This bill establishes new regulations regarding the generation and distribution of self-sourced power in New Mexico, specifically through the creation of qualified microgrids. It allows individuals and entities to utilize qualified microgrids for electricity service, which can also supply power to public utilities or distribution cooperatives under an electric service agreement. The bill clarifies that energy generated from self-source generation resources for qualified microgrids will not be classified as retail sales, and those providing self-source generation sales will not be deemed public utilities or distribution cooperatives.

Additionally, the bill introduces a Qualified Microgrid Income Tax Credit for taxpayers who construct and install qualified microgrids in underserved communities before January 1, 2031. The credit is capped at $100,000 per microgrid and is available to taxpayers who meet specific eligibility criteria. The bill outlines the application process for certification of the tax credit, the ability to transfer the credit, and provisions for carrying forward any unused credit for up to twenty years. It also defines key terms such as "qualified microgrid" and "underserved community" to ensure clarity in implementation.