Two Solar Plants Get Loan Guarantees
By RYAN TRACY WASHINGTON—Two days before a deadline, the Department of Energy completed two loan guarantees Wednesday for solar-power plants under the same economic-stimulus program that backed now-bankrupt solar-panel maker Solyndra LLC.
The guarantees for plants in Nevada and Arizona will support more than $1 billion in financing, placing them among the largest deals the department has closed since Solyndra filed for bankruptcy earlier this month. Records released since then show some administration officials felt rushed during the review of Solyndra's $535 million loan guarantee in 2009, and Republicans have criticized the program as a waste of taxpayer dollars.
Most of the stimulus funding for the loan guarantees expires Friday, though the Energy Department will still have a smaller pool to use after that date. Seven other renewable energy projects totaling about $5.3 billion are still waiting to get loan guarantees. Last week, the Energy Department told two companies it wouldn't be able to complete their loan guarantees by the Friday deadline.
Both projects approved Wednesday are facilities that will generate power. They are considered less risky than solar-panel manufacturing companies like Solyndra because they have long-term contracts in place to sell electricity.
One $737 million loan guarantee will help finance a 110-megawatt power plant near Tonopah, Nev., that will use technology never before used at commercial scale. An array of mirrors will focus the sun's rays on a stream of super-heated liquid that can be kept hot in insulated tanks for weeks, providing heat to run steam generators even after the sun sets.
The main sponsor of that project is Solar Reserve LLC, in which Argonaut Private Equity holds a 3% stake. Argonaut is an investment arm of the family foundation of George Kaiser, a billionaire political supporter of President Barack Obama. Argonaut also holds a 39% stake in Solyndra. Obama administration officials have denied that Kaiser's connection to the White House played a role in the decision to support Solyndra.
Kevin Smith, Solar Reserve's chief executive, said the deal closed Wednesday had undergone about two years of government review, which he described as "pretty excruciating."
"I've built 50 projects," he said. "The level of due diligence here has far, far exceeded that on the commercial side."
A second, $337 million loan guarantee announced Wednesday will back Sempra Energy's Mesquite Solar I project in Arizona, about 45 miles west of Phoenix. That 150-megawatt facility will use solar panels made in Arizona by Suntech Power, which is based in China.
The Obama administration said both projects will fund hundreds of construction jobs. "If we want to be a player in the global clean energy race, we must continue to invest in innovative technologies that enable commercial-scale deployment of clean, renewable power like solar," Energy Secretary Steven Chu said.
—Cassandra Sweet contributed to this article. |
