Taxpayer-funded solar energy project in Ivanpah Valley — one cozy with Harry and Barry — is filled with financial landmines

If you thought Solyndra’s half a billion dollar loan guarantee from the Energy Department was risky business, wait till you read about the $1.6 billion DOE loan guarantee for a thermal solar project just across the border in California.

The 392-megawatt Ivanpah Solar Electric Generating System, or Ivanpah, is being built by BrightSource Energy. The principal private investor in the firm is VantagePoint, whose partners include Robert F. Kennedy Jr., the man with the famous Democratic father and uncle. The company’s key execs have contributed handsomely to the campaigns of Harry and Barry.

Ivanpah Solar Electric Generating System

BrightSource advised potential investors in its initial public offering filed with the SEC that:

Our future success depends on our ability to construct Ivanpah, our first utility-scale solar thermal power project, in a cost-effective and timely manner. Our ability to complete Ivanpah and the planning, development and construction of all three phases are subject to significant risk and uncertainty, including:

— Ivanpah is being primarily financed by a U.S. Department of Energy, or DOE, guaranteed loan facility, which requires the project companies to remain in compliance with numerous financial, construction and operational covenants to draw funds under the loan facility, compliance with which are within the control of NRG Solar, the majority equity owner and operator of Ivanpah;

— the construction of any of our projects will be subject to the risks inherent in the construction of solar thermal projects that have never been built on the scale of Ivanpah …

It goes on and on laying out numerous potential deal killers and project breakers.

The IPO mentions that the “industry is rapidly evolving and highly competitive and failure to further refine and develop improved technologies could render our solar thermal technology obsolete and reduce our sales and market share relative to other renewable energy sources.”

The IPO also spells out who has the most skin in the game:

Development and construction of large scale solar thermal facilities is capital intensive. As a result, the ability to access capital efficiently and effectively is crucial to our growth strategy. For example, Ivanpah received a $1.6 billion loan, guaranteed by the U.S. Department of Energy, or DOE, and funded by the Federal Financing Bank, a branch of the U.S. Department of Treasury, or U.S. Treasury. In addition, Ivanpah has received a total equity commitment of $598 million, consisting of $300 million from NRG Solar, $168 million from a Google Inc. affiliate and $130 million from us.

And it’s not like the company is a going concern. The IPO explains, “We have generated substantial net losses and negative cash flows from operating activities since we commenced operations. We have incurred losses of approximately $204.1 million from our inception …”

According to BrightSource’s website, at peak construction the project will create 1,000 jobs. That’s $1.6 million in taxpayer money at risk per job. It lists operations and maintenance jobs as 86.

The project is mentioned in Peter Schweizer’s new book “Throw Them All Out,” because of the cozy political ties involved. It seems Sanjay Wagle, one of the principals in BrightSource, helped raise money for Obama’s 2008 presidential campaign, and when he got elected, Wagle was given a job at DOE, advising on energy grants.

Harry Reid was once quoted in a BrightSource press release: “I am very happy to see utility-scale solar projects like this one moving forward with strong Administration support, and I am hopeful that this project will serve as a cornerstone of the clean energy economy in the Southwestern U.S. I look forward to BrightSource and other solar companies putting more Nevadans to work by building major projects like this in Nevada very soon.”

In 2010 Harry held a fundraiser at BrightSource’s headquarters in California, shortly after the firm got the loan guarantee. It was a breakfast hosted by Brightsource CEO, John Woolard, and the chairman of PG&E Corporation, Peter Darbee. Woolard personally gave Reid’s campaign $4,400 and other company execs boosted the total to $6,000. PG&E’s PAC since 2001 has given Reid $7,500. Darbee personally gave Reid $2,000.

A website called The Party Blog reported a year ago on some other cozy relationships. Brightsource reportedly paid $40,000 to R&R Partners, supporters of Reid, to work on stimulus funding matters. BrightSource also has a deal with Harvey Whittemore’s moribund Coyote Springs Land Company — Whittemore is tight with Harry — for the lease of some land for further solar projects.

The website reports that Reid got a total of $66,000 in campaign contributions by August 2010 from the alternative energy companies, more than anyone else. In March 2010, the Solar Energy Industries Association named Reid “Solar Champion of the Year.”

Advertisements

4 comments on “Taxpayer-funded solar energy project in Ivanpah Valley — one cozy with Harry and Barry — is filled with financial landmines

  1. Bruce Feher says:

    Bend over taxpayers, you dogs….

  2. […] solar power plant just across the border in California in the Ivanpah Valley is also struggling, despite a $1.6 billion federal loan […]

  3. Jamie says:

    Dingy Harry is such a fraud and a hypocrite. He is only for votes trying to create union jobs to bolster the left votes.

  4. […] Harry Reid was once quoted in a BrightSource press release about the Ivanpah project: “I am very happy to see utility-scale solar projects like this one moving forward with strong Administration support, and I am hopeful that this project will serve as a cornerstone of the clean energy economy in the Southwestern U.S. I look forward to BrightSource and other solar companies putting more Nevadans to work by building major projects like this in Nevada very soon.” […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s