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Gird Your Coins: Another Guaranteed Government Loan ‘Green Jobs’ Biz in ‘Financial Turmoil’

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By Doug Powers  •  October 3, 2011 12:30 PM

**Written by Doug Powers

Last spring while visiting Nevada Geothermal Power, Sen. Harry Reid said “this project is exactly the type of initiative we need to ensure Nevada creates good-paying jobs.” Notice Reid didn’t say the geothermal power company was exactly they type of initiative Nevada needed to create power.

From the New York Times:

In a remote desert spot in northern Nevada, there is a geothermal plant run by a politically connected clean energy start-up that has relied heavily on an Obama administration loan guarantee and is now facing financial turmoil.

The company is Nevada Geothermal Power, which like Solyndra, the now-famous California solar company, is struggling with debt after encountering problems at its only operating plant.

After a series of technical missteps that are draining Nevada Geothermal’s cash reserves, its own auditor concluded in a filing released last week that there was “significant doubt about the company’s ability to continue as a going concern.”

Don’t worry though — worst case scenario: It won’t cost as much as Solyndra:

The amount of money the federal government has at stake with Nevada Geothermal — a loan guarantee of $79 million plus at least $66 million in grants — is much smaller than the $528 million investment in Solyndra. There have been no allegations of wrongdoing by Nevada Geothermal or its Blue Mountain, Nev., plant.

Pocket change.

When asked about the company’s viability, NGP’s CEO didn’t exactly ooze a Churchillian level of confidence and resolve:

Executives of the company express confidence that they can recover and say that the government investment is not at risk, despite the challenges they face because of a high debt load and lower-than-expected energy output at their plant.

“We are here,” said Brian D. Fairbank, the chief executive, who like other company executives works out of Vancouver, British Columbia, where Nevada Geothermal Power has corporate offices. “We’re doing O.K.”

The market doesn’t seem to agree.

But at least none of those troubles will surprise the administration:

Obama administration officials knew about most of these difficulties before the Energy Department agreed in September 2010 to partly guarantee a second major loan to Nevada Geothermal, worth $98.5 million.

Nevada Geothermal executives, meanwhile, are working to renegotiate their $91 million, high-interest loan to avoid a default, which could come as soon as December.

Harry Reid’s pitch for the loan was of course all about Joe Biden’s favorite three-letter word: “jobs.” According the Dept. of Energy’s website, the project has “saved or created” 14 permanent jobs, and even those now sound as if they’re at risk.

The government’s “green jobs” initiative will likely go down in history as the world’s most expensive temp agency.

**Written by Doug Powers

Twitter @ThePowersThatBe

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