By Mary Alice Murphy

At the Gila Economic Development Alliance Roundtable meeting on Oct. 23, 2015, Marcela Shelby of the New Mexico Community Development Loan Fund, better known as The Loan Fund, spoke first.

"We provide technical assistance to people in Southwest New Mexico," Shelby said. She has been on the job since June in Las Cruces, but the organization has been headquartered in Albuquerque since 1989.

"The pilot idea was to work directly with clients to help them in their business development," Shelby said. "We want to make sure they are thriving, growing and expanding in their business. We tailor loans to fit businesses or non-profit organizations."

She said a loan could range from $5,000 to $700,000. "We are considered an alternative lender for those who haven't been able to get traditional bank funding."

"Lines of credit are a great option," Shelby said. "Our goal is if you know frustrated entrepreneurs, refer them to us. We have a referral system on our website or I can come to you."

Sean Ormand of 1st New Mexico Bank and a Gila EDA member, asked where The Loan Fund's funding sources come from

"We have private funding, partners, and from some banks," Shelby replied. "We also have revolving loan funds from the Small Business Administration and the U.S. Department of Agriculture. We have low-interest loan funds that we loan out of."

Bruce Ashburn, PNM, said he serves on several non-profit organization boards. "I've never met a non-profit that has enough money. They can pay back loans. Do you require an officer to sign for the loan? Do you accept collateral? Do you require an individual to sign or the organization?"

"I'm not totally sure," Shelby said. "But I know we take collateral and I know a contact person is needed. Our interest rates start at 7 percent and go up to 10 percent or 11 percent. We fund those who likely could not get funding from a traditional lender. We're sad to see them go, but happy for them when they can get funding from a traditional lender."

Jane Janson, Small Business Development Center director, asked if The Loan Fund would fund brand-new businesses.

"We can," Shelby said, "but only about 20 percent and if the loan is less than $50,000. We make sure they have collateral and a strong credit history outside of their business.

"I'm glad to come to Silver City when I can," she continued. "I teach at the Community College in Las Cruces, so I have the bookends of the week free. I am available for clients or events."

Her email address is marcela@loanfund.org.

"The applications for loans are online," Shelby said.

Janson asked if they refer people to credit repair agencies.

"We haven't," Shelby said. "The thought is more that we will work with them rather than to send them to an agency like that."

Gila EDA board president Jeremiah Garcia asked what the relationship with the SBDC is.

"In Las Cruces and other areas, we try to work hand-in-hand with the SBDCs," Shelby said. If we get a referral, we have the technical capability to help with a business plan, but we prefer to refer them to the SBDC, WESSTCorp or the Arrowhead Center at New Mexico State University. We're open to building partnerships."

The next speaker was PNM Senior Vice President of Public Policy Ron Darnell.

"The issue at San Juan Generating Station started several years ago, on regional haze regulations with the Environmental Protection Agency," Darnell said. "The cornerstone of the plan was to retire two of the plants to reduce NOX or nitrogen oxide. The plan was approved by the EPA, but a number of agreements had to be agreed to with the nine owners of the station. It was very much like a divorce—not everyone wanted the kids. Five of the owners left and four stayed. The challenge was we had agreed with the EPA to put on pollution controls, but we couldn't get all the signatures on the plan. We had to abandon two plants. PNM took ownership of 132 megawatts of power.

"The hearing examiner rendered a decision with which it was not possible for us to comply," Darnell said. "When we were here in May, we were facing dire consequences for the Four Corners area and a costly proposition for the company. The Public Regulation Commission gave us to August 1 to get the agreements done. They came down hard on us but that helped us get the other owners on board. We were challenged by the Attorney General to come back with broader support, specifically from the environmental community. We went back to the negotiating table. Western Resource Advocates and the Coalition for Clean and Affordable Energy came on board. Another meeting is being held today, and we are coming close. If we get a positive decision, we will have a new coal contract on Jan. 1 and you will see a reduction in your bills. If we don't have a positive decision, it's back to the drawing board. We were still operating under the old coal contracts. With the new coal contract, we will see five times the benefits. If we closed the whole plant, your bills would cost five times more. Retiring the two plants, cuts the carbon emissions in half."

Robert Morales, audience member, asked what happened with the agreement.

"Farmington decided it didn't want to take as much power from the San Juan Generating Station, and so we lost the environmental support," Darnell said. "The PRC encouraged us to get more environmental support."

