Exergy Development Group has ended its efforts to build the 116-megawatt package of wind farms this year.
The renewable-energy developer gave up contract rights to build the wind generation plants in Twin Falls, Lincoln and Bingham counties, according to a filing this week with the Idaho Public Utilities Commission. The filing came as stories in bicycle-racing publications reported that the company, which sponsors several bike races and the Exergy racing team, is behind in paying its bills.
CEO James Carkulis said Thursday that the decision to back out of the Idaho projects, in which Exergy had already invested millions of dollars, was a blow. But it won’t destroy the business, he told the Idaho Statesman.
“We’re going to be here next week and next year,” Carkulis said.
Exergy has $1.5 billion in wind, solar, biofuel and biomass projects across the country, he said.
Carkulis said he decided to halt the projects after it became clear Exergy would not get them done by the end of the year, which the company had to do to obtain an up-front payment of a federal investment-tax credit that is due to expire Dec. 31.
But the company’s problems began last year, when the Idaho Legislature allowed a renewable-energy sales tax rebate to end.
They deepened when Idaho Power filed a series of proposals earlier this year that would allow the utility to shut off wind plants during times of low demand and shift to Idaho Power the renewable-energy credits that alternative-energy developers can now sell for millions of dollars.
“Given the scope and breadth of the current PUC filings, it was clear we could never finish off our projects this year,” Carkulis said.
Carkulis said an independent expert hired by a bank estimated the curtailment proposal alone could cut out 10 to 20 percent of the revenues the wind farms could make over 20 years.
“That scared lenders,” Carkulis said.
But Carkulis said he expects a major payday in the next month on another project. An 18-turbine, 36-megawatt wind farm in Blue Earth, Minn., is “literally constructed,” he said, and he expects to complete it by the end of September. Exergy also has a 400-megawatt wind farm ready for construction in Texas, he said.
In a new settlement with Idaho Power, Exergy agreed to return a letter of credit Carkulis had given the company as security in case the wind farm was not completed on time. The rest of the details were confidential, according to the filing. The PUC must approve the settlement to be final.
The utility has been telling regulators, lawmakers and their customers that it has been forced to buy more wind power than it needs under federal law. Idaho Power expected to have the capacity to generate 793 megawatts a year from wind by the end of this year, but now it will be more like 600 megawatts.
“Things will be much easier,” said Mark Stokes, Idaho Power planning manager. “It’s an improvement of a bad situation.”
Exergy still has contracts to sell power from anaerobic digesters it is building at two dairies in Twin Falls County. It also has wind farms in development in Maine and Argentina.
Velo News, a online bicycling publication, ran a story Wednesday that expanded on a CyclingNews.com story the day before reporting several vendors and partners in the bicycle racing community had not been paid by Exergy.
Exergy is known in the Treasure Valley for its sponsorship of the annual Twilight Criterium bicycle race in July. In May, the company sponsored the inaugural Exergy Tour, a five-day women’s professional cycling event in Boise. Exergy also sponsors two-time U.S. Olympic gold medalist Kristin Armstrong’s team. Armstrong’s husband, Joe Savola, said she has been paid everything she was owed.
Exergy’s other cycling sponsorships include USA Cycling, USA Pro Challenge, Amgen Tour of California, Larry Miller Tour of Utah, Nature Valley Grand Prix and the Exergy women’s team.
Carkulis said Exergy will pay what it owes for sponsorships when he completes his next projects.
“We are behind on a few of our commitments and that’s it,” he said. “Ten weeks. That’s how far we’re out on these cycling invoices.”
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