Sky Ranch Solar begins producing energy at solar farm

BELEN — A new solar farm on the far north side of the city of Belen is now turning photons into electrons.

Sky Ranch Solar Energy Center — a 1,600-acre solar farm, with a 190-megawatt solar array and 50-megawatt, four-hour battery energy storage system — was officially commissioned and began producing energy on Thursday, May 23.

“We are incredibly proud of this facility. It has three decades of useful life providing affordable, reliable energy to PNM customers,” said JD Rulien, the project director for NextEra Energy Resources, LLC, which owns Sky Ranch Solar, the owner and operator of the facility.

Rulien said during construction of the center, which began in early 2022, more than 100 jobs were brought to Valencia County.

The array is at the northern end of the master planned Rancho Cielo area of Belen, west of Interstate 25 and south of El Cerro de Los Lunas.

N.M. Rep. Gail Armstrong (R-49) called the project “the beginning of really helping move Valencia County forward. This is the next step. This is just one piece of the picture of moving Valencia County forward. In my opinion, this is the kind of project we need in New Mexico. I will also say, let’s do all energy and do it all responsibly.”

The power generated from the solar facility will be transferred to PNM’s power grid, and according to a 2021 PRC approved proposal between PNM and Greater Kudu, a subsidiary of Facebook, will provide energy to the Meta data center in the village of Los Lunas.

In the summer of 2021, shortly after the city began negotiating with NextEra for tax breaks via IRBs, the New Mexico Public Regulation Commission told PNM and the company that will be the sole beneficiary of the power to work out a new agreement. The PRC turned down a power storage proposal between PNM and Greater Kudu, saying the proposal was too complicated and it seemed intentionally deceptive.

The agreement was eventually renegotiated, letting the power generated at Sky Ranch be used exclusively by the Meta data center in Los Lunas.

Sky Ranch is expected to generate about $18 million in additional tax revenue during the first 25 years of the project, and represents a potential $280 million capital investment in the same time period, according to a fact sheet provided by NextEra Energy Resources during the commissioning event.

Those revenues will come from the payments in lieu of property taxes agreed to by Sky Ranch as part of the agreement for industrial revenue bonds issued for the project in 2021. The IRBs issued provide property tax breaks for the company on the equipment and any property that is part of the facility, as well as gross receipts and compensating tax breaks on tangible personal property.

In the fall of 2021, the Belen City Council approved two industrial revenue bonds totaling $271 million — one worth $180 million to acquire solar energy generating equipment and facilities, and the other, worth $91 million, to acquire solar energy storage equipment and facilities — for Sky Ranch Solar.

Gabe Henehan, director of development with NextEra Energy, told the council at that time the company will pay the city and the Belen Consolidated Schools millions of dollars over the next 30 years in lieu of taxes.

According to Henehan, the company would pay a total of $530,000 a year to the city of Belen and Belen Consolidated Schools in lieu of property taxes, with the city getting $390,000 every year, and the school district receiving $153,000 a year.

Municipalities issue IRBs to assist a company that might otherwise be unable to obtain financing for its industrial venture or is unwilling to undertake the project on its own. The proceeds from the bond are used to fund the acquisition, construction/reconstruction, expansion or improvement of property that qualifies as a manufacturing facility or equipment.

While the city would be the issuer of the bonds and intermediary, none of the city’s money can be used for the project assets or the debt of the bond. The city’s role is just to provide the tax break to Sky Ranch Solar Energy Center.

At the June 3 council meeting, a second round of IRBs up to $130 million for a battery storage facility at the energy center was discussed. According to the draft ordinance, Sky Ranch will again make payments in lieu of taxes, but an exact amount wasn’t included in the draft.

The ordinance will go before the council for public hearing and consideration on Monday, June 17.