Climate Etc. – understanding the cost of renewables

Climate Etc. readers requested a post on “the generation planning process to help them better understand cost issues surrounding the large scale addition and integration of renewable resources.

According to the author of the excellent analysis, “the major takeaway is that differing types of generating resources bring diverse sets of costs and benefits to the power system so that they cannot be compared solely based on a cost per Megawatt (MW) produced basis … it matters very much when energy is generated, where the energy comes from and how well it works to support the system

Please read the full analysis at this link – All megawatts are not equal

Posted in industrial wind cost, Renewable energy debate | Tagged , , , , , | Leave a comment

Another case of the green chicken coming home to roost?

You just knew it had to come:

“With just a 48-hour notice delivered by a personal phone call to Ms. Merkel on a Saturday, the CEO of E.ON, the largest German and European power producer, let it be known that the company had decided to split itself in two, one part grouping fossil and nuclear power generation and a second part encompassing the “politically correct” activities in the field of “renewable” energies. Sort of a “Bad E.ON” / “Good E.ON” move. The intention is to get rid of the “bad” part as soon as possible by putting it up for sale. At the same time, this also means the “good” part will cease to be duty bound to ensure a stable power supply under all circumstances. Obviously, such a liability is not enforceable from an entity whose only power sources are unstable wind and solar power plants. In a nutshell, the message behind this move is that the silverback of the “big four” German energy producers who group the bulk of the country’s conventional and nuclear power production is about to close shop at short notice. The others will probably follow suit.”

Please be sure to read the full opinion piece by Fred Mueller at this link:  The unsinkable German anti-CO2-Titanic just found its iceberg

Posted in Alternative Energy | Tagged , , , , , , , | Leave a comment

Hey, I’m not that stupid!

I make no apologies for this post, which may appear, by Allegheny Treasures standards, somewhat off topic.

To the contrary, this post has everything to do with the effort made in this little blog to call for an open and transparent analysis of the industrial wind business, its true environmental impact, its questionable contribution to the reduction of emissions and its potential for serving as an economical and reliable energy source for the future.

In the video following, admissions made by MIT’s Jonathan Gruber, a “key figure” in the construction of the Affordable Care Act, should stun each and every citizen of this country, regardless of party affiliation.  The assault on American citizens as stupid pawns, and the use of transparency as a political weapon by which we can, and should in their estimation, be manipulated is beyond disgraceful.  That this elitist so openly contends it is appropriate to deceive us for our own good, suggests to me that this willingness to deceive is not an isolated case but, in fact, likely systemic.

First the 53 second video:

Note these comments from the video:

This bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If CBO scored the mandate as taxes, the bill dies. So it was written to do that.

Isn’t this obviously condoned ploy to deceive the non-partisan Congressional Budget Office, by extension, a deception of Congress itself … perhaps with assistance of some members of that very body?  If so, one might ask if it is now legal to lie, deceive or obstruct Congress.  Further, by intentionally mixing terms (fees/taxes) to cloud the issue, was the Supreme Court also deceived?  If so, is that action suddenly legal?

In terms of risk-rated subsidies, if you get a law which said healthy people are gonna pay in — you made explicit that healthy people were gonna pay in and sick people get money — it would not have passed.

More deceit, but this time the victim is the American Citizen.  Of course, any thinking person should have realized that, with all its earthly power, the Federal Government has not mastered the “loaves and fishes” miracle.  The money has to come from somewhere, but we’re not trusted to participate in a decision regarding our own money?

… lack of transparency is a huge political advantage.  And basically, you know, call it the stupidity of the American voter or whatever, but basically that was really, really critical to getting the thing to pass.

So deception is “critical to getting the thing to pass?”  One could easily substitute “any governmental supported adventure” for the “thing” in this terribly offensive comment and if, as implied, this ploy is generally accepted practice among those who are supposed to look out for our interest, it cannot stand.  There must be no tolerance for anyone acting in such a manner or the individuals enabling the action.

Full transparency can be toxic for government supported adventures, especially those which yield marginal returns for Citizens, yet exceptional returns for the government agencies, politicians and industries which rely on taxpayer dollars for their livelihood.

This is particularly true of the exceptionally profitable subsidy industry.  The subsidy industry – a government/industrial complex in which taxpayers are required to fund companies in order that they can profit by marketing their product to consumers – often rewards the power brokers with campaign contributions, lucrative second careers in the private sector and other “benefits” befitting their position as keeper of the bottomless purse.  (By the way, you’re not supposed to notice that the taxpayers and consumers are, for the most part, one and the same.)

