Simulus Funded Nevada Geothermal Close To Going Bust
Back on June 26th, Obama cheerleading The Politico was rating “green” companies that received DOE loans, and determined that Nevada Geothermal Power (NGP) as a “mixed bag”
Nevada Geothermal: The company’s Blue Mountain project in northern Nevada received a partial loan guarantee for $98.5 million in 2010. The project is already generating power, but production levels have declined because the temperature of the rock formation the company tapped into has fallen unexpectedly. In SEC filings, Nevada Geothermal says it is working to resolve the problem. A pump failure in March was also a financial setback for the plant. In October, The New York Times highlighted the company’s financial problems and quoted an auditor’s pessimism about Nevada Geothermal’s ability to continue operating.
Not much of a mixed bag, but, we all understand that most media outlets work hard to protect Obama. Well, we’ve moved from “pessimism” to close to shutting down
(Washington Times) A geothermal energy company with a $98.5 million loan guarantee from the Obama administration for an alternative energy project in Nevada – which received hearty endorsements from Energy Secretary Steven Chu and Senate Majority Leader Harry Reid – faces financial problems, and the company’s auditors have questioned whether it can stay in business.
Much like Solyndra LLC, a California solar-panel manufacturer with a $535 million federal loan guarantee that went bankrupt, Nevada Geothermal Power (NGP) has incurred $98 million in net losses over the past several years, has substantial debts and does not generate enough cash from its current operations after debt-service costs, an internal audit said.
“The company’s ability to continue as a going concern is dependent on its available cash and its ability to continue to raise funds to support corporate operations and the development of other properties,” NGP auditors said in a financial statement for the period ending March 31.
“Consequently, material uncertainties exist which cast significant doubt upon the company’s ability to continue as a going concern,” the statement said.
If a company that is supposed to provide a service continuously needs outside money other than profits pumped in to keep it afloat, then it’s time to just let it go. The DOE loan guarantee served to prop up a previous loan from TCW Asset Management Co., rather than being a loan which could be generously be termed “seed money.” The whole “green energy” boondoggle is much like what was happening in the late 1990’s right before the big DotCom implosion: companies with no viable product and/or no way to make a profit and operate off those profits were constantly given money by investors to continue operating until the eventual big crash.
This is also the Air America radio model: they saw big outside money pumped in for political purposes, constantly expanding their market to cities around the country, never seeing viable operating cash flow in and always relying on that same outside money, till eventually their broadcasts started being dumped and replaced by programs advising people on how to power wash their decks (which got higher ratings) and going bankrupt in January 2010, ceasing all operations. And it looks like this is the way so many “green energy” companies are going.
NGP said it will hold its annual shareholders meeting July 24 in Vancouver, British Columbia, during which Mr. Fairbank is expected to discuss the firm’s debts, a recapitalization plan and steps that have been taken to reduce operating costs, including ending its registration and over-the-counter listings in the United States to eliminate the costs of Securities and Exchange Commission reporting requirements.
Sounds more like they are attempting to avoid having to show just how bad they’re doing.
More: some folks are wondering about donations to Obama from NGP. Well, even though the Nevada office of NGP is a “US wholly-owned subsidiary“, the company is actually Canadian, running out of Vancouver. So, with all due respect to Canada, the Obama admin. gave money to a foreign company which created no jobs. But
Since Nevada Geothermal’s parent corporation is based in Canada, it would be unusual to see political contributions from the company’s executives to American candidates. But the: Center for Responsive Politics also reports that Nevada Geothermal vice president of development and operations Max Walensiak: donated $500 to Harry Reid’s successful Senate re-election campaign.
Kai Anderson, a lobbyist for Nevada Geothermal’s partner corporation, Ormat Technology, is a former Senate aide to Harry Reid. Ormat’s CEO Paul Thomsen is another former Reid aide.
I’ve tried running the names of NGP’s team through Open Secrets, haven’t found anything. So, to be fair, it looks like NGP may be part of the 20% of “green” loan recipients who weren’t Obama donors.