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SolarReserve sues US DOE over Nev. concentrating solar plant's fate

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SolarReserve sues US DOE over Nev. concentrating solar plant's fate

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SolarReserve's Crescent Dunes Solar Energy Plant in Nevada, which features molten salt power tower energy storage capabilities, is facing a takeover by federal regulators. Source: SolarReserve LLC

A holding company affiliated with Santa Monica, Calif.-based SolarReserve LLC filed a lawsuit in Delaware against the U.S. Department of Energy and Tonopah Solar Energy, charging that the DOE is essentially trying to take control of the Nye County, Nev.-based Crescent Dunes Solar (Tonopah Solar) facility and force Tonopah Solar Energy into bankruptcy.

Touted at its 2015 opening as a first-of-its-kind facility that uses molten salt to capture and store solar energy, the project was financed through a $737 million federal loan guarantee to Tonopah in 2011. The holding company, SolarReserve CSP Holdings LLC, said in the Oct. 2 lawsuit that the DOE wrested control of Tonopah's management board from SolarReserve through a notice of default on that debt sent to Tonopah by the DOE.

"The DOE'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," the lawsuit said.

Tonopah is also named as a defendant in the lawsuit, which alleges that Tonopah officers attempted to prevent SolarReserve from installing its own representatives on the management board. The suit asks the court to enable SolarReserve to reestablish representation on the board and to nullify certain actions taken by the current board. It also requests legal costs and other financial relief.

Berkshire Hathaway Energy subsidiary Nevada Power Co. in June told Tonopah that it wanted to exit its power purchase agreement with Crescent Dunes because the 110-MW plant failed to produce the requisite energy levels required under the agreement. In 2017, the project had a capacity factor of just 4%, the lowest in an S&P Global Market Intelligence analysis of U.S. solar projects larger than 100 MW.

Attorneys for SolarReserve CSP Holdings LLC declined to define the company's relationship with SolarReserve, directing requests to SolarReserve's legal counsel, who did not respond to an email. The DOE did not return a request for comment.

SolarReserve has a 36.6% stake in the plant, as does ACS SA, a construction company based in Spain, according to S&P Global Market Intelligence data. Banco Santander SA, a Spanish banking institution, in April received approval from FERC to exit its indirect 26.8% passive equity stake. It sold that stake on undisclosed terms to Cobra Energy Investment Finance LLC, an affiliate of ACS SA. (FERC docket EC19-56).

SolarReserve's lawsuit alleged that the DOE orchestrated the resignation of Tonopah management board officers associated with SolarReserve who had "intimate knowledge of the Crescent Dunes Project and improper actions taken by DOE." The DOE then installed its own handpicked managers, along with representatives of FTI Consulting Inc., to serve as the de facto officers of the Crescent Dunes project, the lawsuit said.

The concentrating solar generating facility uses thousands of heliostats, or motor-driven moving mirrors, to collect and focus the sun's energy to heat molten salt flowing through a 640-foot tall solar power tower. The Obama administration backed the project through the Federal Financing Bank under the Title XVII loan program, which helps finance innovative projects that avoid or reduce greenhouse gas emissions.