And finally:  “Look, I wish Mark was right, we could make it all transparent, but I’d rather have this law than not.

In perhaps this most damning comment, you could easily substitute “American Citizen” for this fellow “Mark.”  What Mr. Gruber is, perhaps unwittingly, suggesting is that while we idealistic folks who believe in our government may be entitled to know what is really going on, Mr. Gruber and his elitist friends deem us to stupid to know what we need.  Therefore, it is not only their right to deceive, but an obligation to do so in order to save us from our own stupid selves.  I suspect this misguided concept is the driving force which not only justifies lying to us, but the US Congress and the US Supreme Court, as well.

So yes, this post may seem off topic … but I feel industries receiving support from our government agencies, be it taxpayer funding or regulatory directive, and the agencies which are supposed to oversee these profit based industries, must be fully transparent and accountable to the citizens of this country.

Allegheny Treasures has long held the position that no profit-based business should receive taxpayer subsidies, and that includes the Production Tax Credit for Wind , which will surely be considered by Congress again soon.

We believe that preventing government from doling out taxpayer dollars places the burden of financial support for these private companies right back where it belongs – private investors.  And guess what, before you get their money, private investors require full transparency!

UPDATE:  Adding insult to injury, it appears Mr. Gruber was paid nearly $400,000.00 as an “architect” of Affordable Care Act.  What I find particularly disgusting is that Mr. Gruber gloats about deceiving the very taxpayers who were paying his salary at the time.  If this isn’t illegal, it is certainly must be, at the very least, unethical!  And he remains a professor at a major university???  Really???

Posted in Energy Subsidies, Wind Energy Legislation, Wind Power subsidies | Tagged , , , , , , , | 1 Comment

Two options for baseload electricity: fossil fuels and nuclear power

If you have only time to read one article today, you might consider this one:  Iowa roots: James Hansen speaks truth to power

Readers might recall Mr. Hansen joining three other distinguished scientists (Dr. Ken Caldeira, Senior Scientist, Department of Global Ecology, Carnegie Institution, Dr. Kerry Emanuel, Atmospheric Scientist, Massachusetts Institute of Technology, Dr. Tom Wigley, Climate Scientist, University of Adelaide and the National Center for Atmospheric Research) in open letter nearly a year ago to promote the use of nuclear energy. – To those influencing environmental policy but opposed to nuclear power

Posted in Nuclear Energy | Tagged , , , , , , , , | 1 Comment

Bankruptcy and the corporate skunks

You know, skunks get a bad rap!  I admit they do get a little funky at times, but mostly when you mess with them or, worse, run over them with your car.  But that smell is nothing compared to what’s coming out of the Edison Mission Energy (EME) bankruptcy proceedings.

Seems the US Bankruptcy Court of Chicago saw fit to grant Edison Mission permission to stiff some 300 current and 160 future retirees out of the large sum of money due to them.

According to Industries News Press, Edison Mission originally wanted to cut these folk’s health and retirement benefits more severely, but the impacted employees decided to fight back in an attempt to get the $70,000,000 owed to them.

The Court decided that, instead of paying the full $70 million due, Edison Mission could get away with only paying some $23 million.  According to the article, “the settlement says nonunion retirees’ benefits will remain in effect for a short while longer, while union retirees’ benefits will be paid through March 31, 2015.”  By my estimate, that’s a $46 million shortfall or, retirees got a third of what was due to them.  Keep that number in mind – $46 million.

Maybe, in this time of financial pain, getting a third of what is due to you is considered a victory for the little guy.  On the other hand, my cynical nature leads me to suspect the Lawyers representing both sides of the argument are likely pretty happy with their piece of the pie.  (And, he says naively … I hope none of the lawyer fees came out of the pensioner’s $23 million.)

You might wonder why I care, since I’m not a past or current employee of Edison Mission.  These things happen all the time!  Edison Mission is bankrupt so these people are lucky they got anything … stop whining!  Besides, the court agrees with the settlement!  Time to move on!

Well, here’s what rubs me the wrong way.  I live under the Pinnacle wind plant in Keyser, WV.  Edison Mission – Pinnacle’s owner of record in August of 2012 received over $44,000,000 (that’s $44 million) from the United States Treasury Taxpayers as a grant simply for building the 23 turbine wind plant on the Allegheny Front.

In December of 2012, just four damned months after receiving the $44 million Taxpayer subsidy for simply building Pinnacle, the company declared themselves bankrupt.  Does anyone acutally believe EME and it’s corporate mother Edison International (EI) were not already working on the bankruptcy at the same time they were running to the Bank to cash the $44 million Taxpayer handout!  A bankruptcy of this magnitude isn’t decided over lunch, folks.

