Corporate Welfare

    By Ramona Goolsby

Nov 17, 2023

I have been attending the Bernalillo County Commission meeting for well over a year now and things seem to be moving in the wrong direction. The Bernalillo County Commission and the City of Albuquerque are precariously sitting on a financial slope that the people may have a hard time recovering from. 

The financial slope I am referring to is the issuance of Industrial Revenue Bonds (IRBs) for almost $2.5 billion (with a B) dollars for corporations that are part of a sector that only survives because of government subsidies. These two corporations are Maxeon Technologies Inc. and Array Technologies. 

Industrial Revenue Bonds (IRBs) are a tool used by governments “to assist a company that might otherwise be unable to obtain financing for its industrial venture or unwilling to undertake the project on its own.” The bonds are issued by the government on behalf of the company to finance the project. The company then reimburses the issuer (the governmental entity issuing the bond) for the interest and principal from its revenue. There are many stipulations that can be added to the bond agreement. These types of projects are generally for development that benefits all of the people such as schools, hospitals, roads, water projects, etc. 

Maxeon Technologies Inc. is a Taiwan-based solar panel manufacturer. The City of Albuquerque is planning on issuing $2.4 billion dollars in IRBs to support. They are also expected to benefit from Local Economic Development Act (LEDA) grants from the state, Bernalillo County, and the city of Albuquerque for a staggering total of approximately $2.5 billion in funding.

The other corporation is at least Albuquerque-based. It was deceptive for the Bernalillo County Commissioners to list the proposed recipient of the $49,000,000 million IRB as the “Sunflower Project and BernCo. Investors”. They never mention the true recipients of the funding, Array Technologies, in the resolution. 

It has been reported that Maxeon Technologies Inc. stocks recently dropped precipitately, based on badly missed revenue expectations. They are building increased production in a fragile sector, and they very conceivably may not be able to maintain the expected financial returns in the current market according to Mick Rich in a Pinion Post opinion. Maintaining financial returns is how they are supposed to repay the bonds. 

Array Technologies Inc. is on the NYSE and is currently trading at 14.545 USD down -20.17% YTD. Notice it is down -20.17% YTD. There have been supply chain issues, a continued downturn in the economy, and an increase in interest rates that will not change in the foreseeable future. How will they repay the bonds? 

Headlines in the past few weeks have included “Green Energy Stocks Have Dropped as Rates Climbed”, “Albuquerque branch on ADT Solar’s Closure List”, “Siemens Energy Shares Crash 37% As Renewable Bust Sparks ‘Green Panic’, “Lights Out: Solar Power Stocks Crash After Demand Warning Across Europe”, etc. It is reported that investors have pulled over $280 billion (with a B) from “green stocks” globally since their August 2022 peak according to Bloomberg. 

It appears that the government in New Mexico is stepping out on a limb to support an industry that has been unable to support itself since the beginning of its modern existence. Solar panels and farms only produce at approximately 75% efficiency, require a lot of maintenance, only last 20 years, and then they are toxic waste. 

The New Mexico Government should consider other green energy sectors such as geothermal or small modular reactors (SMRs) if they are insistent on subsidizing a sector of the green energy industry. 

Ramona Goolsby is a retired small business owner concerned with the increasing governmental financial support for large corporations that do not benefit the population as a whole.