February 15, 2020

Solar tax credit, transmission line bills advance in the Senate

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Two clean energy bills cleared the Senate Finance committee on Friday: A bill that would expand power line infrastructure throughout the state, and a bill that would reinstate a solar tax credit that expired in 2016.

Gov. Michelle Lujan Grisham has voiced support for both bills.

There were two versions of the transmission line proposal, one in the House and one in the Senate. But Republican Sen. Steven Neville presented HB 50 to the committee instead of his own version of the proposal, SB 6, on Friday.

“This one’s farther along,” Neville told committee members. HB 50, sponsored by Las Cruces Democratic Rep. Nathan Small, passed the House last week with a vote of 48-21.

HB 50 would make transmission line projects eligible for Industrial Revenue Bonds (IRBs) issued by counties and municipalities.

“This would allow some transmission line companies to get industrial revenue bonds. This is not for regulated utilities like PNM, it’s for some of the renewable energy companies that are trying to get their electricity generated off of wind towers and so on,” Neville said.

“Incentivizing merchant transmission in the state is important to the grid in New Mexico, and important for capturing renewable energy that’s sitting idle and potentially stranded in southeastern 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 the bill. 

“Without transmission, renewable energy doesn’t get built,” he said, adding that transmission is difficult to build and much of the west is currently underbuilt.

Democratic Sen. John Arthur Smith of Deming asked whether the issuing IRBs were necessary, pointing to the Energy Transition Act.

“Why should the state grant a concession [for a project] that’s going to happen anyhow because we have a renewable requirement by 2050 that we’re going to be 100 percent renewable,” Smith said. “Why should we be conceding those revenues?”

“There have been lots of projects identified in New Mexico that never got anywhere. Those that are getting somewhere still have to get through permitting,” Ryan said. “The counties say, what’s in it for us? If the county opposes [the project] at the permitting stage, we have a much more difficult time. This gives the counties some compensation, through the payment in lieu of taxes, because they are the impacted entity.”

“We haven’t built any new transmission to upgrade our grids and go after renewable energy. If we don’t find a way to make it a little bit easier to build transmission, we won’t build it and then the generation doesn’t get built,” Ryan said.

The bill passed 7-4. It heads to the Senate floor next.

Solar tax credit passes committee

Albuquerque Democrat and Senate Majority Whip Mimi Stewart’s SB 29 would reinstate a solar tax credit. The legislation would create an income tax credit worth 10 percent of the cost of installation for solar thermal or solar photovoltaic systems for residential, business or agriculture applications. Democratic Rep. Matthew McQueen of Santa Fe is also sponsoring the bill.

Update: The legislation passed the full Senate Saturday evening and is now headed to the House.

Stewart brought an amendment to the bill that reduces the annual aggregate cap from $10 million per year to $8 million per year, and shortens the eligibility period for the tax credit from 10 years to eight years. With the new amendment, the tax credit would become available March 1 2020. 

“The amendment was created after discussion with your committee staff and our Taxation and Revenue Department,” Stewart said.

Stewart said the state lost 25 percent of associated jobs after the initial state tax credit ended in 2016, including sales, installation and maintenance jobs.

After a short discussion, the bill passed 10-1. It heads to the Senate floor next.