$600 million expansion coming

MOSES LAKE — An expansion estimated at $600 million and 85 to 90 new jobs will indeed be housed in Moses Lake, it was announced today.

According to a press release from the Renewable Energy Corporation, or REC, headquartered in Oslo, Norway, the company has decided to more than double its production of polysilicon and commence construction of a third polysilicon plant.

The new plant is based on the proprietary technology that REC Silicon has developed for production of granular polysilicon. REC Silicon has carried out front-end engineering and design work since the summer of 2005, and has tested its new technology in a single half-scale pilot reactor, which has generated output which satisfies all of the company's quality and production criteria.

Based on the test results, REC will immediately commence on more detailed engineering and construction work for the plant that will be located in Moses Lake. Mechanical completion of the plant is expected by the end of the first quarter in 2008, with final completion and ramp-up of production in the third quarter of that same year.

The total capital requirement for the engineering and construction of the plant is estimated at $600 million, which is already fully funded under existing loan facilities and equity.

"It's good news, good for the company, good for the community," said REC Silicon senior vice president Tor Hartmann from Norway in a phone interview today. "A lot of positive things are going to come out of it."

Hartmann said an announcement is being drafted for employees of the Moses Lake plant, and added that the amount of construction work being done for the expansion would bring a lot of revenue into town.

"It's very gratifying to be selected for what's probably the largest new project in the state this year, and the Pacific Northwest region, for that matter," said Grant County Economic Development Council Executive Director Terry Brewer. "It just puts us on the map even further in the high-tech sector. A growing industry like this is going to be here for a long time, and I think there are chances for further value-added processing related to this as we go forward."

Brewer extended kudos to the entities that worked on the project for over a year, including the Grant County Public Utility District, City of Moses Lake, Grant County, Gov. Chris Gregoire's office, the state's department of Community, Trade and Economic Development, the Transportation Improvement Board and the Community Economic Revitalization Board.

"We went a lot of places and worked with a lot of people, and found them to be cooperative and very helpful to help us win this project, not only for Grant County but for Washington," Brewer said.

In April, REC Silicon CEO Goran Bye said it was "overall probable" the expansion would locate in Moses Lake, and that he and Hartmann had been operating under that assumption.

Earlier this month, 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. The letter followed negotiations with the PUD to resolve the company's lack of a long-term electricity contract in the area. The company is currently the top industrial user of electricity in the PUD.

Hartmann said at the time there were still issues to resolve with the PUD, but REC had taken a step forward in good faith with the letter. Hartmann said today resolution of those issues is still under way, as the company had been spending most of its time preparing for the board resolution.