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Project Jupiter draws sharp local and legislative scrutiny over water, emissions and incentives
Summary
State officials, community leaders and environmental analysts clashed at a committee hearing over Project Jupiter, a proposed large AI data center and associated natural-gas generation, raising questions about local water supplies, emissions, economic incentives and a legislative microgrid change that may reduce regulatory review.
A late-January legislative panel heard competing claims about Project Jupiter, a proposed large-scale AI data center in southern Dona Ana County, as state economic development officials touted projected tax payments and job counts while community leaders and policy analysts warned of opaque negotiations, water risks and large greenhouse-gas emissions from an on-site natural-gas plant.
Mark Roper of the Economic Development Department described the package of incentives and projected revenues the county expects if the project proceeds, saying the project's property now generates about $55,000 in annual taxes and that negotiated payments in lieu of taxes (PILT) would be $12,000,000 per year under the Industrial Revenue Bond (IRB) arrangement. He presented estimates of long-run gross receipts and construction-based revenue, and cited the Los Lunas Meta project as a case study of local economic growth tied to data centers.
Community representatives and analysts pressed deeper. Daisy Maldonado, director of Empowerment Congress for Dona Ana County, said residents had not been given clear information about project scale, ownership and environmental protections and raised long-standing arsenic issues in local drinking water. "There's been a huge lack of transparency in this whole process," Maldonado said. She also noted the Camino Real Regional Utility Authority is set to dissolve in mid-2026, which she said complicates claims about who would receive and manage promised water improvements.
Stacy Tellinghuizen of Western Resource Advocates summarized a recent WRA analysis that flagged large potential impacts if proposed loads materialize. Depending on configuration, large data-center clusters can draw substantial electricity and water: WRA estimated Project Jupiter's energy need at 700'900 megawatts and modeled 2'3 million tons of CO2 emissions per year in scenarios that rely on on-site gas-fired generation. WRA recommended durable consumer protections in contracts with utilities, speed-to-interconnection for clean resources, and transparent water-use reporting.
Tanya Trujillo, Deputy State Engineer, reminded the committee that water demand depends on both energy source and cooling method (air-cooled systems use less water but more energy; water-cooled systems use more water but less energy). She outlined the Strategic Water Supply Program (statutory citation: 72-12C sections 1'4), a legislative initiative with an initial $40 million appropriation to support treated brackish-water projects, and said applications for those funds already exceed available capital.
Several legislators questioned whether an amendment added to HB 93 in the Senate's final days — which created a defined microgrid pathway and limited PRC jurisdiction for islanded microgrids — permitted Project Jupiter to avoid standard PRC interconnection review and to operate an on-site gas plant that would not sell power to the grid. Representative Cadena and others argued the amendment was not fully vetted in the House and effectively enabled the project; Economic Development officials said the department supported HB 93 but asserted the agency was not party to the late amendment negotiations. The State Engineer said she was not yet aware of a formal water-application associated with Project Jupiter.
Economic projections given to the committee include claims about jobs and tax revenues that drew scrutiny. Roper said the project would create about 750 full-time permanent jobs and an estimated 2,000 construction jobs on-site during peak construction; other lawmakers and community members noted that long-term operational employment for some data-center projects is often small and that the scale of tax abatement under an IRB can be large relative to the PILT payment. Representative McQueen and others calculated that the 5% PILT figure implied a large annual tax abatement for the project if the 95% property-tax abatement were applied to very large equipment and real property values.
The committee did not vote; members scheduled a site tour and asked agencies to report back with more detailed economic analyses, any formal water-application filings, and more transparent documentation of incentive terms. Community leaders asked the legislature for formal requirements for environmental and community-impact studies before incentives are granted.
