That’s a good thing IMHO.

And they’re protecting PG&E’s customers by spreading out the cost through federal the federal subsidies…

This has been the way of things in large, organized societies since they were created…How it’s done and to what end are key criteria…

The taxpayer, and buyers of US debt, have been subsidizing fossil fuels for more than 50 years. What about that ‘point’?

What about the huge environmental costs that have resulted from fossil fuel extraction, production and use? Who pays for those? Not the companies involved in the business, the public, the taxpayer, etc. to a very large extent.

What about other costs, such as the cost of wars and military presence and operations in foreign oil-producing countries, which has been a primary driver of US foreign policy for 50+ years?

In contrast, CVSR is domestically, locally produced and consumed clean, renewable electricity.

PG&E’s customers and people throughout the local areas, region, state, country and world will benefit over the long-term by adopting clean, renewable energy sources.

Indeed, by reading the article more carefully, you would find out that NRG clearly states that 90% of the cash grant for the CVSR project will go to repay the loan, thereby protecting and assuring that the DOE will not have to cover this conditional liability.

NRG is the primary source here. Their public statement in rebuttal has to be taken as the facts, at least unless it’s shown they lied, which I would deem highly unlikely in this case.

In contrast to the NYT piece, there is no misrepresentation, or critical omission, of facts here.

NRG does come out and openly state that the terms of the PPA are being kept confidential, claiming that the NYT significantly overstated the price. That’s a critical omission of fact, but one that they at least acknowledged openly…

NRG counters the NYT’s assertions, which are based on a what apparently is a poor financial analysis done by Booz, Allen.

Was Booz, Allen paid by the NYT to do the analysis? Or did they ‘volunteer’ it? Good questions that go to the heart of key issues related to good journalism…

Based on this, the NYT and/or Booz, Allen then omits critical information that would provide an accurate, much more complete representation of the project’s financing, slanting it in an editorial manner that apparently suits the paper’s editorial opinion…

I’d say that your comment, “Where is the journalism?” is clearly misdirected. You should be asking what kind of journalism the NYT is pursuing in reporting and publishing pieces like this.

If they justifiably want to raise questions about the pricing of PPAs and federal support, they have to at least strive to do so in an accurate and comprehensive manner based on as much accurate information as they are able to gather…

Labeling such pieces as ‘editorials’ would go a long way towards meeting a journalistic standard, as well, but it wouldn’t change the gross inaccuracies and misrepresentation in any event.

This doesn’t change the misrepresentation in the NYT article, however. In fact, it reinforces it. It boils down to the Treasury 1603 cash grant in lieu of tax credits…and the up-front cash is dedicated to repaying the debt, which is guaranteed by the government, thereby assuring protection of the gov’t as guarantor…

The time period is key. Yes, prices quoted then can seem high now; but prices have come down a lot in the interim….Perhaps the parties involved could or would include provisions for price adjustments over the project construction time period…

Are DOE loan guarantees limited to ‘innovative’ technology and projects?

This project should have never received a loan guarantee. There is nothing innovative about single axis tracking or weather feedback to the trackers.

Power Purchase Agreements executed in this time period received the prices quoted in the NY Time article. Is NRG’s definition of “significantly” 2% or 20%. Either way it is high priced power. On peak pricing in July 2011 were in the high $30’s or low $40’s. One third of the price paid in the PPA

Unusually it appears the NY Times got this one right

Yes, the $430 million is 30% of the project cost, as per the rules re investment tax credit.

Apparently, there’s a stipulation that 90% of the cash grant has to go to repaying the DOE loan, so they do not have a choice there.

An investment tax credit, which is what the Treasury 1603 grant accelerates in the form of an up-front cash payment, is actually tax money that companies avoid paying, not money given to them by the government. By taking the cash grant up-front, NRG’s uses up the tax credit and pays taxes going forward.

Thx for the link to the NREL calculator.

Gov’t subsidization of energy plants is nothing new and with power in particular being so regulated is actually the rule rather than the exception.

I’d rather public money go into renewable, clean energy plants than others…

“I have never seen anything that I have had to do in my 20 years in the power industry that involved less risk than these projects,” he said in a recent interview. “It is just filling the desert with panels.”

The price in the PPA may be confidential, but we know enough to figure the cost. Plug the interest rate (3.5%), the cost ($1600M/250MW = $6400/kW), a capacity factor (~25%), and the fuel cost ($0) into
http://www.nrel.gov/analysis/tech_lcoe.html
and see what you get. However, NRG may be correct that PG&E’s ratepayers will pay less than 15¢/kW-h (=$150/MW-h), with the balance being paid by California and US taxpayers, through the various subsidies such as the 1603 program. Which was kinda the point of the NYTimes’ article.

Another hit piece today…this time from ticonderoga…it may be the seasonally slowest part of the year, but many companies in many countries (different weather patterns) are rushing to beat incentive deadlines…I wouldn’t short solar companies now…too much risk for too little reward.

What is surprising is, that per the article, NYT used financial analysis from Chris Dann at Booz Allen to justify their conclusions. The analysis has obvious flaws and any first year financial analyst could have corrected in 15 minutes. This leads me to conclude that the article intended to embarrass the government with outlandish comments based on flawed math.