flexible usage habits, the Time-of-Use Pilot (Schedule 1B) is worth exploring. Shifting laundry, dishwasher, EV charging, and pool pump operation to off-peak hours (after 8 PM weekdays, all weekend) can lower your effective rate significantly. Enrollment is capped at 7,500 customers, so apply sooner rather than later if interested.

3. Go Solar

New Mexico's combination of 6-8 peak sun hours, net metering, and a 10% refundable state tax credit (up to $6,000) makes solar compelling even at below-average electricity rates. As PNM, EPE, and SPS rates continue rising, your solar savings compound. Locking in your net metering agreement now protects you if future policy changes reduce credit values for new customers.

4. Consider a Heat Pump

New Mexico winters are mild enough across most of the state that air-source heat pumps are highly effective. Modern cold-climate heat pumps work efficiently down to single-digit temperatures. A heat pump can replace a natural gas furnace for heating and provide cooling for the summer — all in one system. Our guide to the best heat pumps for home walks through selection. For a comprehensive approach to electrifying your home, see our whole-home electrification guide.

5. Weatherize and Insulate

New Mexico's temperature swings — sometimes 30-40°F between day and night — make a well-insulated building envelope especially valuable. Air sealing, insulation upgrades, and thermal windows keep your conditioned air inside rather than leaking to the outdoors. Adobe and stuccoed homes have some natural thermal mass advantages, but they still benefit from modern sealing.

6. Monitor Your Usage

You cannot manage what you do not measure. A home energy monitor shows you exactly where your electricity is going. In New Mexico, that often reveals surprises: a pool pump running 24/7, an old well pump cycling inefficiently, or a detached garage refrigerator using more power than the main kitchen appliance. For the biggest impact, pair your monitor with our guide on how to cut your electric bill in half.

7. Claim Every Available Tax Credit

New Mexico's tax credits stack with federal incentives and utility rebates. The 10% solar credit, the Sustainable Building Tax Credit (expiring end of 2026), and various utility efficiency rebates can substantially offset the upfront cost of improvements.

Low-Income Assistance Programs

New Mexico has a multi-layered safety net for households struggling with electricity costs.

LIHEAP (Low Income Home Energy Assistance Program)

LIHEAP is a federal program administered in New Mexico by the New Mexico Health Care Authority (formerly the Human Services Department), Income Support Division. It provides bill payment assistance for both heating and cooling — an important feature given New Mexico's hot summers.

Key 2026 details:

• Federal funding (FY 2026): approximately $18 million
• Income eligibility: up to 150% of Federal Poverty Level
• Benefit amounts: $70 minimum, $490 maximum for heating/cooling; up to $490 for crisis assistance
• Application window: October 1 through September 30 annually
• Phone: 1-800-283-4465
• You can apply in person, by mail, or online through the NM Health Care Authority portal

Applications are processed within 45 days. Priority is given to households facing disconnection.

PNM Good Neighbor Fund

The Good Neighbor Fund is PNM's customer assistance program, funded by voluntary customer contributions matched by utility dollars. As part of the 2025 rate case settlement, PNM shareholders contributed an additional $1.5 million to the fund. Emergency assistance is available for customers at risk of disconnection. Contact PNM directly or call 211 to connect with local community action agencies that administer the funds.

El Paso Electric Programs

El Paso Electric participates in state-administered LIHEAP and offers its own payment arrangement programs. Medical emergency protections are available for customers with qualifying health conditions.

Weather-Based Disconnection Protections

New Mexico has weather-based disconnection moratoriums during cold snaps and extreme heat events. Utilities cannot disconnect service when temperatures are forecast to be dangerously cold or hot. If you are facing disconnection, contact your utility immediately — you may be entitled to payment arrangements and temporary protection.

Navajo Nation Programs

The Navajo Nation administers a separate LIHEAP allocation for tribal households. Navajo Division of Community Financial Services handles applications and eligibility determinations. This is especially important in the northwestern part of the state where utility service overlaps with tribal jurisdictions.

Frequently Asked Questions

What is the average electricity rate in New Mexico?

As of April 2026, the average residential electricity rate in New Mexico is approximately 15-16 cents per kWh, depending on the data source. That is about 10-15% below the national average of roughly 17-18 cents per kWh. PNM customers just saw the second phase of a rate case take effect on April 1, 2026, adding about $7 per month to the average bill on top of the $3 bump from July 2025.

Why is my electricity bill going up?

New Mexico rates are rising due to a combination of factors: coal plant retirement costs (especially San Juan Generating Station securitization), replacement renewable generation investments, transmission and distribution upgrades, inflation, load growth from data centers, and clean energy investments required by the 2019 Energy Transition Act. PNM's 2025-2026 rate case adds ~$6.23/month to average bills. El Paso Electric and Xcel/SPS both have significant rate cases pending with decisions expected later in 2026.

Can I choose my electricity provider in New Mexico?

No. New Mexico is a regulated electricity market. Residential customers are served by whichever utility holds the franchise for their area — PNM in central New Mexico, El Paso Electric in the south, Xcel/SPS in the east, or various rural electric cooperatives and municipal utilities elsewhere. Your options for reducing costs focus on managing usage, picking the right rate plan, and using tax credits.

What is the Energy Transition Act?

