Disgruntled unions drop solar lawsuit in Nevada
BY Frank Armand Albano /Feb 5, 2007
Source: Las Vegas Business press
http://www.lvbusinesspress.com/articles/2007/02/05/news/iq_12319240.txt
Solargenix Inc. can now hire workers from El Salvador and Mexico, as well as out-of-state workers at less than the union pay scale. The company will also get to keep its $15 million tax-incentive package from the Nevada Commission on Economic Development. The AFL-CIO filed suit last month, claiming that Nevada Solar One, the company’s solar power project in the Eldorado Valley, had breached the agreement that had guaranteed it the tax breaks. Solargenix, formerly Duke Solar Energy, is now owned and operated by Spain’s Acciona SA.
Solargenix reportedly poured $150,000,000 into the project. When it’s finished, the Solargenix project should power between 18,000 and 25,000 homes. Nevada Power is buying the entire output of Solar One. In return for the grants and tax breaks, the company had agreed to hire 350 local workers for 20 months during construction, plus two-dozen more once the plant was operational.
MONEY FOR NOTHING?
The Public Utilities Commission also granted Solargenix a 16 cents-per-kilowatt-hour rate, far above the normal 5 cents-per-kilowatt-hour, in order to make the deal pencil out. Ratepayers will pay that added cost while not getting anything in return, such as jobs and taxes for schools, according to AFL-CIO Executive Secretary Danny Thompson.
The unions had tried unsuccessfully to persuade NCED to withdraw its $9 million tax break and $6 million in other incentives. While NCED “dragged its feet” according to a union affidavit filed in the case, “months went by” and all the union got from NCED was a letter saying, “We are looking into the matter.”
That was not good enough for union officials. Next, they tried to get the PUC to void the Solargenix deal, says David Jones, business manager of the International Brotherhood of Electrical Workers Local 357, whose members were “promised jobs for life, installing the solar panels.” When the PUC ignored the union, said Jones, “we had no choice but to go to court.”
The unions sued to get what they thought had been promised when Solargenix was given $15 million to underwrite the solar power farm near Boulder City. The end of this legal imbroglio came swiftly, though, as the AFL-CIO’s San Francisco-based lawyer, Andy Kahn, filed notice to dismiss the unions’ case without penalty or cost to the named defendants, Solargenix and the NCED.
A CHANGE OF RULES
The union suit was booted because the commission changed its rules. NCED Executive Director Tim Rubald says the body wrote temporary regulations last November to ease requirements for companies seeking tax breaks in Clark County. “They (NCED) changed the law so we couldn’t sue them,” said Thompson. Rubald was unmoved: “They could’ve gone forward with their lawsuit.”
The Nevada attorney general has issued an official opinion saying that the relevant statute and the regulations that had appeared to govern the development deal and tax breaks were in conflict. When that happens, the statute prevails. The union had sought a writ to compel the government to force the company to perform its end of the bargain. That suit is now dead.
“We’re glad it’s over. All the union wanted was not to pay for our legal bills and we accepted,” said Rubald. “We’re going to lose this one,” conceded Bob Nard, of Nevada’s Central Labor Council, “but we sent a message for the next time.”