Appropriations Committee hears natural-resources budget preview; agencies seek funds for water, geothermal and wildfire programs

The House Appropriations & Finance Committee on Thursday heard a multi-agency briefing on emergency appropriations and major investments in energy and natural resources, with agency leaders urging recurring and one-time funding for water planning, litigation, wildfire preparedness and new energy projects.

The hearing matters because the committee sets recurring budgets and approves special appropriations that determine whether agencies can hire technical staff, complete water-rights settlements, pursue major cleanup projects and accept federal grants that require state matching funds.

Austin Davidson, natural resource analyst for the Legislative Finance Committee, told the committee the Legislature has increased funding for the state’s cumulative natural-resource agencies sharply in the last decade: “the legislature has grown these natural resource agencies cumulatively by a 123.8% over 10 years. Putting a number to that, that's gonna be $59,800,000.” That growth, Davidson said, has accelerated in the last five years and underlies several current requests and differences between the executive and LFC recommendations.

Energy, mining and state parks: EMNRD priorities

Melanie Kenderdine, secretary-designee for the Energy, Minerals and Natural Resources Department, outlined the department’s operating and special-appropriation requests and defended a slate of add‑backs in the executive proposal. On geothermal, Kenderdine said the department seeks $20 million to accelerate mapping, feasibility work and early-stage grants and loans. “A $20,000,000 appropriation could expand [EMNRD's] toolkit to move more quickly to affordable 24/7 clean geothermal energy,” she said, noting federal and private interest in New Mexico resources.

Kenderdine and EMNRD staff also flagged a wildfire preparedness proposal. The executive request would fund a $20 million wildfire preparedness pilot focused on home hardening in Lincoln County; the LFC recommendation included a $12 million wildfire preparedness fund contingent on separate legislation. Kenderdine said the $20 million pilot is “scaled for a pilot project primarily centered in Lincoln County” and would be contingent on passage of the related bill.

State parks drew sustained questioning. Toby Velasquez, director of the State Parks Division, said the division has sought modest fee increases after decades with low fees and that a new reservation system will change how park revenues are collected. Kenderdine said the reservation system collects roughly $6,200,000 annually and that fee changes instituted in January are projected to increase park revenue by up to $5,000,000.

Office of the State Engineer and Rio Grande priorities

State Engineer designate (and Office of the State Engineer representative) and Interstate Stream Commission director Hannah Risley White emphasized staff needs, database modernization and funding to support Indian water-rights settlements and Rio Grande management. The office’s executive proposal includes recurring funding to raise salaries for technical staff and $1 million in IT funding to begin replacing a three-decade-old water-rights database.

Risley White told the committee the office needs funds to support litigation and implementation of settlements. On interstate litigation, she said the executive recommended $5 million for Texas v. New Mexico litigation; LFC recommended no additional litigation funds in its baseline. “The last time that we went to trial in this case, our burn rate was over $3,000,000 a year,” she said, urging the committee to consider contingency funding if settlement talks do not resolve the dispute.

The office also highlighted requests tied to the governor’s 50-year water action plan and the Water Security Planning Act, including a proposed special appropriation to begin regional water planning and outreach.

New Mexico Environment Department: compliance and PFAS

New Mexico Environment Department Secretary James Kenney described the department’s proposal to create a separate compliance and enforcement division that will separate permitting from enforcement duties. The department and both analysts said the executive and LFC largely agreed on the new unit’s budget, but the LFC and the executive differ on a small number of base transfers and some one‑time items.

Kenney also listed special-appropriation priorities, including funds for PFAS response and for a proposed statewide cleanup fund. The department’s nonrecurring request includes money for PFAS response (including a Curry County item discussed in the hearing), brownfields and Superfund projects and a request for one-time funding for neglected groundwater and cleanup sites.

Oil, gas and produced water issues

Committee members pressed agency staff about oil‑and‑gas impacts: orphaned and abandoned wells, produced‑water volumes, and the costs of plugging and remediation. The Oil Conservation Division reported that average downhole plugging costs run about $125,000, while complex remediation cases can exceed several million dollars; the division also said it recently logged a cleanup that passed the $10 million mark. Staff reported industry produced-water volumes in the billions of barrels annually (about 2.1 billion barrels in 2023 and roughly 2.4 billion in 2024).

Votes and motions

Committee members moved to adopt the LFC recommendations for several agency budgets during the hearing. Those motions were recorded and carried after a roll call of opposition on the floor: Representative William Pettigrew was shown in opposition to multiple LFC adoption motions; no other individual opposition votes were recorded in the committee transcript.

What was not decided

Several special appropriations discussed during the hearing showed differences between the executive recommendation and the LFC recommendation: the strategic water supply proposal (the committee heard an estimated $75,000,000 price tag cited in discussion), the scale of geothermal funding, whether to authorize $35,000,000 or $20,000,000 for Indian water‑rights settlements in the executive and LFC recommendations, and the size and scope of a proposed statewide cleanup fund. Committee members asked agencies for additional follow-up documentation and for details on federal funds that agencies are pursuing.

Looking ahead

Agency leaders and analysts repeatedly emphasized staffing, data modernization and the importance of preserving bar/transfer authority to manage federal and special‑revenue funds. “We are attracting significant federal investment in the state of New Mexico, and that in turn is attracting private investment into the state of New Mexico,” Kenderdine said in answer to a budget‑cut scenario question. The committee left several decisions to the budget‑frame negotiations that will continue as the DFA and LFC packages are reconciled.

Ending note

Public comment at the hearing included environmental advocates urging support for PFAS response, uranium‑site cleanup and funding to reduce wildfire risk. Committee members announced follow‑up working groups and said they would continue detailed review of one‑time and recurring requests as the session’s budget process moves forward.