A bill that would enable counties to issue special bonds to incentivize the expansion of power transmission lines in the state passed the House Energy, Environment and Natural Resources Committee Tuesday.
HB 50, sponsored by Rep. Nathan Small, D-Las Cruces, would make transmission line projects eligible for Industrial Revenue Bonds (IRBs) issued by counties and municipalities. The bill’s proponents argued it would support more renewable energy development in the state and it would help bring wind energy generated in New Mexico to western markets.
“That’s the holy grail in New Mexico,” said former state Sen. John Ryan, who now serves as executive director of the SunZia Southwest Transmission Project, a transmission line project currently being constructed near White Sands Missile Range. Ryan served as an expert witness for Small’s bill.
“We’ve got great wind. In fact, our wind in New Mexico is as good or better than any other wind in the United States,” Ryan said. “We’ve got lots of it too, we just now need to get it to market.”
“It is widely known that transmission is a bottleneck for all parts of our state,” Small told the committee, adding that such facilities are “vitally needed” and will “greatly help local economies, especially rural communities, through the development of these energy and transmission resources.”
Representatives from the state Economic Development Department and the Energy, Minerals and Natural Resources Department’s Energy Conservation Management division said their respective departments support the bill.
The bill passed the committee with a 8-4 vote. A sister bill passed the Senate’s Corporations and Transportation Committee unanimously a day earlier with little discussion or opposition.
But House committee members wanted more information about the details of the bill and how it might impact New Mexicans. Multiple representatives expressed concern about local control and public participation of transmission projects.
Rep. Andrea Romero, D-Santa Fe, raised concerns about the lack of clear definitions of some of the terms in the bill, including what type of facilities would be considered “transmission” facilities that would be eligible for IRBs.
“If we had a definition, or at least an understanding of what we are going to be anticipating, I think our communities might be a little bit more favorable to what is coming in within these merchant transmission lines,” Romero said.
Small argued that the IRB act gives counties and municipalities more flexibility in addressing issues that may arise for transmission lines.
“We think that by allowing counties and municipalities, who are very experienced in industrial revenue bond practice, giving them the ability to work with transmission facilities will allow them to negotiate financial agreements that work for those counties and school districts,” Small said. “This will also give them a very good tool to work with all of the other issues — mainly siting — that come with transmission projects.”
“An industrial revenue bond project that’s passed by ordinance has a robust public input process. We think this is a tool that is very appropriate for our time. It’s voluntary, and we think that the flexibility of this tool will enable transmission projects with public input, that we think will be beneficial for the state,” he added.
Rep. Larry Scott, R-Hobbs, said he’s worried counties could possibly lose out on revenue streams through the issuance of IRBs and payments in lieu of taxes. House Minority Leader Jim Townsend, R-Artesia, was similarly concerned about how the bill might impact school districts that would receive revenue from taxes on such proposals.
“From our perspective their payment [to school districts] cannot be less than would be due under their current tax structure. I can’t imagine us allowing a bill to go through that would deprive a school district [of revenue],” Townsend said.
Minority Whip Rod Montoya, R-Farmington, said he didn’t support the bill because he believes it may incentivize county governments to use eminent domain to override landowner opposition to transmission projects.
“My concern is this would allow for companies who are looking to get one of these projects passed to be able to bypass what’s been, in my opinion, the largest roadblock, which has been ‘not in my backyard,’” Montoya said. “It appears in some instances it may be less expensive for the developer to go through the county and make a better deal on the IRB so that it suddenly becomes a county interest.”
He said he would support the bill if there was some provision that would prohibit counties from imposing eminent domain on such projects.
Committee chair Matthew McQueen, D-Santa Fe, said he’s not convinced the IRB mechanism would enable more public input.
“I have less confidence than Rep. Small that [public input] will be ‘robust’ as he said,” McQueen said.
McQueen brought up the Western Spirit transmission line, which was slated to be built near Mountainair, a small community in his district. The community opposed the plan, and the State Land Office organized a meeting between line owner Pattern Energy and the public to discuss the issues. Pattern Energy ultimately decided to move the line.
“I’m still concerned that there is no process, there’s no rules or procedures. That was us relying on the goodwill of Pattern Energy. We need to consider other circumstances where we might not get that,” McQueen said. “As far as I know, we’re still lacking that process.”
Small said those types of issues can be dealt with at the county commission level, and emphasized that the bill would enable more public input on such projects, not less.
“I think we’re addressing one piece of a bigger puzzle, and I’m concerned that we’re not looking at the whole picture,” McQueen said.
Reps. Scott, Townsend, Montoya and McQueen voted against the bill.
Rep. Melanie Stansbury, D-Albuquerque, voted in favor of the bill, but added that she does not support subsidizing private industry, and that she also has concerns with local control.
“I’m a strong proponent in investing in what I see as public good infrastructure, and transmission is clearly a public good,” she said. “We need to modernize our grid to make sure we have appropriate infrastructure, and we need private business at the table in order to do that, so I support this bill.”
The bill is headed to the House Taxation and Revenue Committee next.