Something smells!

Want to know what else smells?  The US Treasury Taxpayers handing over $44 million to a for-profit company which, in a mere four months, declares bankruptcy and, now, thanks to a court ruling, the bankrupt company, or one of the other corporate players in this saga, not only gets to keep the $44 million corporate welfare check, the court allows EME to rip off its past and current employees for nearly the same amount – $46 million.

I know nearly every lawyer will claim that it’s apples and oranges and the the Court must rule according to the law and blah and blah and blah – it’s the law, its the law!  Well, that might be technically correct … but it’s just not right!  The US Bankruptcy Court should be savvy enough to smoke this little cash deal out, and, if current law doesn’t protect employees from this financial slight of hand, the Court should demand Congress give them the tools to act fairly.

Adding salt to the Taxpayer and retirees wounds … EME accused it’s corporate mother, EI, of “plundering Edison Mission of hundreds of millions of dollars before the bankruptcy filing.”  I can only assume the $44 million and the $46 million were part of the alleged pirate raid.

But, not to worry, these bickering corporations had a “Kumbayah” moment and “reached a settlement that dropped the threat of litigation and set out a plan to share more than a $1 billion in tax benefits.”

Something smells!.

And what of the remaining players – Edison International and NRG Energy?

Edison International Stock was selling for around $45/share in December 2012.  Today it is $56.  EME’s Momma came out OK, I’d say.

NRG Energy, a huge energy producer, concluded a purchase of Edison Mission Energy in April of this year.  If you watch the market reports lately, this newly minted second largest US power company seems to be doing great.  The stock seems to be in a steady climb.

Maybe one of these two corporate giants will kick in a little to the pension fund.  I’m sure they feel bad about the employees getting stiffed of the $46 million they planned to live on and now have little working life left to recover.  Maybe if NRG Energy or Edison International happen to stumble across the $44 million the US Treasury Taxpayers so generously handed the bankrupt for-profit Edison Mission for just one of their projects, they’ll kick in a little to the retirees.

But frankly, I doubt if any of the gang of three will do what’s right.  EME practically said they would have taken even more from the pensioners if they could.  I hope I’m wrong, but EI and NRG Energy will likely claim a comfortable distance from the bankruptcy ruling which effectively subsidized their profits on the backs of the pensioners and Taxpayers.

Nah … apples and oranges, remember!

And anyway, the $44 million Taxpayer dollars which subsidized a third of the cost of construction at the Pinnacle wind plant in West Virginia is likely lost in the shuffle of billions floating from ledger to ledger.  Gone from the US Taxpayer’s pockets and into the pockets of one of the three for-profit corporations.

It’s not surprising that $44 or $46 million gets lost in the shuffle I suppose.  When you consider that more than $20,000,000,000.00 ($20 billion) Taxpayer dollars has been handed out to for-profit corporations just from the 1603 Grant program for renewable energy alone and billions and billions of Taxpayer money is forked over to for-profit companies in the form of Production Tax Credits and other tax incentives.  It’s either hard to keep track of these paltry millions or …

Something smells!

It’s my opinion that the US Government Taxpayer should not be subsidizing any for-profit company for anything … anything … anything!

Secondly, we need a level of intelligence and fair play much higher than displayed in this bankruptcy action.  Any legal process which allows the taking of committed employee benefits due to corporate’s unintended or intentional mismanagement of finances, while walking away with profits, must be changed.

As the dust settles, the Bankruptcy Judge heads home, the attorneys meet at the country club to discuss tactics for the next case and the retirees and lowly Taxpayers scramble to piece together what’s left of their money in order to pay the monthly bills.

Something smells!

Oh, a question for the officials charged with protecting the Taxpayers of tiny Mineral County, WV – has assurance been given that all agreements, including the poorly constructed decommission agreement, are safe from the same peril experienced by the pensioners?

And while you’re at it, with which corporate entity will the County leaders revisit the Decommission Agreement in just a few years?  Just kidding … I realize that’s an unfair question.  With the way these wind LLC’s change names and ownership passed around like hot potatoes, who knows who will own Pinnacle in 2 – 3 years?

But, look at the bright side … maybe when Pinnacle’s massive Japanese made turbines mounted on the huge Mexican made towers come tumbling down, someone might find the $44 million in subsidies the US Treasury Taxpayers handed to the for-profit Edison Mission Energy four months before it declared bankruptcy tucked away inside.  Wouldn’t that be a hoot!

