The Department of Energy (DOE) prepared this Environmental Assessment (EA) to evaluate the potential environmental impacts of providing a financial assistance grant under the American Recovery and Reinvestment Act of 2009 (Recovery Act) in a cooperative agreement with the Public Service Company of New Mexico (PNM) as part of the Smart Grid Demonstrations Program. If PNM received the funding, the company would install a 2- to 4-megawatt-hour advanced absorbed valve-regulated lead acid battery, an access road, a parking lot, and a 3,000-foot underground electrical tie-in to the existing power distribution system (the proposed project). PNM would also install separately a collocated utility-scale solar photovoltaic array with an output of about 500 kilowatts at its own expense. The goal would be to use the battery, along with a sophisticated control system, to turn solar energy into reliable dispatchable generation resource. This EA analyzes the potential environmental impacts of DOE's proposed action of providing Recovery Act funding and of the No-Action Alternative. DOE's proposed action is to provide about $1.8 million in financial assistance in a cost-sharing arrangement to PNM. The cost of the proposed project would be about $5.9 million. In this EA, DOE evaluates the impacts to air quality, noise, aesthetics, soils, geology, water resources, biological resources, and cultural resources from DOE's proposed action and PNM's proposed project.