The Energy Transition Act (ETA), signed in 2019, requires New Mexico's investor-owned utilities to reach 50% renewable energy by 2030, 80% by 2040, and 100% zero-carbon by 2045. Rural electric cooperatives have a 2050 target. It is one of the earliest state laws of its kind in the US. The law also provided $375 million in transition bonds and a separate $40 million fund to support workers and communities affected by coal plant closures.

Is solar worth it in New Mexico?

Yes — emphatically so. New Mexico is the second sunniest state in the country with 300+ sunny days per year and 6-8 peak sun hours daily. New Mexico offers a 10% refundable state tax credit up to $6,000, plus net metering that credits excess generation at retail rate with credits that never expire. Payback periods typically run 7-11 years. As PNM, EPE, and SPS rates continue rising, the economics get better every year.

What happened with the Avangrid-PNM merger?

In 2021, the New Mexico Public Regulation Commission unanimously rejected Avangrid's proposed $8.3 billion acquisition of PNM, citing concerns about reliability, rate impacts, slower clean energy development, and a criminal investigation involving Iberdrola executives in Spain. After a failed appeal to the New Mexico Supreme Court, Avangrid formally terminated the merger in January 2024. PNM's parent company TXNM Energy has since entered into a new $11.5 billion acquisition agreement with Blackstone Infrastructure, pending NMPRC and Texas PUCT approval.

What is the Blackstone deal and how will it affect my rates?

Blackstone Infrastructure is acquiring TXNM Energy (PNM's parent) for $11.5 billion. The deal includes a $175 million benefits package for New Mexico customers, featuring a $105 million rate credit that would lower the average residential bill by 3.5% (about $168 per customer) — the largest acquisition rate credit in state history. Blackstone has committed to hold the utility for at least 10 years, keep PNM headquartered in New Mexico, and honor union contracts. Closing is expected in the second half of 2026. Consumer advocates have raised concerns about private equity ownership of critical infrastructure.

What happens if I cannot pay my electricity bill?

New Mexico has several safety nets. LIHEAP provides federal heating and cooling assistance for households up to 150% of Federal Poverty Level (maximum $490 benefit). PNM's Good Neighbor Fund offers emergency assistance. Weather-based disconnection protections prevent shutoffs during cold snaps and extreme heat. Call your utility immediately to set up a payment arrangement, and dial 211 to connect with local community action agencies. Do not wait until you receive a disconnection notice — the earlier you reach out, the more options are available.

What is a "cooperative" utility and how is it different?

Rural electric cooperatives are member-owned, non-profit utilities. Members elect the board, and excess revenue is returned as capital credits rather than paid out as shareholder dividends. Cooperatives like Kit Carson Electric in Taos are governed by and for the communities they serve. Kit Carson became the first US cooperative to hit 100% daytime solar in 2022 and cut wholesale power costs in half — from 9.5 to 4.5 cents per kWh — saving members about $10 million per year. If you live in a coop territory, your utility experience is fundamentally different from PNM or EPE.

Your New Mexico Electricity Action Plan

Here is a concrete plan to take control of your electricity costs:

This week:

1. Pull up your most recent utility bill and identify your rate schedule, monthly kWh usage, and all line items. If anything looks unfamiliar, our bill reading guide will decode it.
2. Log into your utility's website (pnm.com, epelectric.com, or xcelenergy.com) and review your usage history for the past 12 months. Note your summer peaks and winter lows.
3. If you are a PNM customer, check whether you are eligible for the Time-of-Use Pilot (Schedule 1B). With 7,500 enrollment slots total, space is limited.

This month:

4. Walk through your home and identify the biggest cooling losses — poorly insulated attic, air leaks around windows and doors, shade opportunities. Summer AC is the largest bill driver in most NM homes.
5. If you are considering solar, get quotes from at least three reputable local installers. New Mexico has a strong installer ecosystem, especially in Albuquerque and Santa Fe. Take advantage of the 10% state tax credit while the 10% rate is still in force (legislation has been proposed to expand it to 30%).
6. Check eligibility for the Sustainable Building Tax Credit before it sunsets on December 31, 2026 — especially if you are planning a renovation or major appliance upgrade.

If you are struggling to pay your bill:

7. Call your utility directly to request a payment arrangement. Do not let an unpaid bill snowball.
8. Apply for LIHEAP through the NM Health Care Authority at 1-800-283-4465 or online. Benefits are available for both heating and cooling.
9. Ask your utility about weather-based disconnection protections and emergency assistance funds like PNM's Good Neighbor Fund.

For the long term:

10. Plan for continued rate increases. The Energy Transition Act's 2045 target requires significant ongoing investment, and PNM, EPE, and SPS all have rate cases either pending or recently approved. Every efficiency improvement you make today compounds in value as rates climb.
11. Consider a home energy monitor to track where your electricity is going and identify waste.
12. If you are planning a major home renovation or equipment replacement, use it as an opportunity to electrify and weatherize. Stacking state tax credits, utility rebates, and any remaining federal incentives can dramatically reduce out-of-pocket costs.

New Mexico's electricity landscape is in the middle of a major transition. Coal plants are closing. Clean energy is scaling up. Corporate ownership is shifting. Rates are climbing from historic lows but remain below the national average — for now. The New Mexicans who pay the least over the next decade are the ones who understand the rules of the game, take advantage of the state's strong solar resource and tax credits, and use the tools available to them before those tools get scaled back. Start this week.