Las Vegas Review-Journal

Lawsuit emerges in solar project

Developer sues DOE, operator

- By Bailey Schulz Las Vegas Review-journal

The Crescent Dunes

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

On Wednesday, 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.

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.

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.

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