yeah...2 proofs of addresses is all they want, doesn't matter what they are. the easiest ones you can provide are mails your sister receives at her house/apt. i'm not from NM, i'm in Utah. when i applied for driver's licence (like 2 months ago) officials at DMV asked me to bring to recent mails i got (doesn't matter who sent those mails, it can be your relatives, bank, credit card company, electricity provider, etc). if i didn't have any recent mails, they told me to go to any post office and send two mails to myself and bring those two mails to them. but i had some mails i got from my bank so i took them and it worked. 
i think the process for issuing a state ID is similar to that for licence, so make sure you give them a reliable address because that's where they'll ship the ID card.
plus, they need some documentation that shows your sister's identity: either a birth certificate or an unexpired passport if she doesn't have any of these, i don't think she'll get a state ID
**based on what you've been saying, it seems like you are trying to create a mock address and provide proofs of that address to the authorities instead of providing proofs of the address where your sister lives now, all i can suggest is that don't do it. you said that she's already out of status, and you don't know if her passport is still valid-creating false address to get an ID might complicate situation.