Atlantic Richfield Co. has sold its money-losing California solar power plants--including the world’s largest photovoltaic plant--to a small group of New Mexico investors, ridding itself of its last remaining solar power assets.
John Kusianovich, president of Genesis Realty in Albuquerque, N.M., and the investor who led the negotiations with Arco, said Thursday that the investors agreed to pay more than $2 million cash for the plants, which operate as Arco Solar Power Production Inc. The sale closed last Friday.
The three plants, including one that was closed several years ago, were not part of Arco’s previously announced sale to West Germany’s Siemens conglomerate of its Arco Solar Inc. division, a leading manufacturer of photovoltaics, or light-to-electricity cells.
The New Mexico investors include Stephen Baer, president of Zomeworks Corp., a solar energy equipment manufacturer in Albuquerque; Michael Elliston, who runs Elliston Development Inc., and Richard Dant, a developer of housing emphasizing the use of solar power. Elliston and Dant are also investors in privately held Zomeworks.
The sale was in keeping with Arco’s strategy of divesting itself of assets not related to its core oil and gas businesses, and the plants were the last of Arco’s solar holdings to be sold.
Siemens, whose estimated $30-million to $50-million deal to buy Arco Solar is still pending, did not buy the power plants because it was interested only in Arco’s solar cell manufacturing operations, observers said.
The power plants lost money for Arco, but Kusianovich said his group would do better because of its lower overhead. The investors bought Arco’s one-megawatt Lugo solar plant near Hesperia, Calif., built in 1982, the 6.5-megawatt Carrizo Plains power plant in San Luis Obispo County, built in 1983, which Arco calls the largest photovoltaic power plant in the world, and the defunct plant near Taft, Calif.
The investors, acting under the name Carrizo Solar Corp., will continue to operate the Lugo plant, which sells electricity to Southern California Edison, and the Carrizo Plains plant, which sells electricity to Pacific Gas & Electric, for at least four more years, said Holiday Baer, secretary and treasurer of Zomeworks and Stephen Baer’s wife.
“Certainly Steve Baer has the engineering knowledge to do so,” said Robert O. Johnson, an industry consultant and vice president with Strategies Unlimited in Mountain View, Calif.
The Arco plants differ from other, larger solar plants that use the sun’s energy to heat water to power electrical generators, and instead rely on special cells that convert sunlight directly into electricity.
The two plants employ a total of just three people. The investors will dismantle the third plant and sell the parts.
Zomeworks, with annual sales of $500,000 to $600,000, was founded in 1969 and makes solar trackers--platforms that follow the sun’s course through the sky--Holiday Baer said. Solar cells are mounted on the platforms to generate electricity.