In fairness, there’s no doubt I’m missing something.  One of these kindly corporations will let me know I’m wrong and that they are, in fact, looking out for the little guy.  I’ll probably get comments from NRG Energy, EI or even EME explaining how they made the retirees whole and how the Taxpayers should be proud of their investment in the now bankrupt EME.  Heck, I’ll probably feel so bad that I ranted on about this topic that I’ll immediately begin working on my apology.  I’m ready to eat crow!

And, who knows … I might finally hear back from the elected officials I penned the open letter to way back in August of 2011.

But, until all that happens, I hope you don’t mind if I hang out with the skunk!

Posted in Decommission, Edison Mission Group, Energy Ethics, Industrial Wind Taxes, Mineral County WV, Pinnacle Wind Farm, Wind Power subsidies, Wind tax rebates | Tagged , , , , , , , , , , | 2 Comments

A tale of two investors … it’s all about the subsidies!

The largest Dutch pension administrator, APG, decided not to invest in wind farms, “and is choosing to put money into fossil fuels instead.

Why?  Seems the fund management is “wary of investing because of the insecure role that government subsidies play” and, they note, successful investment in wind is “largely dependent on subsidies and tax advantages.”  The fund managers cite the changing rules for industrial wind in Spain as example of their concern, where subsidies were again pulled back.

On the other hand, investor extraordinaire Warren Buffett, presumably expecting that US taxpayers will be on the industrial wind hook for years to come, is very happy to toss investor money at the twirling energy impostors noting his comfort in accepting the generosity of Taxpayers with this statement – “I will do anything that is basically covered by the law to reduce Berkshire’s tax rate. For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.” – (US News, 5/12/2014,) (h/t SOAR)

It’s good to keep in mind folks, that in spite of all the hype, the effort to promote industrial wind isn’t to stage a renewable-energy revolution, “This is all about making money!”  And a large chunk of the profit obviously comes from government subsidies Taxpayer pockets.

By the way … from the “want a little cheese with that whine?” file – the fellow who runs EverPower Wind Holdings says the just signed Ohio law which stops increases in requirements for the use of renewable energy essentially ruins the possibility of any new large-scale wind development.

That’s an amazing admission, don’t you think?  Why on earth would a for-profit company admit that their product is so terrible it takes a law demanding its use just to keep it alive?  Do these profiteers actually think their Customers, and the Taxpayers who are required to help put the profit in their pocket, are that stupid?  Oh … wait … maybe that stupidity is what Mr. Buffett is banking on as well.

Back to the Dutch investment thing that got me started this whole rambling post – it was all about the logic of investing pension funds in industrial wind.  According to the source article, the investment firm we’re talking about is the biggest pension administrator in the Netherlands, and also one of the biggest in the world, with management assets of €359 billion.  No small potatoes and their answer to industrial wind is no!

This reminded me of an AT post from a couple of years ago when I questioned the logic of a $240 million investment in Edison Mission Energy.  The firm representing teacher pension funds thought it was an excellent partnership even though it came at a time when Edison Mission Energy’s parent, Edison International, was issuing stern warnings to the subsidiary to either shape up or ship out.  In addition, the “development pipeline of potential wind projects has been reduced to 1,300 megawatts from 3,800 megawatts.”  The decision to reduce commitment to wind came “as a result of capital resource constraints and limited market opportunities.”

Just months later Edison Mission Energy filed for bankruptcy and it’s assets were purchased by NRG Energy.  Hopefully all worked out well for the teachers, although I would be hard pressed to believe this is the path the investment adviser had in mind when the deal was signed.  Seems to me this is more likely a case of the blind squirrel finding an acorn once in a while.  But, who knows, maybe the teachers actually have a little more cash in their pockets as a result of their investment in a soon-to-be bankrupt company … but I’m almost certain the Taxpayer’s do not!

Posted in industrial wind failure, industrial wind v fossil fuel | Tagged , , , , , , , | 1 Comment

Hypocrisy? You be the judge.

Warren Buffett’s Berkshire Hathaway “has been able to plow so much into renewable energy because it can use tax credits to offset profit at other businesses.”

How much did he “plow” in? Seems Mr. Buffett didn’t even know, but, when told by an aide that the number was $15 Billion, he immediately said he’d double his investment – presumably in an attempt to impress his ever-swooning investors.  Wonder how many of those folks realized they might also be personally doubling down, in more ways than one?

