The Green Corruption Files, January 1, 2015
Did you catch “big” news in the wind industry this past November? Yep, “SunEdison & TerraForm Power to acquire First Wind For $2.4 Billion!” And, most are predicting that this transaction makesSunEdison “one of the world’s largest, if not the largest, renewable energy developers.”
TerraForm, on the other hand, a SunEdison Co., is “a global renewable energy company” that is helping “change the way renewable energy is generated, distributed, used and owned.”
Meanwhile, founded in 2002, the Boston-based First Wind “is an independent renewable energy company exclusively focused on the development, financing, construction, ownership and operation of utility-scale renewable energy projects in the United States.”
Sounds terrific.
Well, until you read the fine print, as reported by James Hall, directly following this wind development: “Sun Edison Buying First Wind Scam.”
Before you call your broker, review a recent edition of the BATR RealPolitik Newsletter on the topic – Another Green Energy Fraud. When Bloomberg announces thatSunEdison, TerraForm to Acquire First Wind for $2.4 Billion, they are not disclosing the entire story.
“Expected to close in the first quarter, the purchase will consist of a $1.9 billion upfront payment and $510 million dependent on First Wind completing backlog projects.
TerraForm will add 521 megawatts of First Wind projects to its portfolio under the deal, with 1.6 gigawatts of projects expected to be developed by SunEdison and dropped down into TerraForm in 2016 and 2017, the companies said in the statement.”
The sordid history of First Wind strikes a record of questionable financial dealing, concealed debt obligations, flipping LLC ownership and holding company discrepancies…
Needless to say, after completing my month-long research on First Wind, I concluded with a few questions. Is this another green energy boondoggle that in reality needed a bailout? Will First Wind eventually warrant a place inside our “150 Billion Cleantech Crash” report that, last January, exposed the 32 Obama-backed green energy companies that have already gone bust, costing taxpayers over $3 billion?
What is clear is that First Wind will be added to our “Troubled Watch List,” of which was presented in three categories, and included the 22 green energy companies/projects that have been problematic for some time, placing that figure at over $6.7 billion. At that time, there were also five bailouts (half by taxpayers and half by foreign-owned entities), of which American taxpayers have already spent $7.5 billion.
Keep in mind that these 59 green energy failures ($17.2B) doesn’t factor in the numerous DOE funded projects that are still in the shadows, nor my scorching story on the “law-breaking, American hating” Spanish conglomerate Abengoa, that was subsidized with over $3.6 billion in stimulus loans and grants from U.S. taxpayers.
There’s the recent development on the Ivanpah Solar Plant and its shady 2011 $1.6 billion stimulus deal that now expects a bailout.
Also, this total does not calculate the tens of billions that Team Obama has spent on other non-stimulus clean-energy deals, nor the stimulus-created and/or funded programs as well as the “green jobs” promise that also flopped –– all costing taxpayers billions more.
Considering that my “cleantech failure” list was prepared a year ago, I’ve compiled many more that have gone down. So be on the look out for a 2015 release.
As we await the fate of this wind deal, we can confirm that both First Wind and SunEdison were winners of “green,” and, as usual, both have direct ties to the Obama White House.
To give you a hint into the “green” cronies –– those with access and influence –– behind First Wind, there is D.E. Shaw & Co. and Larry Summers; Madison Dearbon Partners and Rahm Emanual; as well as Larry Rasky and Vice President Joe Biden. SunEdison, on the other hand, is tied to Goldman Sachs, Tony Podesta and other high-powered lobbyists.
What is key here is that American taxpayers have been propping up First Wind since 2009, which was their plan all along –– “secure taxpayer money and then go public.” This includes a Department of Energy (DOE) stimulus loan worth $117 million as well as over $661 million of free taxpayer cash from the 1603 Grant Program.
Before I begin documenting First Wind’s taxpayer cash, let me reiterate that unknown to most American taxpayers is another “green” government freebie blowing out of the stimulus package. This is the 1603 Grant Program, which is part of President Obama’s trillion-dollar spending spree, whereas $100 billion was earmarked for renewable energy.
