Over $185 million senior secured financing that will support construction and operation of NedPower Mount Storm LLC was arranged in November 2007. Dominion Power and Shell WindEnergy have joint 50/50 ownership of the project. Interestingly the original cost was estimated at $300M alone, but some of that missing funding is coming from the US government subsidies via the rate subsidies and tax incentives. However with the weakened dollar to the Euro and the purchase of Spanish turbines from Ganesa along with the jump in diesel prices effecting construction costs and transportation something would appear to not be all adding up. Public disclosure of the current project budget has not happened.
"Fortis and BBVA will structure, underwrite and syndicate the construction facility, which will be converted into a 15-year senior secured term loan at the onset of commercial operations scheduled to begin in the first quarter of 2008. The facilities launched in November 2007".
Nedpower have been trying to claim the Phase 1 of construction is now complete - however recent pictures from the site show that this is not the case. Clearly also commissioning and testing with the Mt Storm power plant to facilitate power switching has not yet started. They have also yet to comply with FAA regulations on hazard warning systems for the 390' high structures. No filing has been announced by the FAA and the current hazard lighting consists of only two small red lights, one at either end of the line of turbines.
As a partner Dominion Power seem to have a struck a sweet deal with the financing including "The project has entered into two identical power swaps, fixing the electricity price for five years". This means that as the price of electricity goes up the project will be getting the same fixed price that is less than market value for power being generated and Dominion will pocket the difference. This will further erode the viability of the project. On the other hand it is harder to sell wind power generated electricity on the regular daily spot market for the grid because of the uncertainty of generation. So having a guaranteed buyer is probably the attraction for Nedpower.
But then project viability and energy generation don't appear to be considered as priorities by those sponsors of the project. The intent appears to be farming out as much profit for themselves and their partners and minimizing the costs - as can be seen by their willingness to wreak a public road with their heavy construction vehicles and then dodge having to pay to replace the road (the PSC left it open for the project to negotiate "arrangements" with the WV DOT but these have not been made public).
So who exactly is funding the Mt Storm project? "BBVA is one of the top four banks in the Eurozone in terms of market capitalization and is one of the main international banking groups in Latin America with leading subsidiaries in Argentina, Chile, Colombia, Mexico, Peru, Puerto Rico and Venezuela. The bank is also present in the world's main financial centers through its New York, London, Frankfurt and Tokyo branches and representative offices.
Fortis Merchant and Private Banking is a division of Fortis, a global financial services firm".
As with the purchase of original Spanish turbines we see US tax dollars and revenues being syphoned off overseas - now also to offshore banking groups in interest payments and revenue agreements. Interest alone on the $185M loan is likely to be in the range of $9M+ annually.
Would someone please mind explaining how this is all helping the people of Grant County and West Virginia?