Posts Tagged ‘Lt. Col. Rick Blower’

State Lawmakers Call For Review Of 20-Year Solar Contract

By Sean Whaley | 5:01 pm April 24th, 2012

CARSON CITY – State lawmakers today approved $46,284 from a legislative contingency fund to help the Nevada Office of the Military cover a budget shortfall due to high energy costs resulting from a solar project built at three of its sites around the state.

But lawmakers also asked for an attorney general review of the 20-year deal with Sierra Solar to see if the 15 cent per kilowatt hour charge for the electricity can be modified. The rate is now higher than what the agency could get buying power directly from NV Energy.

The contract was entered into in December of 2010, before Gov. Brian Sandoval began his term.

Photo by Fernando Tomás via Wikimedia Commons.

Jennifer McEntee, administrative services officer for the agency, said the energy costs to the state are higher at the three sites because the facilities receive more state general fund support than other facilities operated by the agency. The budget shortfall is the result of this higher state share of the energy costs, she said.

State Budget Director Jeff Mohlenkamp told lawmakers, meeting as the Interim Finance Committee, that future solar projects will not go forward without a guarantee that they will be at least cost neutral to the state.

“I do think that there is still some really good opportunities for solar, however it really has to be dialed in in order for it to pencil out,” he said.

Keys to successful projects are obtaining both federal tax credits and rebates from NV Energy, Mohlenkamp said.

Lt. Col. Rick Blower said when the contract was approved, electricity rates were expected to rise. Rates have come down instead, however. But it is yet to be determined if the 20-year contract is a bad deal for the state, he said.

Sen. Steven Horsford, D-Las Vegas, asked if there is an opportunity to renegotiate the contract.

Mohlenkamp said any such effort would be difficult, given the investment by the company in the equipment at the three facilities.

Horsford asked that the attorney general’s office review the agreement anyway.

“It’s not that the technology or the approach on renewables is the problem, it’s the fact that someone negotiated a bad deal on behalf of this department,” he said. “We can’t pay for something at a higher rate per kilowatt hour than what we can get in the market from other competing resources.”

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Audio clips:

State Budget Director Jeff Mohlenkamp says the state will be careful moving forward with solar projects to ensure they are at least cost neutral:

042412Mohlenkamp1 :10 normal commercial terms.”

Mohlenkamp says some solar projects are expected to be worth pursuing:

042412Mohlenkamp2 :08 to pencil out.”

Sen. Steven Horsford says the issue is someone negotiated a bad deal:

042412Horsford1 :25 of this department.”

Horsford says an attorney general review of the contract is needed:

042412Horsford2 :09 other competing resources.”

 

 

Solar Project No Short-Term Energy Panacea For Nevada Office Of Military

By Sean Whaley | 3:51 pm April 3rd, 2012

CARSON CITY – Nevada’s Office of the Military figured it would be money ahead after entering into a contract with a firm to build solar panels on three of its sites around the state to supply it with electricity.

But today officials with the office won approval from the state Board of Examiners to seek $46,284 from a legislative contingency fund to pay excess utility costs. The reason is because the solar energy being provided under the contract is costing the agency more than if it purchased electricity directly from NV Energy.

Photo by Fernando Tomás via Wikimedia Commons.

The actual shortfall is $74,000 but budget savings are being used to help reduce the amount needed from the contingency fund.

Jennifer McEntee, administrative services officer for the agency, said the 20-year contract with Sierra Solar 1 charges 15 cents per kilowatt hour. Currently NV Energy is charging about 11 cents per kilowatt hour. At the time the contract was signed, NV Energy was charging 14.75 cents per kilowatt hour so it looked like a good deal.

The board, made up of Gov. Brian Sandoval, Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, approved the request, which will now go to the Legislature’s Interim Finance Committee.

State Budget Director Jeff Mohlenkamp also told the board that such contracts going forward are being reviewed carefully to ensure they make financial sense for the state.

“I can assure you that we are looking very carefully at the future awards that we give out,” he said.

Sandoval was told there is no interest in renegotiating the rate by the contractor although some concessions were made. The deal was approved before Sandoval was elected governor in December 2010, retroactive to September 2009.

“We actually spent probably about six months with representatives of Sierra Solar attempting to renegotiate,” said Lt. Col. Rick Blower. “Their position had always been that they have invested millions of dollars to build this system and that the income stream was what made it possible for them to build the project with their funds with no state funds or federal funds.”

Sandoval said after the meeting: “As I said we will be vigilant as we move forward to make sure we’re not in that position again.”

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Audio clips:

Lt. Col. Rick Blower says the agency got some concessions from the contractor:

040312Blower1 :27 burden to us.”

But Blower says the company would not lower its charges:

040312Blower2 :19 or federal funds.”

Gov. Brian Sandoval says the state will make sure it is not placed in such a position again:

040312Sandoval :07 that position again.”