Sometimes, New Mexico can’t help but snatch defeat from the jaws of victory.
Three years ago, New Mexico won a national competition to bring Facebook to our state. Facebook agreed to build its new data center in Los Lunas, and in exchange, New Mexico promised the company that the state would upgrade its electric grid to power the complex with 100 percent renewable energy.
The agreement was a victory for everyone involved, especially New Mexico. Facebook would get the best deal possible for its new data center and invest $1 billion in the project. New Mexico would gain millions in tax revenue from the economic activity spun-off from the data center. And everyone would benefit from upgraded transmission infrastructure that would bring more renewable energy online.
Facebook delivered on its side of the deal and more. In 2017, it announced it was tripling the size of the complex, creating hundreds of long-term jobs for New Mexicans and spurring an economic boom in Valencia County.
But being New Mexico, state regulators couldn’t let a good thing go untouched. Last week, the New Mexico Public Regulation Commission voted 5-0 to force Facebook to pay half the costs for a transmission line to its new data center in Los Lunas. These costs were not part of Facebook’s original agreement with the state to build the facility. The future of the entire project is now in jeopardy thanks to the PRC’s “gotcha” decision.
Within days of the PRC’s action, many national news organizations, including The New York Times, ran headlines declaring, “New Mexico Panel Blindsides Facebook with $39M Utility Bill.”
While I am hopeful that the parties involved will eventually resolve this dispute, it will be too late to take back the negative headlines. The damage is done. Companies and investors across the country have now been warned: New Mexico writes its contracts with erasable ink.
Of course, the blame game began well in advance of the PRC’s vote. Both the PRC and the state’s largest utility company, PNM, pointed fingers at each other. The reality is that the PRC and PNM have long maintained an adversarial relationship, and now Facebook is caught in the crossfire.
Regardless of the who-what-when-and-whys of this decision, the ugliness of the ongoing feud between the PRC and PNM has unavoidably compromised New Mexico’s future ability to attract more big projects to the state. What business will want to make a deal with state negotiators knowing that they could be sent a surprise $39 million bill afterward?
If New Mexico is to realize its vision of creating a vibrant economy and good opportunities for our workers, we must rise above these petty squabbles about regulatory technicalities and focus on our larger goals.
Do we want to be a player in the information economy? Do we want to be a leader in increasing renewable energy use? Do we want to create new careers for us and our children?
If the answer is yes, then let’s work together to make it happen. But we’ll never achieve our dreams if we keep repeating the same self-sabotaging actions that have kept us in the economic cellar for decades.
When Facebook announced it was tripling the size of its data center, a local carpenter who had been unemployed for six months before being hired to work on the Facebook project said, “Facebook has been my oasis in the desert. I was questioning my future in New Mexico.”
Now it’s Facebook’s turn to question its future in New Mexico. The PRC’s inflexible attitude in this case misses the forest for the trees. The reputational damage from its action is now part of our state’s brand. This is why New Mexico can’t have nice things.