Stellar Solar IRB process initiated
Christina Holt
News-Sun
TATUM — Plans to build a large solar farm in northern Lea County have moved one step closer to reality.
Stellar Renewable Power from, headquartered in Dallas, plans to build a $1.18 billion solar energy facility near Tatum with the assistance of two Industrial Revenue Bonds that would be issued by Lea County.
Stellar representatives presented its 500-megawatt solar and 500-megawatt battery storage facility to Lea County Commissioners at its regularly scheduled meeting on Feb. 27 in the hopes of securing the IRB’s.
On April 10, Lea County Commissioners voted to issue the two IRB’s for the solar project.
The first IRB is specifically for Gainer Solar, LLC for a maximum $672 million and the second is for Stellar Gainer Bess, LLC, topping out at $505 million. Bess is an acronym for battery energy storage system that will be located at the site.
The IRB’s would be issued by the county to raise capital to help fund the development of the Stellar solar facility and it may receive certain tax exemption benefits.
“An IRB doesn’t have any public funding, investment, debt or loan tied to it. It’s simply a way of putting the property in Lea County’s name for property tax reasons and for gross receipts taxes on equipment during the construction phase of the project,” Lea County Manager Corey Needham said. “It is one of the most used economic development tools to promote and bring businesses into an area.”
Passing those resolutions is the first step of many in the process of issuing the IRB’s.
“It’s not any sort of final commitment from either entity,” Needham said. “It does allow us to start working between Stellar and Lea County in good faith.”
Part of the IRB agreement could include a payment in lieu taxes which then could be distributed to school districts throughout Lea County.
“Lea County could see a potential revenue increase through the (payment in lieu of taxes),” Needham said. “All school districts in Lea County in varying amounts could see a revenue increase. It’s in the Nor-Lea Hospital District and the New Mexico Junior College district and both could also see an increase in revenues.”
The next steps involved with the issuance of the IRB’s in connection with the Stellar Solar project include:
• Meetings with the taxing jurisdictions;
• Negotiation of the payment in lieu of taxes;
• Preparation of the IRB ordinances;
• Discussion of the IRB ordinances at a future commission meeting;
• Notice of the ordinance consideration sent to taxing jurisdictions;
• Authorization of publication of the IRB ordinances;
• Public hearing and consideration of adopting the ordinances at a future commission meeting;
• Bond closing;
• Construction.
Stellar has entered into a lease agreement with landowner Mark Gainer for 3,630 acres of undeveloped ranch land for the life of the solar project of 35 years.
“I’ve worked with Stellar going on three years and they’ve done everything they said they were going to do,” Gainer told commissioners. “I think they would be a great asset to Lea County.”
It was Stellar’s plan to secure the IRB’s with the county prior to obtaining a power purchase agreement to make the price per megawatt per hour more competitive.
“We believe an IRB would provide us the most competitive price for the power purchase agreement which would ultimately help get the project built,” Stellar Senior Associate Sully
Ford told commissioners on Feb. 27. “We would love to be long term partner with the county as well as help bolster and provide taxable revenue with this project.”
The plan is for the Stellar solar facility to interconnect into Southwest Power Pool’s current electrical transmission project.
SPP awarded NextEra Energy Transmission Southwest the Crossroads – Hobbs – Roadrunner 345-kilovolt Competitive Upgrade project which begins in Roosevelt County and ends in southern Lea County.
The project will deliver lower-cost generation to the region and enhance the reliability of the electric grid by building an approximately 135-mile double-circuit 345-kilovolt transmission line, according to NextEra.
The NextEra will finance, construct, own, operate and maintain the project, which is expected to be completed in May of 2026.
Stellar is in the process of completing the requirements with SPP in order to obtain an interconnection agreement.
“The transmission line is expected to be in service by 2026, then our project line coming in service several years after that in 2029,” Stellar Senior Manager Liam Gildea told commissioners on Feb. 27.
Ford said it could potentially take 250 – 300 jobs during the construction phase over the course of about two years and 40 full time jobs would be needed to operate the facility.
District 1 Lea County Commissioner Dee Ann Kimbro had concerns about the water usage during the construction phase and the lifetime of the facility as well as remediation of the land.
“We’ve reached out to the state engineer and are working on water procurement,” Ford said. “We will potentially have to look elsewhere for water as the land owner does not have adequate amount of water for the construction period. The two-year construction period would require an estimated 800-900-acre feed and somewhere between 5-10 each year for panel cleaning and maintenance.”
Gildea said, “One of our obligations in the lease with the landowner is the reclamation of his property. Also, there are requirements in the power purchase agreement related to the same thing. We are happy to work with county staff as it relates to decommissioning and reclamation.”
