Tonopah solar project poised to get $737 million loan guarantee

By Karoun Demirjian

Friday, May 20, 2011 | 1:55 a.m.

The Tonopah solar energy storage plant that came to symbolize Nevada Democrats’ campaign to preserve stimulus loan guarantees will be getting its money, it appears, after the Department of Energy delivered a conditional promise to back $737 million to get the project off the ground.

With it, Senate Majority Leader Harry Reid and Energy Secretary Stephen Chu announced Thursday, 600 jobs will be created in Nye County, and more than 4,000 more across the country, as parent company SolarReserve breaks ground on the 110-megawatt Crescent Dunes project this summer.

The project, which is the first American rollout of an innovative solar energy storage technology, will produce 500,000 megawatt hours per year to be sold to NV Energy. That’s enough to power 43,000 homes during peak operation periods.

“I don’t think people realize how big the project is,” Reid said. “The reason we’re able to move forward is because we were able to protect the loan guarantee program.”

Democratic Rep. Shelley Berkley cheered the announcement as well.

“Nevada’s future is in clean energy and we can create jobs and strengthen our economy by investing in the development of more solar, wind, geothermal and other sources of renewable power found in abundance right here at home in the Silver State,” Berkley said. “That is why I fought Republican efforts to cut the loans for renewable energy projects like this new solar plant near Tonopah.”

The point both took pains to hammer home Thursday — that they took pains to preserve the availability of these funds — hearkens back to the fight over the fiscal 2011 budget fight, concluded last month on the brink of a government shutdown.

The several rounds of budget negotiations began with a bill in the House, filed as H.R. 1, which was the House Republican appropriators’ attempt to cut $61 billion from the budget, bringing fiscal 2011 spending levels to about $100 billion below what the president had initially requested. The final compromise scaled back the budget by about $38.5 billion.

But before they got to that point, the House took a vote on the H.R. 1 package, which included zeroing out all unspent energy loan guarantee funds remaining under the program, which was a creation of the stimulus. Every Republican in the House at the time, including now-Sen. Dean Heller, voted to end the loan guarantee as part of that much larger omnibus package of cuts.

On Thursday, Heller also spoke highly of the Department of Energy’s decision to push the program forward and get the project funded. But he defended his decision to de-fund stimulus projects, of which the loan guarantee program was one, as a means of cutting spending.

“Sen. Heller applauds SolarReserve for bringing this project to Nevada. He has a long history of supporting renewable energy development,” said Heller’s communications director, Stewart Bybee. “However, what he does not support is borrowing a trillion dollars from China to fund a stimulus bill that has had negligible impact on economic recovery and has placed Nevada with the highest rate of unemployment in the country since its passage.”

“While the senator is pleased to hear that this project has moved forward, it is also important to remember that nearly 30,000 jobs have been lost in Nevada since the stimulus has passed,” Bybee said.

The stimulus passed in early 2009. Nevada’s unemployment rate took a turn for the worse in 2008, and worsened steadily through 2009 and 2010, reaching a peak high of 14.4 percent.

Democrats have countered the accusation that the stimulus is to blame for those numbers, saying it staved off further disaster, saving or creating “tens of thousands of jobs in Nevada,” according to Reid’s campaign website. And they point to recent economic improvements: over the last few months, Nevada’s unemployment rate has slowly started to fall, as stimulus funds are still being disbursed.

Republicans have questioned the lack of specificity of Democrats’ statistics, which are murky. In their estimation, the $800 billion stimulus was a failure.

But administration officials defend a different take on their efforts.

They say the project-based manner in which stimulus funds were distributed makes it almost impossible to get a straight up and down head count of which jobs were produced or preserved with the funds the way one can count the number of people who file claims at the unemployment office.

H.R. 1 influenced the budget negotiations, but it never became law: the Senate voted it down in March. Heller and then-Sen. John Ensign ultimately did not support the compromise package Congress adopted and the rest of the Nevada delegation supported, arguing the package didn’t do enough to cut spending.

Now, the fate of loan guarantees is again up for question. While the compromise Reid and House Speaker John Boehner struck maintained the loan guarantees for any project that had already been promised or obligated funds, it didn’t say anything about the program’s fate after Sept. 30.

That’s not just the end of the fiscal year and thus the budget; it’s also when the stimulus program was slated to end. After this, there’s nothing left to save.

“We have two-thirds of the money obligated,” Chu said Thursday. “We’re shooting to make additional commitments — Nevada has a few in there. But the recovery part of the loan program is over Sept. 30.”

Reid says he’s going to try to push for the program to be continued.

“I feel comfortable that something this good should be extended,” he said. “It creates jobs and lessens dependence on foreign oil.”