History of the Strategic Water Supply Program
The Strategic Water Supply Act
The Strategic Water Supply (SWS) Program is a groundbreaking initiative aiming to protect New Mexico’s freshwater supply in the face of climate change-induced challenges. House Bill 137 was approved and signed into law in 2025, creating the Strategic Water Supply Act (NMSA 1978, §§ 72-12C-1 through 72-12C-4). The Act authorizes the New Mexico Department of Environment (NMED) and the Office of the State Engineer (OSE) to enter into contracts and award grants for projects that utilize treated brackish water to enhance New Mexico’s Freshwater resources.
The Strategic Water Supply Program
The purpose of the SWS Program is to provide financial assistance for eligible projects that advance the planning, research, development, demonstration, design, permitting, and construction of strategic water supply projects involving treated brackish water to enhance New Mexico’s freshwater resources.
The program supports projects that help New Mexico prepare for long-term water needs and support state, Tribal, and local economic development goals. It also helps make critical water infrastructure more reliable and resilient. The SWS Program funds eligible projects through contracts and grants. Public entities and federally recognized Indian Nations, Tribes, or Pueblos located fully or partly in New Mexico may apply for both grants and contracts. Private businesses and nonprofits may apply only for contract funding. More information about grants, contracts, and open funding opportunities is available on the pages below.
SWS Program Funding Pathways
The Strategic Water Supply Fund
The New Mexico Legislature created the Strategic Water Supply Fund to pay for treated brackish water projects that meet all required state, federal, Tribal, and local standards, permits, and laws. To qualify, projects must meet legal requirements and show economic development benefits. For contracts, projects must also include a community engagement plan that will be made public. The Act also requires the agency to follow state procurement rules, consult with the secretary of economic development, evaluate how proposals will limit greenhouse gas emissions, and notify the state investment council.
The SWS Fund began with $40 million for the first round of grant and contract funding. In 2025, NMED and OSE released funding opportunities for both programs. That process led to three awarded contracts and seven selected grant recipients. In 2026, the Legislature provided another $35 million for a second round of funding opportunities. Visit the program-specific pages for more information about awarded funds and open funding opportunities.
Why Brackish Water?
Brackish water is naturally occurring groundwater that contains higher concentrations of dissolved salts than freshwater. Although it is generally unsuitable for drinking or irrigation without treatment, advances in water treatment technologies have created new opportunities to put this resource to beneficial use.
Developing treated brackish water supplies can help reduce demands on New Mexico’s limited freshwater resources while supporting economic development, drought resilience, and long-term water security.