Solar developers seek industrial revenue bonds to assist with projects in San Juan County
A final decision on industrial revenue bonds for Photosol US will be made in February
AZTEC — Solar developers coming into San Juan County are seeking industrial revenue bonds that will provide some tax relief for their projects without the county and other entities losing tax money or taking on extra fiscal burdens.
This requires the San Juan County Commission to approve issuing the bonds and acting as a vehicle that allows the developer to receive tax benefits. However, the developer will be responsible for paying the bonds and San Juan County will not take on any financial liability for them.
Photosol US has asked for the county to partner with the San Juan Solar Project's developer for industrial revenue bonds. On Jan. 1, the County Commission approved publishing a notice of intent to adopt. The meeting was streamed live on YouTube.
The County Commission will vote on whether to issue those bonds on behalf of Photosol during a meeting in February.
Meanwhile, during the Jan. 19 County Commission meeting, 8Minute Solar presented information in hopes that the county will also approve issuing industrial revenue bonds for the Rockmont Solar Project.
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Photosol has agreed to provide payments in lieu of taxes that will replace all of the property tax it would otherwise pay to the county, Central Consolidated School District and San Juan College and is seeking only relief from the gross receipts and compensating taxes.
8Minute Solar would have a similar arrangement.
This is required under the Energy Transition Act because both projects were awarded power purchase agreements with Public Service Company of New Mexico to replace the electricity it currently receives from the San Juan Generating Station.
"Once you set up an IRB, it's not subject to property tax because it is 'owned by the county,'" 8Minute Solar Vice President Dan Nelson explained. "Accordingly, we enter into a PILOT, a payment in lieu of tax agreement, with the county pursuant to which we agree to pay to the county and all the local tax jurisdictions the amount of tax that we would have paid you if it was 100% taxed."
Nelson anticipates that his company's project will provide $6 million in payments in lieu of taxes over the first 10 years and $9 million over the first 20 years.
Details about Photosol's payment in lieu of taxes as well as protections that will shield the county from liability will be discussed during a February meeting.
"We appreciate that the property taxes are going to be paid in full," said County Commission Chairman John Beckstead. "I think that comes as a requirement under the ETA, but we do appreciate that and we appreciate these projects."
Photosol’s industrial revenue bonds will not exceed $450 million and will be split up between the battery storage, the solar array and transmission.
Photosol US CEO Josh Case said construction will begin this year and Photosol plans to hire local whenever possible. He said there will be job fairs. The San Juan Solar Project will come online in June 2022.
Photosol’s San Juan Solar Project will be located near the San Juan Generating Station on private lands. Meanwhile, 8Minute Solar’s Rockmont Solar Project will be built predominantly on state trust lands north of Kirtland. Nelson said there are some parcels of private land that will also be part of the array.
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Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.
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