How?  The same investors who initially place their hard earned cash in the kindly man’s hands to manage as investment, are happy to additionally give to Mr. Buffett and – by extension – to themselves, their own money in the form of taxpayer subsidies.  Benefiting from all this shifting of billions is, of course, the industrial wind profiteers.

I find it interesting that Mr. Buffett, creator of “a bold plan” to correct the injustice brought on by income inequality, stated recently, “I will do anything that is basically covered by the law to reduce Berkshire’s tax rate. For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.” (US News, 5/12/2014,) (h/t SOAR)

Mr. Buffett’s use of tax credits to increase his profits is a classic example of why I don’t support any taxpayer subsidy for any profit based private company such as Berkshire Hathaway.

To my mind, Mr. Buffett should set the example by refusing subsidies and, were he serious about fairness to taxpayers, should come out strongly against the continuation of the Production Tax Credit for Industrial Wind.  After all, this is the same Warren Buffett who stated 2011 that he believed it was wrong that rich people, like himself, could pay less in federal taxes, as a portion of income, than the middle class, and voiced support for increased income taxes on the wealthy.

But, around the same time Mr. Buffett was railing against the rich not paying enough in taxes, he had no trouble suing the Federal Government over … yep … taxes.  The Federal Government decided to counter sue and likely the taxpayers will pay legal fees for the government’s plead and Mr. Buffett’s own investors, with help from taxpayer subsidies, will pay for Mr. Buffett’s side.  Notice how taxpayers always end up on both sides of the equation?

Even the NY Times noted at the time of the lawsuit volley that “it is an odd twist that a company controlled by Mr. Buffett — perhaps the most outspoken businessman in the country in support of raising taxes on the “mega-rich” — is now in a dispute with the government over his company’s paying too little in taxes.”

An “odd twist?”  No … seems to me it’s just business as usual:

Feeding time!

Posted in Energy Ethics, Energy Subsidies, industrial wind cost, industrial wind failure, Industrial Wind Taxes, Windtoons | Tagged , , , , , , , | 1 Comment

Irresponsible Senate Finance Committee Action on Wind Energy Tax Break

Following on the heels of yesterday’s post, Glenn Schleede offers additional commentary regarding the “irresponsible” EXPIRE Act:

Commentary begins:

April 11, 2013

Irresponsible Senate Finance Committee Action on Wind Energy Tax Break

Once again, the Senate Committee that manages to make life miserable for millions of tax-paying Americans with its manipulation of the US Tax Code, is acting to aid its friends, punish ordinary taxpayers, and load another $85 billion in debt on our children and grandchildren.

On April 3, 2014, by “voice” (no fingerprints) vote, the Senate Finance Committee reported out an $85 billion tax break ”extender” bill — which the Committee calls the “EXPIRE Act.” [1] The bill includes billions in unwarranted tax breaks for special interests, including the wind industry.

As long as Congress fails to pass a balanced budget, every dollar provided to special interests in this $85 billion “Extender” bill is a direct addition to the national debt that will be dumped on our children and grandchildren. Further, each dollar that Congress adds to the national debt will be DOUBLED in about 15 years due to interest that will accrue on that debt.

An egregious example of an unwarranted special interest tax break in the Finance Committee’s bill is Senator Grassley’s wind and other renewable energy “Production Tax Credit” (PTC) and “Investment Tax Credit” (ITC). Grassley insisted on extending this 20-year old “temporary” tax break for another 2 years at a cost, according to the Joint Tax Committee, of more than $13 billion over the next 10 years (and more thereafter).

When Senator Toomey attempted to eliminate unwarranted energy tax breaks from the bill, Republican Senators Grassley, Cornyn, Thune, Crapo, & Portman[2] joined Finance Committee Democrats in voting to keep the massive energy tax breaks in the bill!

The votes for Grassley’s $13+ billion wind PTC and ITC extension to benefit “wind farm” owners would result in an equal addition to future generations’ debt burden! Under Grassley’s measure, owners of “wind farms” would be able to continue reducing their corporate income tax liability by $0.023 (adjusted upward for inflation) for each kilowatt-hour (kWh) of electricity produced by their wind turbines during the next 10 years.

