From the New York Times:
In a remote desert spot in northern Nevada, there is a geothermal plant run by a politically connected clean energy start-up that has relied heavily on an Obama administration loan guarantee and is now facing financial turmoil.
The company is Nevada Geothermal Power, which like Solyndra, the now-famous California solar company, is struggling with debt after encountering problems at its only operating plant.
After a series of technical missteps that are draining Nevada Geothermal’s cash reserves, its own auditor concluded in a filing released last week that there was “significant doubt about the company’s ability to continue as a going concern.”
It is a description that echoes the warning issued in 2010 by auditors hired by Solyndra, which benefited from the same Energy Department loan guarantee before its collapse in August caused the Obama administration great embarrassment.
The parallels between the companies illustrate the risk inherent in building the clean energy marketplace in the United States, government officials and industry experts say. Indeed, the loan guarantee program exists precisely because none of these ventures are a sure bet.
There are important differences between the fate of Nevada Geothermal and Solyndra, the maker of solar panels that has filed for bankruptcy.
The amount of money the federal government has at stake with Nevada Geothermal — a loan guarantee of $79 million plus at least $66 million in grants — is much smaller than the $528 million investment in Solyndra. There have been no allegations of wrongdoing by Nevada Geothermal or its Blue Mountain, Nev., plant.
Executives of the company express confidence that they can recover and say that the government investment is not at risk, despite the challenges they face because of a high debt load and lower-than-expected energy output at their plant.
“We are here,” said Brian D. Fairbank, the chief executive, who like other company executives works out of Vancouver, British Columbia, where Nevada Geothermal Power has corporate offices. “We’re doing O.K.”
An Energy Department spokesman said he considered the Nevada Geothermal project a success, noting that the company had a long-term contract to sell its power.
“The Blue Mountain power plant is up and running, generating clean, renewable power and has been consistently making its loan payments on time and in full,” the spokesman, Dan Leistikow, said.
The company also did not hire half a dozen Washington lobbying firms, as Solyndra did, and there is no evidence of White House involvement in pushing the project.
But the Nevada Geothermal project has benefited from the support of a bipartisan collection of Nevada politicians, most notably Senator Harry Reid, a Democrat and the Senate majority leader, who has called his home state the “Saudi Arabia of geothermal energy.”
Nationally, geothermal energy produces only about 3,000 megawatts of power, a minuscule slice of the national electricity supply. The Nevada Geothermal plant generates just 35 megawatts — enough to serve about 35,000 homes for a year — and the company has only 22 employees in the state.
But Mr. Reid has taken the nascent geothermal industry under his wing, pressuring the Department of Interior to move more quickly on applications to build clean energy projects on federally owned land and urging other member of Congress to expand federal tax incentives to help build geothermal plants, benefits that Nevada Geothermal has taken advantage of.
“This project is exactly the type of initiative we need to ensure Nevada creates good-paying jobs,” Mr. Reid said in a statement in April 2010, after he visited the company’s Nevada plant. That was two months before the project even got conditional approval for the Energy Department loan guarantee.
During the tour, Mr. Reid had a chance to see electric generation equipment installed by a company called Ormat Technology, which is a Nevada Geothermal partner. Ormat’s lobbyist in Washington, Kai Anderson, and one of the company’s top executives, Paul Thomsen, are former aides to Mr. Reid....MORE
*Our July 31 post "Harry Reid Responds to My Earlier Implication That He is A Wynn Resorts Property (WYNN)"
Senator, if I caused offense, I apologise.
I meant the earlier post in the best possible way.
I also meant this in the best way:
This, on the other hand:....And even though I once thought, while gazing upon Harry Reid giving a speech, "This guy looks like the pervert uncle of that quiet family with the retarded daughter..." these days I simply say to myself: "Poopyhead"....