Los Lunas Village Council approves industrial revenue bonds for battery energy storage company

LOS LUNAS — The Los Lunas Village Council recently approved an ordinance authorizing the sale of industrial revenue bonds (IRBs) for the benefit of battery energy storage company esVolta.

Founded in 2018, the California-based company develops, owns and operates battery energy storage projects across North America. esVolta recently submitted an IRB application to the village regarding their proposed project in Los Lunas on a 22-acre parcel west of the Los Lunas Meta Data Center and adjacent to PNM’s substation.

“The purpose of the industrial revenue bond process is to grant gross receipts tax; in this case mostly compensating tax, and real and personal property tax abatements, to encourage companies to locate in or expand in the village,” said the village’s bond attorney Jill Sweeney.

The attorney emphasized that the village is not lending money or credit to the company, as this would just be giving the company an opportunity for tax relief, and the village would not be responsible for the payment of any debt associated with the project.

According to the ordinance, the bonds “are not to exceed $600 million providing that the bonds will be issued for the purpose of inducing (the company) to design, construct, acquire, equip and operate an up to 500 MW/2,000 MWh battery energy storage facility.”

At the Jan. 16 council meeting, esVolta project developer Collin Ramsey shared information about the project to the council. He explained their battery energy storage technology is a grid connected resource. In this case, the batteries would be connected to PNM’s grid to store excess energy for future use. Ramsey said the company currently has seven operating projects throughout the United States, mostly in the southwest in Texas, Arizona and California.

“It uses lithium ion rechargeable batteries, very similar to the batteries you would have in your mobile phones, laptops, things like that, just a whole lot more of them,” said Ramsey.

“There’s a bunch of energy being produced, but maybe not all of it is being used because there’s not as high of demand at that moment,” he said. “So what this project would do, along with other similar projects throughout the state, is we take that excess energy off the grid. It stores it in these rechargeable batteries, and it sits there, kind of like a generator, until it’s needed.”

Ramsey said this battery energy storage system increases not only the reliability of the grid, but the efficiency of the grid because excess energy is being stored rather than going to waste or being curtailed.

“It helps to integrate more of the energy that PNM is already paying for and generating through solar, wind, natural gas, and is able to make better use of it and make it more efficient for the ratepayer, “ Ramsey replied. “Once it’s up and running, there will be a few on-site employees throughout the week that will come and go, but the facilities are similar to a substation. They kind of take care of themselves.”

During the Feb. 27 council meeting, a constituent voiced concern about what money the village would be losing out on through the IRB tax abatement process for companies.

“There are trade-offs, but the employment, the gross receipts of construction, the payment in lieu of taxes, I think, is more than worth it,” Griego said. “With this project, I have my questions about it, but the stability of our local electrical grid is important, and I think it’s important that we have that backup source.”

It was noted that the project is contingent on an award from PNM. Ramsey said the company will be submitting bids to PNM around May, and having the IRBs will make their proposal more competitive.

“We really like the location,” Ramsey told the council. “There’s a brand new substation and there’s already energy infrastructure there with the transmission line, so based on that I really do like our chances.”

Ramsey said he anticipates they will know if they have secured an award from PNM likely by the end of the year, and, if all goes well, they aim to go operational in 2028.

The council then unanimously voted in favor of approving the IRB ordinance, with a closing date on or around April 1.