On 28 September 2011, the U.S. Department of Energy (DOE) announced the finalization of a $737 million loan guarantee to Tonopah Solar Energy, LLC to develop the Crescent Dunes Solar Energy Project:
U.S. Energy Secretary Steven Chu announced the Department [has] finalized a $737 million loan guarantee to Tonopah Solar Energy, LLC to develop the Crescent Dunes Solar Energy Project. The solar project, sponsored by SolarReserve, LLC, is a 110 megawatt concentrating solar power tower generating facility with molten salt as the primary heat transfer and storage medium. It will be the first of its kind in the United States and the tallest molten salt tower in the world. Located 14 miles northwest of Tonopah, Nevada, on land leased from the Bureau of Land Management, the company anticipates the facility will fund 600 construction jobs and 45 permanent jobs. The Crescent Dunes Solar Energy facility is expected to avoid nearly 290,000 metric tons of carbon dioxide annually and produce enough electricity to power over 43,000 homes.
Later in December 2011, a claim about Harry Reid, Tonopah, and the Pelosi family made the rounds:
The Solar thing just got a little more interesting …. REALLY!
The Tonopah Solar company in Harry Reid’s Nevada is getting a $737 million loan from Obama’s DOE.
The project will produce a 110 megawatt power system and employ 45 permanent workers.
That’s costing us just $16 million per job.
A huge investment partner in this endeavor is Pacific Corporate Group (PCG).
The PCG executive director is Ron Pelosi who is the brother to Nancy’s husband.
Just move along folks ….nuthin goin on here.
The claim that the aforementioned loan guarantee is “costing us $16 million per job” is spurious for two reasons. First off, although the project is eventually expected to result in 45 permanent jobs, it is also expected to create several hundred construction jobs in the near-term in addition to thousands of other related jobs:
“We expect to create more than 600 direct jobs on the project site over the 30 month construction period, and more than 4,300 direct, indirect and induced jobs at companies throughout the U.S. that provide engineering, equipment supply and manufacturing, transportation and other value-added services. Orders and activities are already proceeding in more than twenty states across the country,” Kevin Smith, [CEO of SolarReserve] said.
Second, the dollar figure mentioned is a loan guarantee, so the project isn’t going to be “costing us” (i.e., the taxpayers) $737 million unless SolarReserve defaults on the entire loan amount, forcing the DOE to cover the shortfall. If SolarReserve pays back the loan as expected, the added jobs won’t have cost us anything. SolarReserve announced in December 2009 that it had already signed a 25-year power purchase agreement with NV Energy for the sale of electricity from the Crescent Dunes Solar Energy Project.
It is true that one of SolarReserve’s investors is Pacific Corporate Group (PCG), a private equity firm which has employed Ronald Pelosi (the brother-in-law of U.S. Representative and former Speaker of the House Nancy Pelosi) as an executive since April 2011. However, PCG’s investment in SolarReserve is a minuscule 2 percent share, the investment and the DOE loan guarantee process for SolarReserve were both initiated years before Ronald Pelosi joined the firm, and Pelosi had no personal financial stake in the outcome:
Ronald Pelosi joined Pacific Corporate Group in April, roughly three years after it had invested in SolarReserve, a company official confirmed. The official said Ronald Pelosi doesn’t stand to profit or lose from the firm’s stake in SolarReserve because he doesn’t have an interest in the fund that made that investment.
The Pacific Corporate Group official said that no one from the firm had contacted the White House in connection with the application.
“This is an absurd suggestion,” Department of Energy press secretary Damien LaVera said of any connection between Ronald Pelosi and the loan guarantee announcement. “Many months of rigorous technical, financial and legal due diligence was done by nonpolitical career employees to scrutinize every aspect of this transaction — over a period of years.
“It was approved because it meets all the requirements of the program — helping America win the clean energy race and create entire new industries for American workers.”
Nancy Pelosi, at an event in San Francisco to drum up support for President Obama’s jobs plan, told The [San Francisco] Chronicle that she was not familiar with the solar firm, its federal loan application or any association her brother-in-law had with the firm.
Ronald Pelosi is “a great guy,” she said, adding that she was sorry he had been “dragged into this.”