Laying out his vision of a modern, booming New Mexico economy, state Sen. Michael Padilla, D, touted a bill in the 2025 legislative session that he said would incentivize “the construction and installation of microgrids in underserved communities across New Mexico.” Crucially, he added, the development of microgrids for projects like subdivisions or data centers would align “with our environmental goals by facilitating the use of clean energy technologies and reducing greenhouse gases.”
As electricity demand spikes across the U.S. and rolling blackouts plague regional grids, hospitals, universities, small towns, low-income communities and tribes have turned to microgrids for resilient, self-sourced energy powered by solar or wind. By all accounts, Senate Bill 418 appeared to facilitate just that.
Padilla’s initial bill failed, but after some tense, eleventh-hour negotiations, a pared down version passed as an amendment to a broader grid modernization measure. No microgrid in particular was mentioned during the vote. Only in hindsight did it become clear that the amendment was tailor-made for industry, including the construction of what was to become one of the most controversial A.I. data centers in the West — Project Jupiter, a sprawling 1,400-acre campus slated for southern New Mexico.
“I feel really hoodwinked in some ways,” House Rep. Kristina Ortez, D, told High Country News. In the final throes of the session, Sen. Padilla added the amendment, which Ortez, one of HB 93’s co-authors, believed would benefit local hospitals, schools, and fire departments. It wasn’t until months later, when Project Jupiter sparked local opposition, that the realization washed over her: “Oh, my God, this is what that amendment allowed to happen.”
WHEN PADILLA DESCRIBED his bill in a committee meeting, he did so beside Jennifer Bradfute, a lobbyist for Borderplex Digital Assets, one of Project Jupiter’s developers, who he introduced as an “energy expert.” Bradfute said she was working on large digital infrastructure projects in the Borderplex region, which includes Las Cruces and Santa Teresa, New Mexico, El Paso, Texas, and Ciudad Juárez in Mexico, as well as in central New Mexico near Isleta Pueblo. “Our development is focused on solar power generation,” Bradfute said. “The flexibility of using microgrids that could be developed sooner than some of what our public utilities can provide would also provide power solutions for some of our Native American areas throughout the state that have not been able to be served by our public utilities so far.”
Later, in a follow-up hearing, she emphasized the bill was needed “so we can have sufficient legal certainty to invest $5 billion and create 1,000 jobs.”
Though the microgrid bill had early support, it ultimately died due to environmental concerns. However, just as New Mexico’s 60-day legislative session was wrapping up, another Democrat, House Rep. Nathan Small, held an eleventh-hour meeting in his chambers to try and push through certain language from the microgrid bill in the form of an amendment to House Bill 93. This bill aimed to modernize New Mexico’s electrical grid, and the amendment sought to permit the generation and distribution of self-sourced power, allowing “qualified” microgrids to produce 20 megawatts or more of energy — enough to power a small city.
The amendment also stated that unless a microgrid sought to sell energy to a public utility company, it would not be regulated by state authorities. The negotiations in Small’s chambers led to an added provision saying that all microgrids had to conform to the Energy Transition Act, or ETA, , which would require all of the energy they generate and sell to be from net-zero carbon resources by 2045.
Later that day, Padilla brought the amendment to the state Senate with a brief introduction. Paper copies of the language were then handed out, and senators were still reading it when a voice vote was called to add the amendment to the bill. Minutes later, the entire measure passed the Senate. The following day, the House concurred, and the amended bill was approved.
The bill has now opened the door for Project Jupiter and other major industrial development — huge projects that differ markedly from what the microgrid amendment once seemed to promise.
“Since that legislation has passed,” Padilla said in an interview with HCN in late October, “You have Castileon in Rio Rancho,” he said. “You have Pacific Fusion in my district up in Mesa del Sol. So our state really did get really ignited economically.”
Near a subdivision in Rio Rancho, Castileon Corp. is building Project Ranger, a 1,000-acre hypersonic missile manufacturing facility that could lead to dangerous chemical fires, according to reporting in Wired magazine. Pacific Fusion has broken ground on a $1 billion research and manufacturing campus near Albuquerque to build modular nuclear fusion power plants for nuclear weapons research. Both projects purport to create hundreds of local jobs.
PROJECT JUPITER’S MICROGRID AIMS to generate about the same amount of energy as New Mexico’s largest public utility company, PNM. That’s enough to power half a million homes and more than 100 times the amendment’s 20-megawatt minimum — all from one microgrid powered by fuel cells converting natural gas into electricity.
Project Jupiter’s next hurdle is an air quality permit from the New Mexico Environment Department, or NMED. After NMED posed questions “concerning the accuracy of emissions testing” in the permit application, two Project Jupiter developers, Oracle Cloud Infrastructure and Yucca Growth Infrastructure, said they would reduce projected emissions by 35%, from 8.8 million tons to 5.7 million tons per year.
“NMED’s staff asked hard technical questions, and they pushed us to address the concerns raised by the public,” said Mahesh Thiagarajan, executive vice president and head of Oracle Cloud Infrastructure, in a statement. (The data center campus is already under construction, while the microgrid, a separate facility subject to the air quality permit, is not.)
But even the reduced amount of emissions would be comparable to “the total pollution created by the cities of Albuquerque, Santa Fe and Las Cruces, combined,” according to Mariel Nanasi, a senior attorney and executive director of New Energy Economy, a Santa Fe-based nonprofit that advocates for clean energy in frontline communities. The nonprofit filed a motion to dismiss Project Jupiter’s air quality permit application; Nanasi noted that those 5 million tons of emissions would be emitted in the Paso del Norte region, which includes Santa Teresa, an “already vulnerable environmental justice community.”
