Trial begins over collapsed energy deal
Judge will determine if energy company owes unpaid portion of lease
When BrightSource Energy announced in March 2009 that it would build a 600-megawatt solar power plant as part of the huge Coyote Springs development northwest of Las Vegas, there were cigars all around.
“We are extremely proud to collaborate with BrightSource on a project that will demonstrate our and Nevada’s commitment to renewable energy,” said Harvey Whittemore, then the Coyote Springs developer.
BrightSource’s executive vice president for project development, Tom Doyle, said, “We’re excited to partner with Coyote Springs to place Nevada on the cutting edge of renewable energy.”
On Monday, however, both sides talked about each other through attorneys. A trial started in Clark County District Court to assess responsibility for the project’s demise a little more than two years later.
The decision, which will rest with Judge Elizabeth Gonzalez and not a jury, will determine whether Coyote Springs deserves the maximum $183.4 million it requested to cover the unpaid portion of a long-term lease, or whether BrightSource owes nothing after cleanly ending the deal.
In his opening statement, Coyote Springs attorney James Pisanelli depicted BrightSource as a heavy-handed and financially struggling partner that tried several times, sometimes successfully, to squeeze out sweeter terms while threatening to walk.
“I am going to make one request and not veer from it, to hold BrightSource to the deal it made,” he said.
In his recounting of the project’s brief history, Pisanelli said Coyote Springs fulfilled the critical terms of the lease covering 8,300 acres in the northeast corner of the 42,000-acre development. Although BrightSource sent a termina- tion notice, he argued it came too late to avoid financial penalties.
BrightSource attorney Peter Bernhard argued that the changes to the original deal were necessary for a project that held much promise but faced daunting hurdles.
“(BrightSource) wanted this project to work,” he said. “This was a positive thing for both sides, not some sinister attempt by a company that is dead set on putting the screws to a poor, innocent landowner. There aren’t bad people in this case.”
Coyote Springs, about 58 miles northwest of Las Vegas, was planned as a new town with as many as 150,000 homes, a golf course and related commercial sections. The land, assembled in the late 1990s, straddles the Clark and Lincoln counties boundary along U.S. Highway 93.
The initial announcement called for 600 watts, with construction to start in early 2010. It was expanded to 960 watts in September 2009.
At the time, Coyote Springs stalled as the local housing market plummeted, and it still remains on hold, while Oakland, Calif.-based BrightSource was adding new plants to its roster.
The company uses a design that aims thousands of mirrors, called heliostats, at central towers. Sunlight reflected by the heliostats heats water in tall, central towers to produce steam that drives turbines. The company has put a similar plant into operation south of Primm.
Coyote Springs obtained Federal Aviation Administration approval for towers as tall as 820 feet, over the objections of top officers at Nellis Air Force Base, before a March 1, 2012, deadline.
This meant, according to Coyote Springs, that BrightSource could not walk away for free. As compensation for what it calls a 42-year lease, Coyote Springs has asked for at least $2.7 million to cover unpaid lease payments, or a $5.8 million termination fee, or the $183.4 million present-day value of the balance of the lease.
Bernhard countered that the towers were only part of the package.
For the deal that he described as a twoyear option and a 40-year lease, BrightSource also had to find a way to transmit the electricity into the power grid, where utilities could buy it.
When BrightSource could not clear that bar, it sent a termination notice as spelled out in the deal that relieved it of any further obligations.
The trial could last until the end of the month.