Chaves County commissioners were handed a chance on October 15 to start formal negotiations on an $86 million industrial revenue bond package for NextEra Energy Resources LLC, and they didn’t take it. A motion to vote on the resolutions got no second, effectively putting the matter on hold for two proposed battery energy storage facilities the company wants to build on land it already uses for solar power.
The proposed ordinance would authorize Chaves County to issue up to $86 million in bonds on behalf of NextEra Energy Resources LLC, according to nm.news. Two resolutions, R-26-051 and R-26-052, represented Chaves County and the local school district, and were meant to declare the county’s intent to move forward, according to the outlet. The county’s October meeting agenda does list Resolution R-26-051 as declaring Chaves County’s intent to issue industrial revenue bonds, per the Chaves County Board of Commissioners agenda, though the full terms of both resolutions were not laid out in that document.
Commissioners Push Back on the Numbers
Commissioner Herbert Corn said he didn’t feel the project was needed at the moment, and argued NextEra had sufficient resources to stand on its own, per nm.news’s account of the meeting. Corn cited financial figures he said came from Macrotrends, a site that provides financial information about stocks and long-term investments, stating that NextEra Energy had total equity of $163.3 billion as of October 20. Corn also said the NextEra Energy Resources CEO receives annual compensation of more than $24 million, while NextEra Energy employees receive median annual pay of about $164,000, according to the same report.
Commissioner Cliff Waide raised a separate concern, saying he did not understand the project apart from the effort to obtain a tax abatement and asking whether there was another reason behind it. Chaves County Attorney Martin Riggs told commissioners the proposed tax abatement would cover the property for 20 years, even though it currently generates no county revenue, the outlet reported. Waide also said the company and the county want value for the community, reflecting a theme that ran through the discussion.
NextEra’s Pitch and the Community Benefits Push
Chaves County Manager Bill Williams said the resolutions offer an inducement to businesses to continue negotiating and to provide more details to share, according to nm.news. Kayla Di Donado, an associate project manager for NextEra, said that at an earlier ETZ hearing, the committee felt it was not seeing the desired economic benefit from the rezoning permit. She said NextEra is working on the project to address the committee’s concerns and ensure commissioners feel they are getting value, per the report.
The bond resolution reportedly states that any agreement would not obligate the county to further action unless approved by the county commission. NextEra Energy Resources LLC would be financially responsible for the bonds themselves, according to nm.news. Separately, NextEra has said it is working with the Roswell-Chaves County Economic Development Corporation on a Community Benefits Agreement for area residents, according to a Chaves County economic-development page.
What’s Already On the Ground
NextEra proposes to construct a 15-acre battery energy storage facility at 445 Wrangler Road and 70 Outlaw Trail in Chaves County, per nm.news. The battery facilities would complement two solar energy plants that have operated at the location for a decade across 1,400 acres, the outlet reported. Those existing solar sites contain roughly 600,000 solar panels and provide capacity to power more than 40,000 homes, figures that line up with what NextEra Energy Resources told Chaves County’s economic-development office about its Roswell and Chaves County Solar Energy Centers, which were commissioned on October 6, 2016, according to a NextEra Energy newsroom release from that time.
NextEra said those solar projects created about 300 construction jobs and five full-time operating positions, and were expected to generate $660,000 per year in payments in lieu of property taxes for the local area, per the same release. The company has also said it has two proposed 50-megawatt battery energy storage sites in Chaves County, and the county’s economic-development page separately describes three total solar projects in the region and two battery storage systems in development.
How Other New Mexico Counties Have Handled Similar Deals
Chaves County’s hesitation contrasts with how Bernalillo County recently handled a comparable project. Commissioners there approved a $1.2 billion industrial revenue bond for DESRI to build a 400-megawatt solar and battery storage project, according to nm.news’s coverage of that deal. It was the first project to go through Bernalillo County’s new Community Benefits Rubric, which ties a tax break to specific public benefits through a formal Community Benefits Agreement, and DESRI agreed to contribute up to $2.9 million to a Community Benefit Fund during construction. That project was expected to create more than 1,600 construction jobs and generate $93.7 million in construction wages, along with six permanent specialty positions averaging $101,000. NextEra itself is negotiating a similar community benefits agreement for its proposed Magpie Energy Center, the outlet reported, and after residents raised concerns at an August 25 Bernalillo County commission meeting, DESRI agreed to include an average 500-foot-wide wildlife corridor and animal-friendly security fencing.
Doña Ana County has also used industrial revenue bonds for large energy-adjacent infrastructure, approving bonds for a data-center development that included four data centers along with micro-grid power generation and battery storage facilities, according to Bond Buyer. That bond structure provided property-tax abatements and a gross-receipts-tax deduction for equipment purchases, with the project’s chairman estimating combined daily water use for the data center and its microgrid at around 40,000 gallons.
The Legal Backdrop on Industrial Revenue Bonds
Industrial revenue bonds of the kind under discussion in Chaves County are generally structured so the issuing government isn’t on the hook if something goes wrong. The New Mexico Legislative Finance Committee has reported that bonds issued under the relevant acts are payable solely from project revenues and do not constitute general obligations of the issuing government, though that is general statutory context rather than a description of the specific Chaves County proposal’s terms. Separately, state law excerpted by the New Mexico Legislature says that before adopting an ordinance to issue county industrial revenue bonds, a county must give notice to the county assessor and any entity within the county authorized to levy taxes, though the cited excerpt does not spell out the full notice requirements.
The committee’s report also notes that only electric generation, transmission, and energy storage facilities are statutorily required to make annual payments in lieu of property taxes to affected school districts — a detail relevant given that Resolutions R-26-051 and R-26-052 represented both Chaves County and the local school district. For now, with no second vote cast on October 15, the bonds remain in limbo while NextEra and county officials work toward whatever comes next.
