When Tesla Motors selected a site near Reno, Nevada for its so-called “gigafactory” a few weeks ago, Nevada felt like it had it the jackpot. Other states under consideration, including New Mexico, Arizona, and especially California, felt they’d missed an opportunity. This was specifically the case in Southern California, where lawmakers were courting the company to locate their $5 billion, 6,500-job lithium-ion battery factory near the Salton Sea in an arid region east of Los Angeles. The site is part of California’s 36th Congressional District, which extends east from Riverside County toward the Arizona border and includes Palm Springs, Palm Desert and other communities of the state’s Inland Empire.
With first-term incumbent Democrat, Rep. Raul Ruiz, and his Republican opponent, California Assemblyman Brian Nestande, caught in a close race heading into November’s election, the Tesla plant has become a hot-button issue. In August, Rep. Ruiz wrote a letter to Tesla CEO Elon Musk touting the benefits of locating the factory in the district. In the letter he wrote that “no other region in the country offers you the opportunity to produce batteries for the cars of the future with so much renewable energy potential.”
When the news broke that the factory would land in Nevada, both candidates wrote op-eds for the local Desert Sun newspaper expressing dismay and placing blame. Rep. Ruiz attributed the loss to the state legislature’s failure to act to ensure the proper incentives, especially relating to a bill to catalyze geothermal energy in the area that passed the state Senate easily but failed to garner enough support to make it through the Assembly. Nestande had indicated he would vote against the bill due to concern over elevated energy costs.
To persuade Tesla to come to them, Nevada went all-in with a big financial package including tax credits and other incentives worth up to $1.3 billion. As part of four bills that all passed the legislature unanimously, Tesla will pay no property taxes or payroll taxes for up to 10 years and no local sales or use taxes for up to 20 years. This effort received some pushback for being overly generous and an unreasonable gamble on an electric car industry yet to prove itself. The factory is being billed as a way to greatly reduce production costs and make electric cars more affordable to regular consumers with a $35,000 price tag.
In his response to Raul’s op-ed, Nestande also takes issue with California’s lawmakers, except he blames them for enacting a cap-and-trade “regulatory burden.” He says this policy was supposed to “cure global warming” but has instead “helped us earn the dubious distinction of consistently being one of the worst states to do business.”
Nestande said he supported the Tesla factory for the same reasons he supports the Keystone XL pipeline: it’s a pro-growth job creator. He calls Ruiz a “Liberal Democrat ideologue” who wants to make cap-and-trade a federal law and spread “the California job killer to the rest of America.”
The Republican challenger continued that “ironically” California-based Tesla benefited financially from cap-and-trade by getting state subsidies for being a clean energy company, but with the battery plant “they ran into the problem of being a loser because of environmental regulations.”
However one of the main reasons Tesla was considering the southern California site in the first place was because of its abundant solar, wind, and geothermal energy supplies. At the Nevada site, the company intends to generate more renewable energy than it uses. While this is an ambitious agenda, a recent report found that more than half of Fortune 100 companies collectively saved more than $1.1 billion annually by reducing carbon emissions and rolling out renewable energy projects over the past year.
As an assemblyman, Nestande has voted “nay” on a number of environmentally oriented bills, including a bill that would’ve mitigated the coastal costs of climate change, one to set an ambitious renewable energy target, and a bill that opposed the expansion of offshore oil and gas drilling.
Losing the Gigafactory was a missed opportunity for California, but the failure of the geothermal bill, which would have required utilities to buy 500 megawatts of electricity from new geothermal plants within 10 years, is also a major disappointment for the state. According to the Desert Sun, it could “prove even more costly for the the Imperial and Coachella valleys” as “it’s likely that developers would have jumped to take advantage of the sea’s huge untapped energy potential.”
Neither Rep. Ruiz nor Assemblyman Nestande responded to emails requesting comment.