How a law to allow microgrids made way for a massive data center in New Mexico
A last-minute amendment to New Mexico’s grid modernization law helped enable Project Jupiter, a massive AI data center campus planned near Santa Teresa. Critics say the measure bypassed normal public oversight and could allow a microgrid powered by natural gas to produce millions of tons of annual emissions. The project’s developers are seeking an air quality permit, while environmental advocates are challenging the application.
A 2025 amendment to New Mexico’s grid modernization legislation created a pathway for privately operated microgrids that are largely exempt from state regulation when they do not sell power to public utilities. The measure later became linked to Project Jupiter, a 1,400-acre AI data center campus near Santa Teresa being developed with Borderplex Digital Assets, Oracle Cloud Infrastructure and Yucca Growth Infrastructure.
Project Jupiter’s separate microgrid would generate roughly as much electricity as the state’s largest public utility, using fuel cells powered by natural gas. After the New Mexico Environment Department questioned emissions estimates, the developers reduced projected annual emissions from 8.8 million tons to 5.7 million tons. New Energy Economy filed a motion to dismiss the air quality permit application, arguing that the project would impose significant pollution on the already vulnerable Paso del Norte region.
Legislators and environmental advocates disagree over whether the amendment was a legitimate effort to modernize the grid or an end run around public regulation. Rep. Kristina Ortez said she did not understand that the legislation could facilitate a data center, while Sen. Michael Padilla and Rep. Nathan Small defended the measure. A later proposal to increase state oversight of microgrids passed the Senate but did not receive a House hearing.