According to Energy.gov, “The Section 1603 program was created under the American Recovery and Reinvestment Act to support the deployment of renewable energy resources. The 1603 program offered project developers the option to select a one-time cash payment in lieu of taking the Investment Tax Credit (ITC) or the Production Tax Credit (PTC), for which they would have otherwise been eligible.”
Currently, “the 1603 American Recovery and Reinvestment Tax Act (ARRTA) program “offers renewable energy project developers cash payments in lieu of investment tax credits (ITC).” The value of an award is equivalent to 30% of the project’s total eligible cost basis in most cases.
Excuse me while I go off on a tangent, because understanding the difference between these three costly “green” incentives, is not only important, but also infuriating.
This decades old, controversial, and expensive tax benefit has been recycled and renewed numerous times since –– even as part of the 2009-Recovery Act as well as the 2012 “fiscal cliff” wheeling and dealing.
Why? Because the PTC has been hyped as a jobs creator and measure to “save the planet,” as well as the fact that behind the scenes, exists intense and powerful lobbying, especially from those pushing and benefiting from green power.
Again, as explained by WRI Digest, “The Investment Tax Credit (ITC) reduces federal income taxes for qualified tax-paying owners based on capital investment in renewable energy projects (measured in dollars). The ITC is earned when the equipment is placed into service.”
It seems that the “Federal ITC was first signed into law as a part of the Revenue Act of 1962,” and has gone through its share of recycling on Capital Hill. But it was the Energy Policy Act of 2005 (“to ensure jobs for our future with secure, affordable, and reliable energy”), which some say “made the Federal ITC more or less what it is today” –– even giving the credit to President George W. Bush, “who increased the tax credit from 10% to 30% of eligible costs for solar and fuel cell projects.”
Like the PTC, the ITC has been extended through various legislation –– and under current law, the ITC will remain in effect through December 31, 2016.
Considering that most renewable energy companies/projects (especially wind and solar) rely heavily on these “green” subsidies, and Congress is in cahoots with them, you can bet your bottom dollar (if you have any left since this administration took over), they will be extended many more times.
And, it’s doubtful that the 1603 Grant Program (created by the 2009-Stimulus law) is going anywhere soon –– a government giveaway, which as of October 15, 2014, has dished out $23 billion (and counting), funding 98,816 projects.
Worse is that this program (now tied to the PTC and ITC) has become another vehicle to fuel corporate welfare and crony deals –– with Big Green leeching off of these subsidies, while some even feeling entitled. Case in point is the recent absurdity when the mega-firms NRG Energy, BrightSource Energy and Google dared request more taxpayer cash for their $2B pet solar project in California.
Yep, this past November, blaming lack of sunshine, Fox News reported the following: “after already receiving a controversial $1.6 billion construction loan from U.S. taxpayers [in 2011], the wealthy investors of a California solar power plant now want a $539 million federal [1603] grant to pay off their federal loan.”
Yet, there is no shame in this type of taxpayer money grab. This is known as “double dipping,” wheredevelopers (sponsors and investors) of the stimulus-backed projects continue to gorge “themselves on a multi-layered cake of federal, state and local subsidies” –– even to the point where they provide “little skin in the game,” leaving taxpayer to foot the risk.
Another alarming aspect of this program is the billions of renewable U.S. money that is being outsourced to other countries, which I had alerted to in January 2013 when the “green tab” was at $16 billion. At that time, the Energy and Commerce Committee had released an “in-depth report on its ongoing investigation into the implementation of President Obama’s green energy stimulus spending.” What they found is this shocking detail: “foreign corporations have received approximately one-quarter of $16 billion spent on ‘Section 1603’ renewable energy stimulus program.”
SUNE or Sun Edison filed for Chapter 11 bankruptcy protection yesterday. Their stock is currently at 23 cents. down from over $30 a year ago. Will there be a bailout of their solar favorite? Pelosi’s husband bought a lot of it last year.