The wind PTC was initially passed in 1992 as a temporary incentive to help a then fledgling industry – with the expectation that wind energy would be environmentally benign and would become commercially viable. However, after nearly 40 years of subsidies for wind energy R&D and 20 years of lucrative wind energy tax breaks — together totaling over $100 billion:

  • Electricity from wind remains high in true cost and low in real value[3] – with the wind industry providing no evidence that electricity from wind will ever become commercially viable (i.e., without large tax breaks and subsidies).
  • Producing electricity from wind has proven to have numerous adverse environmental, economic, electric system reliability, scenic, and property value impacts not originally foreseen and still not admitted by wind industry advocates; and

Eight Republicans[4] (some claiming to be “conservatives”) and 110 Democrats in the US House of Representatives have signed a letter to House leaders urging extension of the wind PTC. The tax-writing House Ways & Means Committee hasn’t taken up the wind PTC, but one of the wind industry’s Washington lobbyists has bragged that the wind industry still has “very strong support from Democrats in the House and strong support from some, but not all, of the Republicans.”[5]

Last December, Senator Grassley told constituents in Iowa that the costly wind Production Tax Credit (PTC) would be extended soon. “…Congress will come back after the New Year and approve four dozen or more tax credits.” “There are a lot of economic interests”…represented in the tax credits. Those interest groups collectively “put a lot of pressure on Congress to re-institute the credits’[6]

In addition to wind industry lobbyists, Grassley undoubtedly was referring to such Washington establishment organizations as the US Chamber of Commerce, National Association of Manufacturers, and Business Roundtable. Organizations such as these once championed private enterprise but now seem to be heavily influenced by member companies that:

  • Have concluded that there is less risk and more profit in “mining” Washington for tax breaks and subsidies than in pursing truly innovative and productive activities in private, competitive markets.
  • Have no problem in accepting special interest tax breaks that load debt on future generations.

The April 3rd action by the Senate Finance Committee certainly helps explain why a recent Gallup Survey shows that Congress currently has a 13% favorability rating. If the nation’s “Millennials” understand how the Congress is adding to the debt that they and their children will bear, they may assign an even lower rating!

Glenn R. Schleede
Virginia

[1] Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act.
[2] See “Results of [Senate Finance Committee] Executive Session.040314” download 4/9/14 from: http://www.finance.senate.gov/legislation/details/?id=67094f10-5056-a032-52ff-257830e0a938
[3] Electricity is produced by wind turbines only when wind speeds are in the right range (starting around 6 MPH, reaching rated capacity around 32 MPH, and cutting out around 55 MPH). Electricity from wind turbines is, therefore, low in value because it is intermittent, volatile, unreliable, and most likely to be produced at night in colder months, not on hot weekday afternoons when most needed. Reliable generating using conventional energy sources must always be available to maintain stable electric grids and a reliable electricity supply.
[4] King (IA), Lucas (OK), Runyan (NJ), Fitzpatrick (PA), Gibson (NY), Latham (IA), Noem (SD). Cole (OK).
[5] http://www.snl.com/Interactivex/article.aspx?CdId=A-27696241-11565 (downloaded April 11, 2014)
[6] The Gazette (Cedar Rapids, IA), December 11, 2013.

Commentary ends!

Posted in Glenn Schleede, Politicians and Wind Energy, Wind Power subsidies, Wind tax rebates | Tagged , , , , , , , , , , , | Leave a comment

Wind PTC supported by “irresponsible Republican Senators”

Glenn and Sandra Schleede are fed up with their “irresponsible representatives” in Washington and have chosen to let them know.  We thank them for allowing us to share the open letter they sent to Republican leadership.

Letter begins:

April 10, 2013

Memorandum for:

  • Chairmen, National Republican Senatorial Committee
  • National Republic Congressional Committee
  • Republican National Committee

SUBJECT:  Irresponsible Republican Senators

During the last few weeks, we have received 17 requests for contributions from you or your organizations.  We will not contribute to your organizations or to any Republican member who continues to ignore the real interests of ordinary citizens and taxpayers and loads debt on our children and grandchildren.

Recent example:  On April 3, 2014, 5 Republican members of the Senate Finance Committee voted with Committee Democrats to preserve unwarranted special interest tax breaks in the latest “Extender” bill, which bill the Committee calls the “EXPIRE Act.”[1]

As long as Congress fails to pass a balanced budget, every dollar provided to special interests in this $85 billion “Extender” bill is a direct addition to the national debt that will be dumped on our children and grandchildren.  Note also that each dollar that Congress adds to the national debt will be DOUBLED in 15 years or less due to the interest that is accruing on that debt.

An egregious example of an unwarranted special interest tax break in the Committee’s bill is Senator Grassley’s wind and other renewable energy “Production Tax Credit” (PTC) and Investment Tax Credit (ITC).  Grassley insisted on extending this 20-year old “temporary” tax break for another 2 years at a cost, according to the Joint Tax Committee, of more than $13 billion over the next 10 years (and more thereafter).

