State officials are pushing a new legislative bill that would change tax laws because they believe it will encourage Tres Amigas to build their headquarters in eastern New Mexico rather than west Texas.
Tres Amigas is planning to build a power grid near Clovis that will connect North America’s two major power grids and one smaller grid to enable faster renewable energy.
But tax incentives available in Texas make it more desirable to set up its business offices in west Texas, said a company official.
The New Mexico House, Industries and Business Committee plans to meet at the state capitol today to discuss House Bill 116, which creates “certain deductions in the Gross Receipts and Compensating Tax Act for converting electricity and operating an electricity exchange,” according to the bill.
“Under current law, sales on electricity are taxable when the sales take place within New Mexico,” said state Rep. George Dodge, whose district includes parts of Curry and Roosevelt counties. “And the purpose of the deduction is to encourage electricity development of electrical transmission capacity in New Mexico.”
Dodge and Clovis Industrial Development Corporation Executive Director Chase Gentry both said the bill is important because it could play a role in influencing the Tres Amigas corporation to keep their facility headquarters in eastern New Mexico rather than west Texas, which already offers similar tax savings.
“Tres Amigas is going to be the first facility in the nation to connect three electrical grids in the U.S. It will be a profitable operation for eastern New Mexico,” said Rep. Dennis Roch. “We haven’t had legislation like this before because we haven’t had an operating facility like this in the nation before. I think it will really have a positive impact on out state.”
Roch said the conversion station that connects the power grids will definitely be placed near Clovis.
But whether the station’s operating facility will be placed in New Mexico or west Texas is debatable, and that’s where the bill can help, according to Roch.
“There’s support from Albuquerque, Rio Rancho and the east side too. We haven’t seen a lot of people against it,” Gentry said of the bill. “What we’re hoping is if this goes through, we’ll be able to maintain all the jobs they (Tres Amigas) will create.”
Gentry said if the committee passes the bill, it will move on to the Taxation and Revenue Committee then on to the House of Representatives for a vote.
Dodge said Tres Amigas could provide up to 600 jobs in New Mexico during its construction phase, expected to begin in July, and up to 400 jobs when it is operational.
“What we’re trying to do here is provide jobs in New Mexico and get Tres Amigas online, so we can find a way for wind energy facilities to sell their wind energy and in doing so, we can create a way to serve our wind energy partners in New Mexico,” Dodge said. “Anything we can do to bring jobs to New Mexico, I’m for 100 percent. As far as I know, every representative and senator in this area is in support of it.”
David Stidham, senior vice president and chief operating officer for Tres Amigas, said the outcome of the bill is definitely an important deciding factor on whether or not the operating facility will be built in eastern New Mexico, but there are many other deciding factors to consider as well.
“Location of any facility like this, you would look at available housing in the community, available education, available trained workforce,” Stidham said. “You have to look at what airline facilities are available in the community; what transportation roads are available. What housing is available for our technicians and how much will it cost?”
Stidham said with the number of factors to consider in building the operating facility, he said what encourages his company with New Mexico is the feel of the local communities.
“One of the factors in deciding the conversion center in New Mexico is it’s very business friendly and the community is really helping us with our business licenses and other things,” Stidham said. “The people around the community realize it will be an economic boom for them, so they have been very helpful. It will encourage the construction for a lot of renewable energy projects in the area.”
Stidham said he will be attending today’s committee meeting in Santa Fe but only to answer technical and construction questions about the Tres Amigas project.