ALBUQUERQUE, N.M. (AP) — New Mexico lawmakers are considering a set of proposed tax incentives aimed at enticing the developers of the $1.5 billion Tres Amigas SuperStation to locate their headquarters and an associated trading exchange in the state.
The Tres Amigas project, first announced in 2009, includes building a hub across 22 square miles of rangeland in eastern New Mexico to link the nation’s three major electrical grids.
Construction is set to begin this summer, but Tres Amigas president and CEO Phillip Harris said New Mexico’s tax structure is forcing the company to consider other locations in Texas for its headquarters and the exchange.
Harris has called New Mexico’s higher taxes a potential “deal-killer” for the state.
To keep Tres Amigas in the state, Democratic House Speaker Ben Lujan is sponsoring legislation that would offer a gross receipts tax deduction for the trading operation and an exemption of certain taxes related to the conversion and transmission of electricity.
The bill cleared its first committee Thursday. It’s now headed to a House taxation and revenue panel.
Regis Pecos, a top staffer in Lujan’s office, said the clock is ticking since Tres Amigas plans to decide in March where to locate its planned trading floor and headquarters.
“Given the timeline, we cannot afford not to take the appropriate action that would leave the door open to be able to land something of this magnitude,” he said. “The opportunity can’t be underestimated.”
At stake are jobs and spin-off businesses that are likely to open if both the hub and power exchange are in New Mexico.
The exchange would allow for the buying, selling and trading of power across all three U.S. interconnections and potentially beyond. Harris has said there is international interest in the hub and the development of a trading system that could work seamlessly in a global market.
Supporters ranging from rural electric cooperatives and trade unions to economic development officials from Albuquerque and Rio Rancho turned out Thursday to back the legislation.
The measure is being considered at a time when Republican Gov. Susana Martinez is trying to revamp tax codes to ensure the state can attract new businesses and keep existing ones from leaving.
On Wednesday, the governor reiterated that New Mexico’s reputation in national circles falls near the bottom when it comes to competitiveness. She blamed that partly on the state’s “unfair” tax policies.
“It’s critical that we level the playing field between New Mexico and surrounding states so that we can attract businesses to our state, allow for our small businesses to grow and create more jobs,” Martinez spokesman Scott Darnell said. “When we compete, we can grow and we can create jobs.”
Terri Cole, president and CEO of the Greater Albuquerque Chamber of Commerce, said the business group is studying the tax proposal. She said it’s always prudent to think things through whenever considering gross receipt tax exemptions or deductions.
However, Cole said business leaders are usually supportive when opportunities can be created that allow for more jobs and increases in the private sector.
Pecos said Lujan and other lawmakers understand that Tres Amigas represents one of the largest energy investments in New Mexico. The project would also open the door for the development of more renewable energy in the state that could be exported through the grid connection, he said.
“This would just simply be another very profoundly significant contribution to this larger picture of putting New Mexico in a situation where it can take advantage of multiple opportunities,” he said.