Las Vegas Sun

May 28, 2015

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STATE GOVERNMENT:

Proposed solar contract between state, politically connected company raising questions

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Steve Marcus

Nellis Air Force Base hosts one of the nation’s largest solar photovoltaic systems. The state is considering switching to solar power for a significant number of its buildings and facilities.

Gov. Jim Gibbons

Gov. Jim Gibbons

The state is considering switching to solar power for a significant number of its buildings and facilities, even though critics question whether the change would save taxpayers money.

A politically connected Sparks company would have the first right to develop solar projects on 53 government properties and sell the generated energy back to the state, under the proposal Nevada officials are evaluating.

The four-year deal with GA-SNC Solar could spur $300 million in private investment, according to the state energy office. GA-SNC Solar is a partnership between international solar company Gestamp Solar and Sierra Nevada Corp., a Northern Nevada defense contractor that has been a heavy contributor to elected officials, including Gov. Jim Gibbons.

The company’s competitors and elected officials have expressed concerns about the deal. A competing bidder has appealed a state committee’s recommendation that GA-SNC Solar’s proposal receive the highest score among eight proposals. Another competitor said the company’s price estimates are significantly higher than electricity available from NV Energy.

A decision on the agreement between the state and GA-SNC Solar was delayed this week by the Board of Examiners, which is made up of the governor, attorney general and secretary of state. Attorney General Catherine Cortez Masto requested a decision be postponed until her consumer advocate can evaluate the costs.

Commercial Solar Services, a competing company in Reno, argued in a letter to the state that the price of energy under GA-SNC Solar’s contract, at 17 cents per kilowatt hour, would be 54 percent higher than what the state pays NV Energy.

To bolster its argument, Commercial Solar cites a contract that GA-SNC Solar-partner Sierra Nevada secured for a 2.6-megawatt solar project at a Nevada Army National Guard facility. According Commercial Solar Services’ letter, the National Guard is paying 18 cents per kilowatt-hour from that project, compared with the 11 cents per kilowatt-hour it paid before the installation.

Energy Director Jim Groth, who served in the Guard before Gibbons appointed him the state’s energy director, said Commercial Solar’s numbers are incorrect and that the state will save money in the long run under GA-SNC Solar’s contract.

“The truthful crux of the matter is that whiners in Nevada spew baseless, unfounded data and the press ... gives it merit,” Groth said in an e-mail to the Sun.

Assemblywoman Debbie Smith, D-Sparks, incoming chairwoman of the Ways and Means Committee, said she wants to make sure “all contracts are open and fair.”

“We better make sure any contract or any new program we’re implementing is saving the state money, certainly not costing the state money,” she said.

GA-SNC Solar would have the right of first refusal to convert to solar power a variety of state buildings in Northern and Southern Nevada, including in parks, Department of Motor Vehicles offices, and higher education and state office buildings.

Ties between Sierra Nevada and Gibbons and his then-wife, Dawn, made headlines early in his term when it was revealed Sierra Nevada had paid $35,000 in consulting fees to the former first lady while Gibbons was in Congress helping the company secure defense contracts.

A representative of Sierra Nevada said the proposed contract with the state went through a competitive bidding process evaluated by an independent panel of more than 10 representatives from Las Vegas and state agencies. Michelle Erlach, Sierra Nevada corporate director of renewable energy, said the state should consider approving the agreement in a special meeting this month to keep momentum on the project going.

“We’re pushing it through because we’re a business, we’re all about making the economy run and move forward,” Erlach said. “The timing is not driven by politics. Rather it’s driven by financial, logistic and employment concerns to further the state’s policy on solar.”

The company plans on getting informal approval from Gov.-elect Brian Sandoval, who takes office Jan. 3. “Even though a formal approval is not required, we are going to get a preliminary buy-in on the concept ... from the next administration,” Erlach said.

Groth, who was not reappointed as energy director by Sandoval, said Gibbons had little involvement with the selection of the Sierra Nevada partnership.

The agreement would help bring renewable energy to the state, he added. Each agency would be able to negotiate an agreement to buy back the power from the company, he said. Those contracts would have to be approved by an executive branch board and a legislative panel.

He dismissed concerns about the cost, saying agency directors are fighting for every dollar right now, and wouldn’t agree to energy contracts that cost more money.

“A director is sure as hell not going to engage in a decision that will cost taxpayers more money right now,” Groth said.

Cortez Masto has asked her office’s consumer advocate, Eric Witkoski, to establish whether power purchase agreements save the state money. That review was to be completed by Friday.

Tuesday’s meeting of the Board of Examiners, which approves contracts, was the last regularly scheduled meeting for Gibbons, who lost the June primary to Sandoval. Gibbons could, however, call an emergency meeting of the board.

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