The microgrid amendment to HB 93 was “the precursor to Project Jupiter,” according to Nanasi.
Before the amendment went into effect, a 2019 law mandating that public utilities transition to renewable energy gave the Environment Department and the Public Regulation Commission, the state regulator that oversees public utility companies, oversight of entities not normally under their purview if there was a “material increase” in those entities’ greenhouse gas emissions. Solar panels on a single house or a backup generator for a hospital wouldn’t trigger that oversight because the energy would be negligible, Nanasi said, but Project Jupiter certainly would have.
Given the size of its projected greenhouse gas emissions, “Project Jupiter would not have passed muster under the renewable portfolio standard,” Nanasi said, calling the effort an “end run around public regulation.”
In the 2026 legislative session, Sen. Jeff Steinborn, D, proposed a microgrid oversight bill that would have given the state the authority to regulate microgrids, required proof that microgrids meet renewable energy standards, and prevented microgrids from increasing utility rates. It passed the Senate but did not get a hearing in the House.
MUCH OF WHAT ENABLED Project Jupiter so far happened under the radar. In late 2024, state officials from the Environment Department and other agencies convened to draft the terms of a memorandum of understanding with Bradfute, the Borderplex Digital Assets lobbyist, which Gov. Michelle Lujan Grisham announced in February of the following year at an official signing. According to a press release, the state had entered into a “groundbreaking partnership” that was projected to bring 1,000 jobs to the Borderlands and billions of dollars in construction, IT and equipment purchases. Padilla and Small were both present at the signing.
Save for this announcement, Project Jupiter was virtually unknown to the public when the 2025 legislative session began. So was Borderplex Digital Assets, the Austin-based tech company that was helping to develop it. The company did not reply to multiple requests for comment.
It was around this time that Small, arguably one of the most powerful Democrats in the New Mexico Legislature, held a meeting with the environmental advocates who’d rallied against the original Senate bill. Small made it clear to the advocates that the only option was to come to an agreement, enabling an unnamed project he characterized as a boon to the economy of southern New Mexico and a way to diversify from oil and gas. At the table were Bradfute, of Borderplex Digital Assets, and Cholla Khoury, the chief of staff of the Public Regulation Commission.
After hours of tense negotiation, the advocates conceded to the amendment on the condition that it include language mandating that any energy generated and sold from a qualified microgrid had to abide by the 2045 renewables deadline set by the Energy Transition Act. To some, that was little consolation.
Later that evening, Bradfute made a few final revisions by email, saying she’d send them to the “drafter,” the legal professional charged with making the language statute-worthy. Less than an hour later, the amendment was being voted on by the Senate.
This reporting is based on multiple interviews with more than a dozen people and reviews of emails obtained by HCN through a public records request.
“As the Chair of the House Appropriations and Finance Committee, I am frequently invited to meetings by stakeholders, including environmental advocates, who want to discuss important legislation that may have a significant fiscal impact on our state,” said Small in a statement to HCN. “Without this bill, the state would have a much harder time regulating the exploding number of microgrids coming online in the next decade and keeping energy costs down for New Mexicans.”
A Public Regulation Commission spokesperson said in an email, “Chief of Staff Cholla Khoury attended the March 20, 2025 meeting to provide information regarding PRC authority and regulation of investor-owned utilities in New Mexico.” He added, “The PRC provided information only and did not support any agreement or subsequent legislation.”
Jennifer Bradfute did not respond to questions from HCN.
ORTEZ, ONE OF HB 93’s CO-AUTHORS, said she was debating another bill on the House floor when that meeting was taking place and only learned about it afterward from some of the environmental advocates present. Among them was Tammy Fiebelkorn, government affairs manager for Western Resource Advocates and an Albuquerque City Councilor. She spoke about the closed-door meeting at an interim committee hearing last year under questioning from House Rep. Micaela Lara Cadena, whose district covers the area where Project Jupiter seeks to operate.
“This is one of the dirtiest pieces of politics I’ve now seen and felt in our political body,” Cadena said to hearing participants after the questioning.
Western Resource Advocates declined to comment.
Sen. Padilla, who was present at the hearing, was adamant that nothing “underhanded” happened and that he’d had “very detailed conversations” with Ortez in the lead-up, “so that she knew exactly what we were doing on the Senate side.”
Ortez told HCN, “I don’t remember having an in-depth conversation with him. I surely did not have the conversation that this was for a data center. Absolutely that did not happen.”
Ortez said that another Borderplex Digital Assets lobbyist, Vanessa Alarid, a controversial figure, sent her a $10,000 campaign donation, which Ortez said she promptly returned. (The donation is not reflected in campaign finance records, a search by HCN found.) Rep. Small also received a $10,000 donation from Borderplex Digital Assets in August 2025, according to campaign finance records, which he returned in June 2026, after the primaries. “I returned the contribution from Borderplex in response to the environmental and community concerns I heard from constituents in our district about this new, fast-moving industry,” he said in an email to HCN, adding that he now supports a temporary data center moratorium. Alarid did not respond to a request for comment.
Padilla received multiple campaign donations in a single day totaling $42,400 from a cluster of people related to Alarid. “I raise money from a lot of different sources,” he said of the campaign donations. “I don’t know who she’s connected to or not connected to.”
An amendment that enabled microgrids to operate in the state could have been a “good thing,” Ortez said. They are often considered a sustainable alternative to electrical utility monopolies. But microgrids can also be Trojan horses for industry, including data centers.
When asked if the microgrid amendment was a lesson to other states, Ortez was blunt: “Hell yeah, this is a cautionary tale. As a legislator, when there are amendments that you don’t know the ramifications of, you have to continually ask.”
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