The Inspector General said Acciona should repay $2.1 million of a $67.9 million grant

Treasury cash grant update
Chadbourne & Parke LLP Keith Martin
Excerpts from original

Inspector General
The Treasury released five reports in mid-October on inspector general audits of two wind companies and one solar company that received Treasury cash grants. The inspector general asked the companies to repay amounts ranging from several hundred dollars to $2.1 million.
Two of the reports involved two wind farms that E.On Climate and Renewables North America built in Texas. The projects are the 197-megawatt Inadale wind farm and the 249-megawatt Pyron wind farm.
The other three inspector general reports involve grants paid to Acciona and eSolar.
The inspector general took issue with $117,497 in costs out of $19.5 million claimed on a five-megawatt solar thermal facility that eSolar built in Lancaster, California. The company applied for a Treasury cash grant on the project in September 2009 and was paid the grant in late February 2010. In November 2009 while the grant application was pending, it settled a claim against a contractor, which reduced the cost of the project by $80,285, but it did not update its grant application. The developer did not dispute the inspector general report, but said it has accrued other costs exceeding the adjustments since the grant application went in. If the company spent more on new capital improvements, it may qualify for an additional grant. However, the amounts must be new spending after the original application was filed. The Treasury will not pay an additional grant on costs that could have been included in the original application.
Turning to Acciona, the inspector general said Acciona should repay $2.1 million of a $67.9 million grant the company received on its EcoGrove wind farm in Illinois. The inspector general said the company should not have claimed a grant on $5.3 million in interest charges that one Acciona entity that owned the project paid another Acciona entity that supplied the turbines for a delay in paying for the turbines. The inspector general said roughly 40% of the interest claimed by Acciona supposedly accrued before the turbine supply agreement was signed. The inspector general also denied another $831,160 in costs for an “extended warranty” on the turbines. The Treasury does not allow grants to be claimed on the costs of extended warranties.
Unlike the other developers who agreed to repay the Treasury, Acciona said it does not agree with the conclusions. The Treasury cash grant team told the inspector general that it needs more time to evaluate Acciona’s arguments before deciding the company should repay the money.
In the last of the five reports, also relating to Acciona, the inspector general asked for $7,277 back out of a $2.9 million grant paid on the Nevada One solar thermal project. Acciona said it was willing to adjust, but had other costs that exceeded the adjustment on which it could ask for a grant.

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