"So basically the environmentalists said if you buy more renewable energy certificates, they would support it?" Morales asked.

Darnell said the hearing started the prior Tuesday, "but we always had the agreement to retire the two units. PNM had agreed to buy a portion of Unit 4, when Farmington pulled out. We would like to see coal retired sooner than later. In 2018, we will file two plans. If we keep the two units running after 2022, in the first plan we will determine how much gas-fired peaking and how much renewable we will use. The second plan is if we retire the final two units, and will be a combination of renewable energy and gas-fired."

Morales asked if anything would be grandfathered in.

"If we wanted to grandfather something in, we would have to renegotiate in 2022," Darnell said. "The idea is to come to the PRC in 2018, with all issues addressed. The environmental issues I think we have solved. We invested hundreds of millions of dollars to take care of pollution. We buy coal from Westmoreland, which has significant resources, and it will have to compete with natural gas. The federal government encouraged the development of coal-fired plants, because they are located right next to the mine. If we can continue to mine coal responsibly, we prefer the option."

Ormand said closing down the mine would impact a considerable number of workers.

"Hundreds," Darnell said. "Without a railroad nearby, it's hard to ship the coal. Each unit has its own coal mine. The Navajos have power-generating plants with their mines."

Trent Bohl of Lawley Toyota and Smokey Joe's asked why no one has looked at hemp biofuel, which is used in Canada.

"I have nothing to do with the running of the plants," Darnell said. "Our chief operations officer looks at alternatives. I'll mention it to him."

Bohl noted that hemp offsets burning coal.

Garcia asked about the Palo Verde nuclear power station.

"There are three units, named Palo Verde 1, 2, and 3," Darnell said. "No. 3 has never been allowed to go into service. To provide reliability to PNM customers, we are bringing in energy from No. 3 to fill capacity lost from the two retiring units. Nuclear is emissions-free."

Linda Brake of Bridge Community asked about incorporating solar.

Ashburn said PNM has a plant near Deming. The company will own, as of the end of the year, 1 million solar panels. "They are included in the rate case."

"There are a lot of moving pieces to customer bills," Darnell said. "The rate case relative to coal does reduce the impact of the rate increase. In the bills, we have collection of costs from several years ago, spread out for the remediation of a mine fire. Regulators felt the spreading out of costs should expire at the end of 2015. Your bill will drop, and the coal contract will be felt in the first quarter. Overall, the rate case asks for a 16 percent increase. The fuel cost is dropping, but the increase is necessary to recover about $600 million in costs incurred by the company that have not been covered since the last increase. Even if it's 16 percent, that's a bit over 3 percent a year for five years. But there is no way to make rate increases happen more gradually, because of the long process to get an increase. The value is already there."

Darnell said the increases are tied to reliability with the gas-peaking plant needed to offset the intermittent solar production. "We are beefing up the distribution system. It gets old and has to be replaced. Residential customers are using more refrigerated air than evaporative coolers. So needed peaking capacity is growing to meet summer air-conditioning needs. We will file for using smart meters, so if you want to use more power at peak times, you will pay a higher price."

"If certain areas don't use as much, are they not penalized for using less?" Morales asked.

Darnell explained that the company looks at usage as one system. "If you live in a moderate climate, you will use less and your bills will be lower. The system is more efficient where the population is denser. But the same infrastructure is needed for rural areas. If we disaggregate the system, there would be higher costs for rural users. With smart meters, we can make it fair to all."

Amy Miller of the PNM Albuquerque office said the company does have summer rates, so "if you are running refrigerated air more, you will pay more."

"When we poll customers," Darnell said. "The number one thing they want is reliability."

Dave Thomas of Western New Mexico Telephone Company said his company, too, is regulated by the PRC. "We know the rate of return. A 16 percent rate increase is high, but the actual rate of return is not rising."

Darnell said everything to customers is at cost, except for certain pieces, which are paid for by investors. "We are asking for a 10 percent rate of return, but we are not guaranteed that rate of return with the 16 percent increase, especially for customers in the southern part of the state. When PNM bought Texas-New Mexico Power, Deming was already on PNM and paid different rates. All that rolls off with this increase, so that the increase will be better for Silver City than for Deming. In Silver City, the average increase will be 4 cents a day. We have kept operating and maintenance expenses flat, although they have risen as much as 20 percent in other areas over the five years. We're proud of this case, because we have managed costs. We like to promote energy efficiency. One of the drivers of the case is that our sales are down. For instance, when you replace an incandescent bulb with a more efficient one, you save 80 percent to 85 percent of watts.

