The New York Times reports on another Department of Energy green energy loan going bad. This one involves Nevada Geothermal Power, which generates electrical power using near-surface geothermal heat. After $79 million in loans and $66 million in outright grants, the company’s auditor has concluded that there is significant doubts about its ability to continue as a going concern.
In this case, Nevada Geothermal was unable to deliver electricity in the quantities that it had planned and contracted to sell. It has also encountered technical difficulty with well design and surface facilities that may require substantially more investment.
And like Solyndra, there are Democratic fingerprints at the scene.
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.” …
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.
[Links in original. – Ed.]
Nevada Geothermal’s corporate offices are in Vancouver, BC. Many small energy companies incorporate in Canada because its lack of “blue sky” laws facilitate thinly capitalized startup companies. Which raises another question — why in the world is the DOE loaning (and giving) millions of dollars to foreign penny-stock companies?
The Times says there are no allegations of wrongdoing on the part of Nevada Geothermal executives. How about wrong thinking on the part of our Administration?
Cross-posted at RedState.com.
Lovin’ those financial statements.
– 15 little subsidiaries incorporated in different states that don’t appear to do anything except figure out ways to suck up stimulus money
– The plant cost hundreds of millions to build (exact amount obscured by accounting gimmicks), but they didn’t figure out how much power they’d get out of it before building it. Nevada Geothermal’s loan arrangements were based on wildly-inaccurate estimates of estimated power output, so now they’ll never have enough money to pay their loans.
– An unnamed Nevada Geothermal director got $750,000 worth of “success fees” for arranging the $79 million Department of Energy loan
– Nevada Geothermal just got another $7.8 million from the stimulus package, that taxpayers will never see again
The one saving grace I’m seeing is that I’m not seeing multimillion-dollar executive compensation packages; none of the company heads get more than $300,000 in salary, stock options, perks, etc.