By Mark Waite
Solar Reserve Chief Executive Officer Kevin Smith said he expects to break ground on the 110-megawatt concentrated solar power plant at Crescent Dunes in July, after Congress is expected to renew the loan guarantee program for renewable energy projects this week.
U.S. Sen. Harry Reid, D-Nev., who hosted a conference call with reporters Thursday morning, said he expects Congress to pass the federal budget for the remainder of the fiscal year until Sept. 30, which includes $38 billion in budget cuts but not a House Republican plan to gut the loan guarantee program for the solar industry.
“The Department of Energy loan guarantee program is so vitally important to what we’re trying to do in Nevada. It’s a public-private partnership that helps companies like Solar Reserve create jobs,” Reid said.
The senator said seven clean energy projects throughout Nevada stand to benefit from the loan guarantee program. The new transmission line from Ely to Las Vegas already received funding from the program, he said.
“Our lead project, which we hope to start construction on in July near Tonopah, is a $700 million project, a 110-megawatt project that includes energy storage, an innovative technology that was developed in the U.S. That project will create 650 construction jobs on site,” Smith said.
He estimated the loan guarantee program will create in excess of 50,000 jobs across a dozen states.
Smith said the U.S. Department of Energy provides a loan guarantee through a federal financing bank at an interest rate of about 5 percent that his company will repay. He wouldn’t disclose the amount Solar Reserve will seek under the program, but said they are seeking more than a $500 million loan.
“We’ll bring $250 million in private money to the investment structure,” Smith said. “In reality even though it’s an item in the budget it’s actually a money-making activity for the federal government.”
Solar Reserve has completed its negotiations with the DOE, their application for the loan guarantee is now going through the DOE credit committee and some interagency approvals through the U.S. Treasury Department and the Office of Management and Budget OMB , Smith said.
“We’re hoping for a conditional commitment maybe by the end of the month or early May. Then we could go to financial close and start construction in July,” he said. “The loan isn’t final, final yet, but we agreed on final terms with the Department of Energy.”
U.S. Interior Secretary Ken Salazar last December approved a record of decision granting Solar Reserve the right-of-way to use 2,094 acres of public land off Poleline Road, 13 miles northwest of Tonopah. Solar Reserve has already signed a 25-year power purchase agreement to supply energy to NV Energy.
Reid said hopefully money provided through the loan guarantee program, which is part of the economic stimulus proposed by President Obama, will be obligated before the start of the next fiscal year Oct. 1.
Reid’s office released a list of six other renewable energy projects in Nevada that will benefit from the extension of the loan guarantee program. They include Solar Millennium, a company that plans to build two, 250-megawatt concentrated solar power plants in Amargosa Valley; another solar project planned by Fotowatio in Apex, northeast of Las Vegas; a wind project in Spring Valley near Ely; the Amonix solar manufacturing project in Las Vegas; a Fulcrum Bioenergy biofuels project in Storey County and the U.S. Geothermal project in Gerlach.