The environment and its wellbeing has been a hot topic for the past few years and it doesn’t seem to be losing popularity. The effects of this trend are obvious from battery powered cars to green buildings. Following the clean energy movement is a huge Wyoming wind turbine energy project which some are concerned won’t be completed properly; this is when the advantages of surety bonds become clear.
Wasatch Wind of Park City, Utah has been awarded a wind energy project which includes the installation of 62-turbine’s near Glenrock, Wyoming; they were required to post an $18.8 million performance bond in order to begin construction. The bond was required by the Wyoming Department of Environmental Quality’s Industrial Siting Council (ISC) which is the state board that must sign off on the feasibility of large wind energy jobs. The 100-megawatt project will be built at two different but nearby locations.
Many local landowners and the Northern Laramie Range Alliance (NRLA) are worried about Edison Mission Energy’s financial condition – which has an agreement with Wasatch to build and run the wind project. According to the NRLA, Edison Mission Energy has a credit rating which is quickly weakening. This is when surety bonds come in to play.
In this case a contract bond (performance bond) was required of the contractor to secure the construction of this public project; it guarantees that the contractor will finish the job properly and according to the contract. Surety companies don’t write bonds for just anyone; sureties carefully look in to the financial health of the company and owners attempting to obtain bonds. The surety will then make an educated decision on whether to financially back them with a bond. In the end the surety bases their decision on whether they think the contractor can handle the world load at hand.
Should the company performing the work go bankrupt or walk off the job, the surety company who wrote the bond will step in and financially back the rest of the job to avoid complete failure of the project and the loss of public money. The surety will then go back to the ones who purchased the bonds for reimbursement. Whether the contractor performing the work honors the contract or not, the bond will help protect the public funds and make sure the job will get done.
“Wyoming’s Industrial Siting Division as well as a majority of the Industrial Siting Council agree that we have met the requirements of the law,” she said. “Therefore we are confident that the projects will continue to move forward.”
Being there is much skepticism surrounding this project, the bond that’s in place should help put some of the concerned minds at ease. With the protection of the bond, it will ensure that the wind energy project will be completed the way it was meant to be which is to the advantage of both Wyoming taxpayers and the environment.