When Senator Toomey attempted to eliminate unwarranted energy tax breaks from the bill, Senator Grassley and at least 4 other Republicans (Cornyn, Thune, Crapo, & Portman)[2] joined with Finance Committee Democrats to keep the tax breaks in the bill!

How can any of us take Republicans seriously when members of the Senate and House continue to vote to protect unwarranted special interest tax while they vote to dump more debt on future generations?  Their votes for the wind PTC are equal to a direct transfer from future generations’ debt burden to the pockets of today’s “wind farm” owners!

Under Grassley’s measure, owners of “wind farms” would be able to continue reducing their income tax liability by $0.023 (adjusted upward for inflation) for each kilowatt-hour of electricity produced by their wind turbines during the next 10 years.

The wind PTC was initially passed in 1992 as a temporary incentive to help a then fledgling industry – with the expectation that wind energy would be environmentally benign and would become commercially viable.  However, after 40 years of subsidies for wind energy R&D and 20 years of lucrative wind energy tax breaks for “wind farm” owners, together totaling over $100 billion:

  • Electricity from wind remains high in true cost and low in real value – with the wind industry providing no evidence that electricity from wind will ever become commercially viable (i.e., without large tax breaks and subsidies).
  • Producing electricity from wind has proven to have numerous adverse environmental, economic, electric system reliability, scenic, and property value impacts not originally foreseen and still not admitted by wind industry advocates.

The actions by Senator Grassley, the other four Republican Senators, and eight members of the House[3] (some claiming to be “conservatives”) who are urging extension of the wind PTC help illustrate why so many ordinary Americans are so fed up with long-standing members of Congress.

Of course, we have no way of matching the campaign contributions that members get from special interests whose tax breaks they are preserving — including organizations represented by hundreds of associations, NGOs, law firms, and their lobbyists.

We also recognize that members are eager to please contributors from such Washington establishment organizations as such as the US Chamber of Commerce, National Association of Manufacturers, and Business Roundtable – organizations that once championed private enterprise but now speak for companies that:

  • Have concluded that there is less risk and more profit in “mining” Washington for tax breaks and subsidies than in pursing truly innovative and productive activities in private, competitive markets.
  • Have no problem in accepting special interest tax breaks that load debt on future generations.

However, we will limit the contributions we can afford to those candidates who will vote to stop special interest tax breaks such as those promoted and protected by Senator Grassley and those of like performance who are so willing to dump debt on our children and grandchildren.

Glenn R. Schleede and Sandra K. Schleede, Virginia

CC:   Senate Minority Leader McConnell and Senator Cornyn
House Speaker Boehner and House Majority Leader Cantor

[1] Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act.
[2] See “Results of [Senate Finance Committee] Executive Session.040314” download 4/9/14 from: http://www.finance.senate.gov/legislation/details/?id=67094f10-5056-a032-52ff-257830e0a938
[3] King (IA), Lucas (OK), Runyan (NJ), Fitzpatrick (PA), Gibson (NY), Latham (IA), Noem (SD). Cole (OK).

Letter ends.

Oh … by the way … we couldn’t agree more:

http://alleghenytreasures.com/2014/04/02/ptc-industrial-winds-viagra/

and

http://alleghenytreasures.com/2014/04/04/expire-its-just-an-act/

Allegheny Treasures Note: “Mr. Schleede is the author of many papers and reports on energy matters. He is now retired but continues to analyze and write about federal and state energy policies, particularly those affecting wind energy.”

“Until retiring, Schleede maintained a consulting practice, Energy Market and Policy Analysis, Inc. (EMPA) Prior to forming EMPA, Schleede was Vice President of New England Electric System (NEES), Westborough, MA, and President of its fuels subsidiary, New England Energy Incorporated. Previously, Schleede was Executive Associate Director of the U.S. Office of Management and Budget (1981), Senior VP of the National Coal Association in Washington (1977) and Associate Director (Energy and Science) of the White House Domestic Council (1973). He also held career service positions in the U.S. OMB and the U.S. Atomic Energy Commission.”

“He has a BA degree from Gustavus Adolphus College and an MA from the University of Minnesota. He is also a graduate of Harvard Business School’s Advanced Management Program.“

 

Posted in Glenn Schleede, Politicians and Wind Energy, Wind Power subsidies, Wind tax rebates | Tagged , , , , , , , , , , , | 2 Comments

EXPIRE … it’s just an act!

