New Mexico utility seeks approval of hybrid BESS offtake contracts to power Meta data centres

Of Meta’s 28 publicly announced US data centres, Los Lunas is one of its largest, with total investments expected to exceed US$2.5 billion. Construction of the site commenced in 2016, now comprising seven operational data centre buildings, with three more under construction and more on the horizon.

As covered by Energy-Storage.news, PNM already has renewable offtake agreements in place with various developers aimed at supporting initial phases of Meta’s Los Lunas data center campus.

One of the projects in question, Sky Ranch Solar, comprises a 190MW solar array paired with a 50MW/200MWh BESS and was brought online last spring by independent power producer (IPP) NextEra Energy Resources (NEER).

PNM has also negotiated offtake to support Meta’s Los Lunas campus from two other hybrid BESS projects, dubbed Route 66 and TAG solar centres, owned by NEER and Exus Renewables, respectively.

Instead of utilising behind-the-meter solar and storage, PNM has procured these renewable resources from third-party developers on behalf of Meta to support its data centre campus.

PNM then recovers the costs associated with these renewable energy contracts from Meta through a separate specialist contract.

Although Meta paused the buildout of its data centres in 2022, the company is once again focusing on expansion after reconsidering their designs with AI’s intensive energy usage in mind.

For its Los Lunas site, Meta recently received additional taxable industrial revenue bonds (IRBs) from the Village of Los Lunas. These bonds will be used to construct two additional buildings on the campus, up from the 10 already operational and under construction.

Similarly to the previous agreements, PNM is procuring energy from three new solar and storage projects to support this expansion, which Meta will ultimately fund through a separate arrangement with the utility.

The details of the three projects PNM is seeking approval to procure energy from can be found below:

Name	Developer	Location	BESS Capacity	Solar Generation
Star Light Energy Center	NEER	Valencia County	100MW/400MWh	100MW
Four Mile Mesa Solar	DESRI	San Juan County	100MW/400MWh	100MW
Windy Lane Energy Center	NEER	De Baca County	68MW/272MWh	90MW

Although each project co-locates a BESS with solar, PNM has negotiated power purchase agreements (PPAs) for offtake of the solar, along with separate energy storage agreements (ESAs) for the BESS. All six agreements are 20 years in length.

Both NEER projects are expected to commence delivery 1 December 2026, with DESRI’s Four Mile project slated for commercial operations on 31 December 2027.

PNM is seeking approval of the new agreements before 31 December 2025.

NMPRC mandates much more contractual transparency than many other US state energy regulators, meaning the majority of utility offtake agreements it receives can be viewed almost entirely unredacted.

In this instance, the prices PNM will pay for solar and storage across the six contracts are publicly available.

Interestingly, DESRI is set to receive around 10% more for storage from its Four Mile project, compared to what NEER will receive for its Star Light and Windy Lane projects. Specifically, DESRI will receive US$21.25/MWh for storage, whereas NEER will receive US$19.32/MWh and US$19.91/MWh for storage from its Star Light and Windy Lane projects, respectively.

However, with contractual negotiations taking many variables into consideration, final capacity pricing is often a reflection of the whole project package.

In terms of solar pricing, NEER will receive US$35.87/MWh for Star Light and US$37.52/MWh Windy Lane. Exceeding both of these, DESRI will receive US$39.79/MWh for solar energy from its Four Mile project.

PNM is also seeking permission from the NMPRC to amend its existing contract with Meta to include these six new agreements. As Meta is paying for the costs associated with these agreements, the bills of PNM’s other retail customers won’t be impacted.

As reported yesterday by Energy-Storage.news, PNM has just received NMPRC approval for planned investments in two standalone BESS facilities, one solar-plus-storage plant and an extension to a natural gas PPA.

In that filing, presented to the regulator in March, the New Mexico utility sought approval for 450MW of solar PV and storage, comprising two 150MW standalone battery storage projects, a solar-plus-storage plant combining 100MW of solar PV and a 50MW BESS, and the 167MW natural gas PPA.

In May of this year, PNM’s parent company, TXNM, entered into an agreement to be acquired for US$11.5 billion by Blackstone Infrastructure.

Alongside PNM, TXNM also owns another regulated utility, Texas New Mexico Power (TNMP), which serves around a quarter of a million residential and commercial customers in the Lone Star State.

Subject to the NMPRC, the acquisition is expected to close during the second half of next year.