Move over, Solyndra. Another green boondoggle from the Obama era has failed, and taxpayers are out as much as $510 million. Late last week Judge Karen Owens approved a Chapter 11 plan of reorganization by Tonopah Solar Energy. Tonopah operated the Crescent Dunes solar plant in Nevada that received $737 million in guaranteed loans from the Obama Administration.
The plan includes a settlement with the Department of Energy that leaves taxpayers liable for as much as $234.68 million in outstanding debt, but the total public cost is even higher. Crescent Dunes also received an investment-tax credit, and the 2009 stimulus legislation allowed it to receive a cash payment in lieu of credit. In 2017 the plant received more than $275.6 million from Treasury under the Section 1603 program, which it used to service its outstanding liabilities. So taxpayers already gave Crescent Dunes cash to pay off its taxpayer-backed loans.
...The feds called Crescent Dunes a success until forced to admit it was a failure. As late as April 2017—when the plant was in the throes of a months-long shutdown—DOE pronounced it a “milestone for the country’s energy future” and a “success story” taken from “mirage to reality.” But in August spokeswoman Shaylyn Hynes admitted that “this project has consistently faced technical failures that have proven difficult to overcome."
Under the settlement, taxpayers could recover up to $100 million if the plant can resume operating and meet milestones for energy production and revenue. Don’t count on it. In 2019 NV Energy terminated its power purchase agreement, so now Crescent Dunes doesn’t have a buyer for its power, which is far more expensive than what other renewable-energy plants in Nevada charge.
The Crescent Dunes failure shows again what happens when government invests in commercial ventures beyond its expertise for political purposes. Scarce resources are misallocated and taxpayers lose. We wish we could say the politicians have learned from failure, but the Biden Administration is coming to town promising much more of the same.
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