57°F
weather icon Partly Cloudy

Bankruptcy mentioned as possibility for Nye solar plant

The Crescent Dunes Solar Energy Plant could be heading toward bankruptcy, according to a lawsuit filed by the project’s developer.

Earlier this month, SolarReserve filed a lawsuit against the U.S. Department of Energy and Tonopah Solar Energy. SolarReserve alleges the Department of Energy interfered with its “right to participate in the management” of Tonopah Solar Energy, the plant’s operator.

The lawsuit was filed two days before NV Energy provided a notice of termination on its renewable power purchase agreement with the solar project, citing “frequent and prolonged outages.”

In 2008, an affiliate of SolarReserve formed Tonopah Solar Energy as an LLC to develop, own and operate the 110-megawatt solar thermal plant with molten salt storage in central Nevada. Three years later, the Department of Energy agreed to loan Tonopah Solar Energy $700 million to fund the project, the first of its kind in the world.

‘Handpicked’ managers

SolarReserve contends that the LLC agreement gives it the right to appoint one of the managers of Tonopah Solar Energy. But according to the lawsuit, the Department of Energy sent a notice of default letter only days after SolarReserve installed Troy Taylor as a new manager.

According to the lawsuit, the Department of Energy is looking to appoint two new members to Tonopah Solar Energy’s board of managers through the notice, “which gives the appearance of the (Energy Department) in complete control of Tonopah through its handpicked ‘independent’ directors which comprise the entirety of the Tonopah Board of Managers.”

And because major decisions — such as bankruptcy proceedings — require a unanimous vote from the managers, the lawsuit alleges that the Energy Department can determine the fate of Tonopah Solar Energy without any representation of SolarReserve on the board.

“The (department’s) actions interfere with SolarReserve’s right to participate in the management of Tonopah; and they result in a forfeiture of SolarReserve’s property rights in a $1 billion project which SolarReserve started in 2008, without an opportunity to contest that forfeiture,” according to the lawsuit.

The Department of Energy declined to comment on pending litigation. A representative from SolarReserve could not be reached in time for publication.

‘Frequent and prolonged outages’

On Oct. 4, NV Energy provided a notice of termination to the Crescent Dunes project. The power purchase agreement had been set to end on Dec. 31, 2040.

NV Energy spokeswoman Jennifer Schuricht said the project’s performance was not meeting the standards laid out within its contract.

“We have a responsibility to our customers to ensure the projects for which we have Public Utilities Commission of Nevada approval are delivering as contractually required,” Schuricht said in an email. “We will enforce its provisions diligently to protect our customers from any negative reliability and cost impacts as a result.”

The solar project was approved by the Nevada Public Utilities Commission in 2010 but took significantly longer to construct than company officials predicted. It didn’t enter commercial operations until November 2015.

Less than a year later, it shut down for eight months for repairs after a small leak in a molten salt tank. According to a June application from NV Energy, the frequent and prolonged outages at the plant reduced the expected amount of energy and credits by 50 percent this year and 25 percent in 2020 and beyond.

The report said NV Energy is positioned to meet its future credit commitments, but “given the size of the project, Nevada Power simply does not have enough credit reserves nor sufficient new renewable capacity in the pipeline to overcome lasting, multi-year credit shortfalls.”

According to the lawsuit, NV Energy argued that the project failed to meet its contracted energy levels because of “various issues” with a hot salt tank and “construction-related problems.”

Tonopah Solar Energy said the issues with the tank were unavoidable, but SolarReserve pointed fingers at Cobra Thermosolar Plants — which helped engineer and construct the project — and its related entities.

Don't miss the big stories. Like us on Facebook.
THE LATEST
Health Expert: Spread of the Coronavirus not as virulent in the US

The spread of the novel coronavirus, which has infected more than 69,000 people globally and led to more than 1,600 deaths, may not be as impactful in the U.S. as it has been in China, where the virus is thought to have originated. Over a dozen people have tested positive in the U.S. as of mid-February, according to the World Health Organization.

Hearts for the homeless

Ashlin Banning, just 8 years old, is trying her best to make a difference with the homeless here in the valley.

Nevada state employee harassment claims increase 50%

Despite a task force created to address the problem of workplace sexual harassment, the number of claims filed by state employees has increased by more than 50 percent.

Nevada Census grants available to fund materials, outreach

The Nevada Complete Count Committee is now rolling out its 2020 census administrative support and partnership grant applications, aimed at helping provide cash to organizations and entities working on the 2020 census.

Troublesome tumbleweeds create chaos

Pahrump resident Betty Robison was blown away when she peered out the window of her East Mt. Charleston Drive home last week.

In Season: Start seeds now for a spring and summer harvest

This is an exciting time of year for the vegetable gardener. Seeds started over the next few weeks will be providing you with a bounty in just a few short months. Seed starting is easier than you may think if you follow a few simple steps.

California Lottery

No one matched all five numbers and the mega number in the Wednesday, Feb. 12 drawing of the California Super Lotto. The next jackpot will be at least $8 million.

Nevada panel approves more money to protect governor

The Interim Finance Committee approved an additional $15,500 to cover additional costs related to protecting Gov. Steve Sisolak, who travels more frequently than his predecessor.