News Release

Jan. 9, 2002

Lordsburg City Council Supports Bonds for New Power Plant

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Lordsburg: The Lordsburg City Council has agreed to support the issue of $60 million in industrial revenue bonds to PNM for the construction of a new 80-megawatt natural gas-fired generating station. The council voted unanimously on bonds during its Jan. 8 meeting.

Construction for the new plant in the city limits of Lordsburg is expected to begin once PNM receives an air quality permit from the New Mexico Environment Department. An application is pending and a permit could be issued later this month.

The new Lordsburg plant is expected to provide power by July 2002 and will produce enough electricity to power 80,000 homes.

"The new PNM plant is great for the community in terms of the jobs, and it's great for the local business community in terms of the continuous revenues a power plant creates," said Lordsburg Mayor Clark Smith. "And, it keeps money in the state of New Mexico. There are positive benefits for the city, the county and the state."

PNM, the state's largest gas and electric utility, plans to build the 80-megawatt power plant at a site formerly owned by Texas-New Mexico Power Company. The new plant is the second of two PNM has announced in the past two months. In November, officials broke ground on the Afton Generating Station just outside of Las Cruces. The Afton plant will add 135 megawatts to PNM's generation portfolio, as the company works to double its 1,650-megawatt generation capacity.

"The construction of this plant will help to provide additional power during peak electricity use and improve the reliability of the regional power transmission network," said PNM Chairman, President and CEO Jeff Sterba. "This plant, in addition to our new Afton Generating Station outside of Las Cruces, will help ensure that a reliable power supply exists for southern New Mexico and the western market."

The bonds will be issued under an ordinance adopted by the City in the next approximately 60 days. Issuance of the industrial revenue bonds will allow PNM to forego payment of property taxes for the life of the bonds issued. In lieu of taxes, PNM will pay the City of Lordsburg $75,000 a year for 30 years.

Even with the approved revenue bonds, the new station will have a significant and lasting economic impact on the State of New Mexico, the City of Lordsburg and Hidalgo County. According to an economic impact study by noted New Mexico economist Dr. M. Brian McDonald, PNM will pay an estimated net total of approximately $19.4 million in state and local taxes for plant construction and operation between 2002 and 2011. The power plant is expected to run 30 to 40 years and would continue to generate tax benefits during that time.

Specifically, over the next 10 years, Hidalgo County is expected to experience a positive fiscal impact, from increased tax revenues, of a total of $803,000 and the City of Lordsburg should experience a total positive fiscal impact of $5.3 million. The Hidalgo County school district is estimated to receive a total of $36,000 available for capital expenditures or debt service, and the State of New Mexico should receive a total positive fiscal impact, from increased tax revenues, of $12.4 million. 

Construction of the power plant will create about 120 construction jobs at the project's peak and generate about $2.4 million in local wages in Hidalgo County for six months. Four to six fulltime, permanent workers will operate the plant. The annual salary for each worker is estimated at $50,000.

Natural gas for the plant will be supplied by regional El Paso Natural Gas lines and will primarily come from New Mexico. The plant will connect to a 115-kilovolt line owned by Texas-New Mexico Power. PNM is constructing new switching station facilities at the site to tie into the system. The plant will be designed to accommodate potential future expansion depending on market conditions.