The wind industry consumes nearly 80 percent of all federal subsidy dollars for renewable energy and 55 percent of all federal energy subsidies, according to David Brown, senior vice president for government affairs for Exelon, a nuclear power company. Because wind farms almost always are located far from where the energy will be used, power companies must construct huge transmission lines to take in this additional capacity they do not need. And since wind performs worst when it’s needed most, those traditional power companies it does so much to undermine must stand ready to make up for the needs it cannot meet.” – Conn Carroll

But, who cares!  Certainly not the majority of members of the Senate Finance Committee who decided to recommend that taxpayers once again fill the tin cup of the for-profit industrial wind business.

Yep!  Confirming once again that it is beyond the ability of Congress to construct a comprehensive, fair and effective tax law, the Committee instead issued a patch-work quilt of fixes known as the EXPIRE Act.  Sadly, EXPIRE has nothing to do with term limits for elected officials.  EXPIRE is actually short for “Expiring Provisions Improvement Reform and Efficiency Act” or, as the Senate Finance Committee web site further clarifies, “an original bill entitled “The Tax Technical Corrections Act of 2014” (The Tax Technical Corrections Act of 2014 includes both technical corrections and deadwood provisions, which are described separately in the attachments); and to fill vacancies on subcommittees, the Joint Committee on Taxation, the Congressional Oversight Group, and the Congressional Trade Advisors on Trade Policy and Negotiations.”  And no … unfortunately … the “deadwood provisions” mentioned have nothing to do with term limits for elected officials either.

Now might be a good time to remind ourselves that, in spite of the valiant efforts of the wind industry lobby to nominate wind companies to energy sainthood, wind companies are in it for the buck.  You might recall comments made a couple of years ago by Gabriel Alonzo, then chief executive of Horizon Wind, who told his employees that their goal isn’t to stage a renewable-energy revolution, “This is all about making money!

Now don’t get me wrong … I certainly don’t mind a leader suggesting that profit is the reason for his company’s existence.  I also don’t mind that, unless I’m mistaken, this is the same Gabriel Alonzo currently listed by the American Wind Energy Association as Board Chair.  After all, making profit is why folks go into business and you certainly can’t fault AWEA for having him guide the organization.  AWEA’s job is to insure the field is set for their members to make a hefty profit.  And, after all, isn’t profit the ultimate reason they lobby congress so hard for legislation such as the EXPIRE Act?  They are, after all, the American Wind Energy Association, “the premier organization representing the interests of America’s wind energy industry.”

But what concerns and confuses me is how we get our arms around exactly how much of the US Taxpayer’s investment in these companies actually gets back to US Taxpayers.

For example, let’s go back to Mr. Alonzo.  Beyond his role heading the Board of the wind industry lobby, he is also listed as Chief Executive Officer of EDP Renewables North America LLC (EDPR NA).  If I read it right, the EDP NA which Mr. Alonzo leads is the North American division of EDP Renewables (Euronext: EDPR), a self-described global renewable energy company.  Global EDP Renewables then, is a component of Energias de Portugal, S.A. (“EDP”), which describes itself as a vertically-integrated utility company, headquartered in Lisbon, Portugal, and the majority shareholder of EDP Renewables of which the North American group is a part.  Is this making sense?

Anyway, there’s nothing necessarily wrong with all this.  And frankly, that’s not my point.

Rather, I use this example to illustrate how assessing the true impact of the EXPIRE Act, a seemingly simple “mom and apple pie” patch-work quilt of fixes to a cumbersome tax code, is far more complicated than we Taxpayers are led to believe.  Heck, I wouldn’t be surprised to find that the very politicians who are thrilled to hand Taxpayer money to these companies don’t fully understand the consequences of their actions.  But then, maybe we haven’t really challenged them to do so, have we!

We too often let them off the hook, falling for their blubber about jobs and green and mom and apple pie.  And we’re obviously satisfied with that nonsense … after all, we do keep sending them back!

But, if you are as confused as I am, maybe you could contact your Congress and Senate Representatives, who are expected to vote on this legislation, to help you understand.  Ask them specifically what return you can expect to see for your hard-earned tax dollar investment in these for-profit businesses.

I guarantee Mr. Alonzo is expected to account for every dollar which moves in and out of his company.  If not, he’ll be replaced.  Why then should we not ask the politicians so eager to hand out your hard-earned cash to do the same?

Oh … if your Representatives tell you that it’s all too complicated and all they can promise is “apple pie” … tell them you want your damned money back!

Posted in Energy Subsidies, Industrial wind lobby, Wind Energy Legislation, Wind Power subsidies | Tagged , , , , , | 2 Comments