"We have an electrical development rate, which can help bring in new businesses," Darnell continued. "We offer $320,000 a year in bill assistance. Our intent is to keep these programs going."

Garcia asked what the incentives were to recruit new businesses.

"The economic development rate is short-term for five years, with the option to renew for another five years," Darnell said. "It's just as important to keep rates as low as possible for commercial and industrial customers. That is the reason residential customers are being hit harder. The average residential bill in New Mexico has a usage of 600 kilowatt-hours a month. In Texas, it's 1,500. I would rather pay a little bit more in New Mexico to live in a viable economy."

Participants in the Roundtable then gave announcements.

Kevin Cook of Freeport-McMoRan Copper and Gold Inc. said the company foundation's Community Investment Fund application deadline is Dec. 1. "We held mandatory guidance sessions for those wanting to apply. We had 80 people attend, representing 70-some organizations."

Emily Schilling of the Southwest New Mexico Council of Governments said the COG is working on a community investment grant for Hurley streets. "We are also working on a federal Promise Zone application. We are partnering with the Office of Sustainability, The Wellness Coalition, and the Southwest Energy and Green Jobs Task Force to help do energy audits with a grant of $250,000. "

Connie Glenn of Workforce Connections said the office is busy, getting workers who may be laid off from Freeport in the system. "We have one gentleman, who thinks he's on the list to be laid off. He wants to start a new business. We are using all our partnerships to get people back on their feet."

Arlene Schadel of the Gila EDA announced Theater Group New Mexico's performance on Saturday, Oct. 24. "We will hold auditions for 'Christmas in the Land of Oz' on Friday, Saturday and Sunday, Oct. 30 and 31, and Nov. 1. We will later hold auditions for 'West Side Story' for a spring performance."

Thomas said Western Telephone has built four miles of fiber optic and put eight businesses on fiber. "We provide an alternative to CenturyLink. We have aggressive plans in Silver City."

Scott Terry, Silver City-Grant County Chamber of Commerce director, said he would not be holding a ribbon cutting at Dollar Tree, because it is not supporting the chamber. "If you want support from the local chamber, you should support the local chamber. PNM does support the chamber. Nov. 19, we will have a community awards banquet. PNM is the corporate sponsor for the event. It will be held at the Western New Mexico University cafeteria. In the past three weeks, we have sent out 278 tourism packets, with 3.4 pounds each of information. They are good referrals from about 45 different states and five different countries coming to the website and requesting the information."

Glenn said she appreciated Terry's columns in the Daily Press and the Beat.

Terry also noted that if New Mexico doesn't get its act together on driver's licenses, everyone in the state would have to get a passport to fly from Albuquerque to Dallas. "There are 17 other states with the same problem. I think people should do what is right."

County Commissioner Ron Hall said in November, the commissioners will make a decision on which redistricting map for five commissioners—A, B, or C—it will choose. "Give us input. We are starting work on the Conference Center. It's huge. We're also excited about the Substance Abuse Treatment Center. The RFP for an operator is out. The application is being worked on, so we can get architectural and provider input. We hope to open the facility the first quarter of 2017."

Terry said he met with some people with hotels in Texas, for whom one of the big selling points was the conference center being able to host regional conferences.

Joseph Jensen of LifeQuest said for use of the Disabilities Resource Center, people should call LifeQuest to reserve it. "We partner with Western on the robot we have for the disabled. And LifeQuest is bringing back sales of Christmas trees this year."

Garcia asked about LifeQuest's landscaping team.

"That program is fully staffed," Jensen said. "We purchased a small tractor and a truck. We have been hiring for crews. We charge $65 an hour for the several-member crew. We also have a wood shop running, which makes stakes for the mines. Evangeline Zamora is now consulting for LifeQuest and the new chief executive officer is Debra Frasca, who has been with us for many years."

Garcia asked how many clients LifeQuest serves. Jensen said about 40 in the adult program and 140 children in the birth to three years program. The adult program is a Medicaid waiver programs. "It's a choice for service. There are competitors."

Cook said Freeport has rolled out an Internet-based program for women. The educational program is free at www.dreambuilder.org . "It was rolled out in 2012 in South America. Solopreneurs can take advantage of it to start a business."

With the holidays, Gila EDA plans no meetings until after the first of 2016.