SANTA FE (KRQE) – Are you willing to pay more on your power bill to bring more business to the state?
That’s at the center of a debate about an economic incentive state lawmakers are looking at sending to Governor Susana Martinez’s desk.
Under that bill, PNM and El Paso Electric would be allowed to offer discounted electricity rates to lure companies looking to move to New Mexico or expand existing business in the state.
The proposal requires that companies looking to take advantage of the incentive meet several criteria. Those businesses would have to create at least 20 jobs paying at least $40,000, invest at least $5 million, use a certain amount of power and stay in the state for at least 10 years. The discounted power rates could only be offered a maximum of seven years.
There’s a catch. Those utility companies would be allowed to hike everyone else’s power bills to pay for the incentive. According to a PNM spokesperson, the additional cost to customers could range from as low as a quarter a year to as high as $36 a year depending on how many companies take advantage of the deal.
That caveat has rankled some Democrats like Sen. Joseph Cervantes, D-Las Cruces.
“We’re trying to attract businesses to New Mexico by offering a cut rate on electricity to large corporations that may come into the state but paying for it by having the rates increased on everybody else who’s consumers of electricity,” Cervantes said.
A House version sponsored by Rep. Moe Maestas, D-Albuquerque, got approved 47-17 earlier this week. The Senate version, sponsored by Senate Minority Leader Stuart Ingle, R-Portales, is waiting for a full Senate vote.
“We have to do what we have to do to get industry here,” Ingle said. “We need to get it passed so we can compete.”
Twenty nine other states currently offer discounted utility rates as an economic development incentive.
There’s additional pressure on lawmakers to approve the incentive before the session ends Thursday at noon.
Electric car company Tesla Motors is looking to build a $2 billion battery factory somewhere in North America. Global Equities Research analyst Trip Chowdhry believes New Mexico is a frontrunner to get the massive plant, which would bring with it thousands of jobs. Last year’s corporate tax deal and the power incentive have been discussed as possible sweeteners that could draw Tesla to the Land of Enchantment.
This isn’t the first time Tesla has flirted with New Mexico. In 2007, the company and Gov. Bill Richardson announced Albuquerque would be home to a new auto plant. But Tesla made a U-turn after California offered more incentives.
The company could make an announcement about where the battery factory will go during its quarterly conference call on Wednesday.