New Incentives for CHP in New Mexico

The New Mexico Public Regulation Commission has approved a new energy efficiency plan for Southwestern Public Service Company (SPS), a subsidiary of Xcel Energy that serves approximately 115,000 customers in southeastern New Mexico. The new plan includes combined heat and power (CHP) and waste-heat-to-power projects as eligible custom efficiency measures, thus making those projects able to qualify for incentives. Incentives will be up to $400/kW.

Each CHP or waste-heat to-power system will have to apply for pre-approval from SPS and will have to be able to show that the project’s benefits outweigh its costs, similar to the process for all other custom efficiency measures. Eligible projects can then earn “up to $400 per kilowatt” depending on the total energy savings of the project.

SPS’s policy change is an example of how utilities and state regulators are increasingly recognizing CHP and waste heat recovery as cost-effective options for utilities to meet their efficiency goals.

 

 

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