Eddy County moves forward with $40M bond sale for Chevron solar farm construction
Eddy County took the final step Tuesday in supporting the construction of a solar farm project benefitting Chevron USA operations south of Carlsbad with the issuance of $40 million in industrial revenue bonds.
Eddy County Board of County Commissioners declared Dec. 21, 2021 the intent to sell the industrial revenue bonds (IRB) for Hayhurst New Mexico Solar LLC to acquire, construct and equip a solar generating facility near Carlsbad.
Eddy County Manager Allen Davis said the bond sale was a culmination of work on the solar project for Chevron USA on New Mexico State Trust Land near Whites City Road and Roadrunner Road nearly 25 miles south of Carlsbad.
More:Chevron seeks $30M in Eddy County bonds for solar farm south of Carlsbad
“This would finance the industrial revenue bond for this particular project,” he said during a public hearing Tuesday before Commissioners.
Chevron won the right to lease 362 acres of land during a public auction in early 2022 and issued a sublease to Hayhurst Solar to construct 55,000 solar panels, according to a news release from the New Mexico State Land Office. Chevron USA and Algonquin Power and Utilities sought the IRBs to power Chevron’s Delaware Basin Electric Compressor Station.
The array, currently under construction, will generate nearly 26 megawatts of power and result in an estimated $7 million in revenue for New Mexico’s public schools, according to the news release.
The bond takes effect on June 1, 2023, and ends in 2052, according to Eddy County Commission documents.
IRBs offer incentives for municipal and county governments
More:Solar farm to power Chevron's oil and gas operations near Carlsbad to be complete by December
IRBs can be used to promote industry, manufacturing, industrial and commercial enterprises to locate or expand in New Mexico, according to a report issued to the New Mexico Legislature’s Revenue Stabilization and Tax Policy Committee in 2016 by the City of Albuquerque’s Economic Development Department.
“IRB is a loan from a bond purchaser to a company where the loan proceeds and repayment flow through a governmental issuer, and at the end of the lease, purchase the facility from the issuer for a nominal amount,” the 2016 reported stated.
City councils or county commissions must approve an IRB. No community or county in New Mexico lends credit to the IRB. A company must secure its own purchaser of an IRB or a company can purchase its own IRB, according to the report.
Eddy County had the authority to issue the $40 million IRB and Hayhurst New Mexico Solar Bond offered to purchase the bond at a private sale under terms of the agreement, according to an Eddy County Commission document.
Davis said construction could be complete by early 2023 and operations should start once the work is done.
More:Eddy County approves $40M in bonds for solar project near Carlsbad
Mike Smith can be reached at 575-628-5546 or by email at MSmith@currentargus.com or @ArgusMichae on Twitter.
This article originally appeared on Carlsbad Current-Argus: Eddy County approves $40M bond sale for Chevron solar project
