Drama At First Solar (FSLR)

First Solar gets a lot of love and scrutiny from investors andmembers of the media. And lately, there have been a series of reportsand speculations about changes to some of First Solar’s solar farmprojects under development in western United States. 

So we asked First Solar’s spokesman Alan Bernheimer about some ofthese reports.  Over several emails, he confirmed some details andrefuted others. Here is an update about the various projects that arebeing bandied about: BLM Canceled Four Projects In California?: Aresearch note from Wedbush Securities said the federal Bureau of LandManagement appears to have canceled right-of-way applications for fourprojects by First Solar, though First Solar still has time to appealthe federal agency’s decision for two of the projects.

The first two projects are called Amber (500-megawatt) and Jasper(500 megawatt). The other two that could be reinstated are Ruby(1-gigawatt) and Onyx (585-megawatt), according to Wedbush (via TheStreet.com). The research note sought to emphasize the difficulties of developing large-scale projects in the United States.

First Solar said the projects are not dead. "It’s premature to saythat any First Solar project applications have been cancelled by theBLM," Bernheimer said. He did say that the company has received lettersfrom the BLM asking First Solar to show that it’s continuing to work onthese projects in order to keep the applications current.

"First Solar is reviewing its project portfolio to determinepriority based on a variety of factors, including near-termtransmission capacity and other potential constraints. If we do decideto withdraw from any projects, it will be in order to focus our workwith BLM district offices on higher priority projects that have fewerconstraints, freeing up both First Solar and BLM resources to devote tonearer-term projects," Bernheimer said in an email.

About That 55-megawatt Project with the Los Angeles Utility: TheLos Angeles Department of Water and Power supposedly has dropped a55-megawatt project on land owned by LADWP in Imperial County, aproject that First Solar announced in August this year.

The Los Angeles Times quotedattributed the cancellation decision to LADWP’s acting general manager,S. David Freeman.  Freeman said the cost of transmitting theelectricity from the solar farm around the town of Niland to LosAngeles is too high, a comment he made when a Los Angeles City Councilcommittee held a hearing last week.

First Solar said the project hasn’t died. Bernheimer, who declinedto comment on the LA Times article, said LADWP is actually waiting fortransmission studies from the Imperial Irrigation District, after whichthe utility plans to submit the project for the Los Angeles CityCouncil’s approval. "We look forward to working with LADWP tosuccessfully complete the Niland project," Bernheimer said.

LADWP has signed a 30-year agreement to buy power from the solarfarm, but the agreement doesn’t cover the transmission costs,Bernheimer added.

A spokeswoman for the LADWP told us today that Freeman stands by hiscomment from last week. This disagreement indicates that politickingand negotiations among LADWP, First Solar and the city council areongoing.

A 150-megawatt Project in Colorado: A local newspaper,  The Pueblo Chieftain,reported that First Solar has withdrawn an application to build a150-megawatt solar farm on BLM land in Colorado’s San Luis Valley.

That is true. First Solar opted not to continue with the project, which came as part of its $400 million acquisition of OptiSolar’s project pipeline in April this year, in order to focus on those with higher priorities, Bernheimer said.

First Solar has never announced any customers for power that would’ve been generated from this project.

Expanding and Speeding Up the Desert Sunlight Project? First Solar first talked about the Desert Sunlight project in August this year when it announced that it had signed a deal to sell electricity from the 250-megawatt project to Southern California Edison.

The project, to be located on federal land in California’s Riverside County, actually covers 550 megawatts and has received a "fast track" statusby the BLM, noted by Mark Bachman at the Pacific Crest Securities in aresearch note last week. If the permitting process goes smoothly, FirstSolar could start building the project next year instead of 2012, as ithad previously said.

First Solar is looking for a buyer for the remaining 300 megawatts, though Bernheimer declined to talk about it.

And by the way … a bill introducedby Sen. Dianne Feinstein earlier this week to prevent solar and windfarm development in parts of the Mojave Desert has promptedspeculations about which projects would cease to exist as a result ofthis political move.

The legislation would create two national monuments covering roughly1.1 million acres of land. It also aims to expedite solar and wind farmprojects on private and other public land.

At least two developers, BrightSource Energy and Tessera Solar, already have canceled projectswhen they found out about Feinstein’s push to create the nationalmonuments. The one ditched by Tessera Solar is called Solar Six, and itwas in the early stages of development when the company decided tocancel it, said Tessera spokeswoman Janette Coates via email. 

The bill won’t affect any project being developed by First Solar, Bernheimer said.



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