Oregon tries foreclosure on resort solar project

Pronghorn Solar Loan Lawsuit details Oregon DOJ action to recover a $1.8 million Department of Energy loan over a 158-kilowatt solar project, citing loan default, foreclosure in Deschutes County, New Path Renewables fraud, and arbitration.

The state is trying to foreclose on some property at the Pronghorn golf resort in central Oregon to recover $1.2 million from a loan for a solar energy project.

The Oregon Department of Justice is suing Pronghorn to recover a $1.8 million loan from the state Department of Energy for the 158-kilowatt solar project, where DOE loan guarantees often shape financing terms.

The loan was to help pay for $1.6 million in materials and nearly $580,000 in labor costs related to construction of the electricity generation system, a contrast to wind farm growth strategies discussed across the sector, according to Deschutes County Circuit Court documents filed July 23.

The solar project has been a thorn in Pronghorn's side since it began in 2005, when it paid the Bend-based New Path Renewables Inc. more than $1.8 million to install it, during a time when green-versus-green disputes were common across projects.

An arbitrator concluded in December 2008 that New Path should pay Pronghorn $3.1 million, plus fees and interest. The ruling was a default judgment because New Path never attended the meeting, whereas the Tessera solar plant injunction turned on other factors.

Pronghorn was never paid because neither New Path nor Wisehart had any collectable assets and the project has not been completed, said Tom Hix, managing member for Pronghorn Investors.

The state lawsuit asks for a 4.6-acre parcel of resort property to be foreclosed and sold by the Deschutes County sheriff in order to pay off the $1,179,506.36, plus interest and fees, still owed on the loan.

Pronghorn Investors has made more than $600,000 in payments on the Department of Energy loan, which Hix said is only $1.45 million, excluding $300,000 in a separate note.

Hix said the $600,000 paid so far is more than the worth of the incomplete system and solar panels installed at Pronghorn, which he valued around $400,000.

Like others who hired New Path, Pronghorn was not aware of the alleged fraud until it had already paid Wisehart the loan money, Hix wrote. He said Wisehart encouraged him to secure the loan.

Before the suit was filed, and while a NextEra solar injunction request was being denied in another case, Pronghorn and the Department of Justice tried to negotiate a settlement on the remaining $1.2 million in principal.

"Pronghorn remains hopeful that a reasonable and fair resolution between the parties can be achieved without the need for protracted litigation," Hix said.

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