REC signs letter of commitment with PUD

Senior veep: 'Still some issues'

MOSES LAKE — The Grant County Public Utility District and a company whose Norwegian board is eyeing the area for a major expansion made moves toward solidarity.

The Norwegian parent company of REC Silicon is expected to make an announcement May 23 regarding an expansion valued at close to $600 million. The board will decide whether to locate the expansion at its plant in Butte, Mont., overseas or at its plant in Moses Lake.

In April, REC Silicon president Goran Bye said it was "overall probable" that the expansion would locate in Moses Lake, and he and REC Silicon senior vice president Tor Hartmann are working under the assumption the expansion will be in Moses Lake.

But at the time, REC Silicon and the PUD were still under negotiations to resolve the company's lack of a long-term electricity contract in the area. Bye said in April the company likes the service with the district and has had a good relationship with them for 20 years, but it's "pretty hard to put investment proposals in place for hard-nosed businesspeople when you don't have a long-term contract for your major raw material."

This week, REC signed a letter of commitment with the PUD, indicating that the company plans on doing engineering and preparation needed to ensure that substations are in place and power is available for start-up of the expansion.

"This is a schedule-driven event and we committed some funds," Hartmann said during a phone call from Norway Thursday morning. "It does mean we've increased our level of interest in Moses Lake."

Hartmann said that if REC did not commit to the substation, it would not have power available for the scheduled start-up.

"It costs some money for us to do that, and we're willing to take that risk," he said. "It's important to note there are still some issues we are trying to resolve with the PUD. We have taken a step of good faith to move forward."

Grant County Economic Development Council executive director Terry Brewer explained that signing the letter of commitment and paying the required financial contribution means the PUD puts an order in for the transformer and begins the engineering work on the substation and other electrical planning that has to be done, ready in time for REC's projected in-service date, if they go forward with the expansion here. Brewer believes if the European board elects not to move forward with the project or to locate the expansion elsewhere, the process will stop.

"If the project was going to go forward in Moses Lake and have power available at the time they needed it, they needed to sign that letter of commitment now, because it's a lengthy process for the PUD to procure equipment and build a substation," Brewer said. "I think REC just said, 'We better do this now.'"