The unanimous vote escalates a dispute over Oracle's proposed El Paso Electric connection and the data center's commitment to generate its own power.

Damien Willis, Organ Mountain News

LAS CRUCES - Doña Ana County commissioners voted unanimously Tuesday to authorize formal notice of a potential breach of Project Jupiter's industrial revenue bond agreements, escalating a dispute over the massive data center development's proposed connection to El Paso Electric.

The 5-0 vote came after commissioners spent more than two hours in closed session discussing legal matters, including the project's agreements. Commission Chairman Manuel Sanchez said the county would notify the developers of a potential breach involving their proposed power-generation plan and begin discussions about a possible resolution.

The action does not establish that the developers violated their agreements or mean the county has revoked the $165 billion industrial revenue bond authorization supporting the project near Santa Teresa. Instead, commissioners authorized county management and legal counsel to raise the potential breach formally with the Project Jupiter entities.

The decision follows an Oct. 13 commission meeting at which Oracle executives introduced a proposed arrangement with El Paso Electric to supply a small portion of the development's electricity needs. Commissioners questioned whether connecting to the utility would conflict with commitments made when the county approved the project.

Commission authorizes potential breach notice

The commission returned to open session at approximately 3:26 p.m. Tuesday after a closed session that began around 12:42 p.m.

"I'd like to make a motion that we authorize county management and legal to provide notice to Project Jupiter entities for the potential breach of IRB agreements regarding their proposed power generation plan and engage in discussions to identify a potential path forward working with Doña Ana County," Sanchez said.

Commissioner Susana Chaparro seconded the motion. Commissioners Christopher Schaljo-Hernandez, Susie Kimble and Chaparro, Vice Chair Gloria Gameros and Sanchez all voted in favor.

The vote followed remarks Sanchez made earlier Tuesday during commissioner input, addressing questions raised by residents about whether the project's proposed connection to El Paso Electric would comply with the existing agreements.

"Just to make clear, the IRB, as written within the community benefits agreement, does require among the requirements that there is no connection allowed," Sanchez said, according to the meeting transcript. "All the generation for the facility would be on-site through the microgrid, and hence no connection to El Paso Electric would be allowed."

Sanchez also pointed to provisions intended to protect existing electricity customers from increased costs.

"And so the question becomes, are they enforceable? The answer is yes," Sanchez said. "There are ways in which the company could become in breach should they go in that direction."

Those remarks represent Sanchez's interpretation of the agreements. The actual contractual language is important in determining what the developers promised and what the county can enforce.

What the signed agreements actually say

Project Jupiter's executed community benefits agreement, signed Nov. 12, 2025, includes an explicit commitment to generate electricity on-site.

"Project Jupiter will power itself with an onsite microgrid system," states Section 8.4 of Exhibit A to the agreement.

The provision specifies that the system will include natural gas generation and large-scale battery storage, with renewable energy integration under exploration. It also requires the companies to pay for the microgrid and the electricity used by the data center.

"The Onsite Microgrid System will not impact existing customers' power reliability or costs," the agreement states.

The section does not expressly say that Project Jupiter may never connect to El Paso Electric. Sanchez and other commissioners have interpreted the on-site power commitment as prohibiting Oracle's proposed connection, but whether that proposal constitutes a contractual breach has not been established.

The agreement also specifies how the county may enforce the developers' commitments.

Under Section III, the county must pursue remedies through the developers' respective industrial revenue bond leases, subject to applicable notice and opportunities to remedy violations. Those remedies can include termination of the applicable leases, although the specific provisions and limitations would determine which remedies apply to an alleged violation of the on-site power commitment.

The agreement does not authorize the county to recover separate damages or demand specific performance directly under the community benefits agreement, except for a separately identified right to seek certain unpaid financial commitments from the project's guarantor.

The full terms are available in the county's executed Series 2025A IRB documents, which include the community benefits agreement, and the original September 2025 IRB approval packet.

Oracle's proposed connection drew objections Oct. 13

The dispute emerged publicly two weeks earlier, when Oracle representatives presented a proposed energy services agreement with El Paso Electric.

Oracle said the arrangement would supply less than 3% of Project Jupiter's electricity needs, primarily for construction, equipment commissioning, emergency backup and life-safety operations. The company maintained that its natural gas-powered microgrid would remain the development's primary electricity source.

To address concerns about possible impacts on utility customers, Oracle proposed up to $55 million annually in bill credits for residential and small-business customers over three years. The proposal also included a commitment to purchase at least $100 million in electricity over 10 years.

Commissioners objected that the utility proposal had not been included in the presentation materials they received before the meeting, leaving them little opportunity to evaluate its potential implications.

"We read this presentation so we can prepare questions for you today," Kimble told Oracle representatives during the Oct. 13 meeting. "Now you're telling us new stuff. It is disrespectful."

Schaljo-Hernandez opposed connecting the development to El Paso Electric, citing the county's original intent to shield existing electricity customers from costs associated with Project Jupiter.

Sanchez raised a more direct contractual objection.

"That is not allowed under the IRB as it's written. It would require an amendment to the IRB," he said during the Oct. 13 meeting.

Sanchez also said such an amendment would require approval from at least three commissioners.

Oracle Executive Vice President Magesh Thiagarajan indicated that the company was willing to reconsider the proposed utility arrangement in response to commissioners' concerns. The discussion ended without an agreement on whether a connection would legally violate the existing contracts or definitively require an amendment.

The exchange was part of a broader presentation on Oracle's renewable-energy plans, detailed in Organ Mountain News' Oct. 14 report on Project Jupiter's proposed carbon-free electricity investments.

During that meeting, Oracle outlined a separate initiative to develop or procure 2 gigawatts of carbon-free electricity in New Mexico, with the goal of matching the project's electricity consumption by 2031.

Kimble questioned whether those renewable investments would actually reduce emissions from Project Jupiter's on-site natural gas power system.

"The reality is it doesn't really lower those emissions for Oracle to build new solar or other renewable generation," Kimble said. "It doesn't directly eliminate Jupiter emissions."

Thiagarajan acknowledged that directly supplying the Santa Teresa data center with the proposed renewable generation was not Oracle's current plan, although the company could reconsider that approach.

The broader renewable-energy discussion and the proposed El Paso Electric connection raised separate questions: whether Project Jupiter's environmental commitments would produce benefits near the site and whether its proposed power arrangements complied with the county's existing contracts.

Oracle's renewable energy plan raises questions over Project Jupiter emissions, local benefits

Oracle's renewable energy plan may not directly power Project Jupiter, raising questions about local benefits and 8.8 million tons of potential annual emissions.

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What happens next

Tuesday's unanimous vote escalates the dispute that began publicly on Oct. 13.

Commissioners previously questioned Oracle's proposed connection and whether it could proceed without amending the agreements. They have now authorized county officials to notify the developers of a potential breach and seek a resolution.

The commission did not publicly declare that a breach had occurred, approve an amendment or vote to terminate any industrial revenue bond leases.

The agreements contain notice and cure provisions that could become relevant if the county formally alleges a violation. However, the commission's public action Tuesday did not establish that a formal notice had already been delivered, identify a specific remedy period or determine what enforcement action might follow.

Those questions remain unresolved as county officials and Project Jupiter's developers consider how to address the disputed power-generation proposal.

Organ Mountain News contacted Oracle on Wednesday morning seeking comment on the commission's action and clarification of the company's proposed power arrangements. Oracle had not responded by publication time.

Damien Willis is founder and editor of Organ Mountain News. If you have a personal story to share or a lead we should follow up on, reach out at OrganMountainNews@gmail.com or connect with him on X at @damienwillis.