U.S. BLM rejecting Goldman Sachs-owned Cogentrix Solar's applications to develop solar power projects on public lands in Nevada; under BLM policy, company could 'squat' on land without real plans to develop it until applications rejected or withdrawn
August 22, 2011
– Federal land managers are rejecting a Goldman Sachs-owned company's applications to develop solar projects on public lands in the sun-drenched Nevada desert; years after the subsidiary filed more claims to build glimmering solar farms than anyone else.
For years Goldman's Cogentrix Solar Services, LLC held exclusive rights to develop solar plants on nearly as much federal land in Nevada as all other companies combined - even though the firm had neither written plans nor inked agreements with utilities to buy the power they proposed to make.
An Associated Press investigation last year found that the U.S. Bureau of Land Management's first-come, first-served leasing system allowed companies, regardless of solar industry experience, to squat on land without any real plans to develop it. Under that system, the first company to file a claim on a site then held exclusive access to it until the application was rejected or withdrawn.
Cogentrix, which mostly operates coal-and-gas-fired power plants in the eastern U.S., had no solar development experience prior to filing its applications and never produced plans for the vast swaths of land on which it had filed claims.
This week, the BLM's renewable energy projects manager for southern Nevada, Gregory Helseth, said he was in the process of rejecting Cogentrix's applications. This would re-open the lands to other developers that had until this point been blocked from accessing the sites because of Cogentrix.
"We have just about wrapped up rejecting the last of the Cogentrix applications," said Helseth. "(The company) never showed a desire to move forward on their solar applications. They didn't turn in the required paperwork, or show an interest."
BLM's staff was inundated with hundreds of applications for solar claims, leading to years of delays as the agency kept its focus on oil and gas leases. Now, even after years of planning and environmental review, not one megawatt of solar power is being sent to the grid from the millions of acres of publicly owned desert in the Southwest.
While many companies filed claims on public lands that never became real projects, Cogentrix was the most prolific. At one time the company had locked up nearly half the land for which applications had been filed in Nevada, despite a dearth of plans or utility agreements. To date, not one of the company's proposed projects has been approved by BLM.
Michael DuVally, a Goldman Sachs spokesman, declined to comment on the rejected applications. He said Cogentrix had turned its attention to another solar project on private land in Colorado.
"Cogentrix is in the process of developing a project in Colorado that, once it's done, will be the largest high concentration solar photovoltaic generation project in the world," he said. That 30-megawatt plant received a $90.6 million loan guarantee from the U.S. Department of Energy.
BLM's Helseth said, before rejecting the applications, he tried repeatedly to get the company to file plans for its sites in Nevada or withdraw its applications so other developers could begin planning.
These kinds of delays come at a time when the nation is trying to quickly diversify its energy supply, in part to meet the demand of a growing renewable energy market in California, which passed the nation's strictest climate change regulations.
Interior Secretary Ken Salazar has begun reforming the BLM's leasing system, and has approved 12 large scale solar power plants on public lands. In December, the first utility-scale solar power plant - developed by Tempe, Ariz.-based First Solar - is expected to begin sending energy into the grid from southern Nevada. It will provide power for about 9,000 homes.
"(W)e are finding opportunities to fine tune our existing program in ways that discourage speculation and project proposals in areas that are not well suited to solar energy development," said David Quick, a spokesman for BLM in Washington DC. "And to concentrate our efforts on those projects that appear most likely to be built."
Quick said the BLM in January sent out a new directive to its field offices meant to weed out land speculators, especially applications "that could hinder other applicants with serious interests in the potential development of solar energy resources on the public lands."
The agency has also changed its approach to renewable energy projects: the government is now conducting environmental studies to determine which lands are suitable before offering them for lease.
Under the old system, companies chose where they wanted to build before the government was required to determine whether the site was suitable. This led to many of the problems and delays that have dogged renewable energy expansion on public lands.
Solar industry experts said BLM's rejection of Cogentrix's Nevada applications is a sign the government is making progress.
"You have got to get rid of the speculative applications and differentiate between the serious and not-so-serious projects," said V. John White, executive director the Sacramento, Calif.-based Center for Energy Efficiency and Renewable Technologies, a clean-energy advocacy group.
"This is absolutely a step forward - it saves money and allows government resources to be spent on processing serious applications that will result in projects getting built," he said.
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