Listen to the WLEA report on the admissions of First Wind in their SEC IPO filing.
first%20wind%20filing%20story%20.mp3
Sunday, August 31, 2008
First Wind Admissions in the SEC IPO S-1 Filing
Listen to the WLEA report on the admissions of First Wind in their SEC IPO filing.
first%20wind%20filing%20story%20.mp3
About the Jordanville Wind Project
The original plan for a 68-turbine, 136-megawatt project in southern Herkimer County took its first major hit in August 2007 when the state Public Service Commission accepted a scaled-down version of the project - with 19 fewer turbines - to avoid adverse environmental impacts on the Glimmerglass Historic District.
In December 2007, state Supreme Court Justice Donald Greenwood of Onondaga County ruled the Warren Town Board failed to look closely enough at the project's potential impact, and that the Warren and Stark town boards acted in violation of the state's Open Meetings Law and Freedom of Information Law. This ruled the environmental studies null and void.
The project developer, Iberdrola Renewables, is moving forward with a new plan for a project that would include only 40 wind turbines, Communications Manager Paul Copleman said. The environmental studies are being conducted for a second time, he said.
In December 2007, state Supreme Court Justice Donald Greenwood of Onondaga County ruled the Warren Town Board failed to look closely enough at the project's potential impact, and that the Warren and Stark town boards acted in violation of the state's Open Meetings Law and Freedom of Information Law. This ruled the environmental studies null and void.
The project developer, Iberdrola Renewables, is moving forward with a new plan for a project that would include only 40 wind turbines, Communications Manager Paul Copleman said. The environmental studies are being conducted for a second time, he said.
Need for tax breaks vexing
WIND FARMS: Subsidy opponents say taxpayer cash going to the rich
Money doesn't grow on trees, but it may grow on windmills.
The developers of the four proposed wind farms in Jefferson County could capitalize on tax breaks and incentives at the federal, state and local levels through their projects. Opponents say the subsidies take taxpayer money and give it to those who already are rich.
"It's the taxpayers and electric customers that are taken to the cleaners," said Glenn R. Schleede, a widely known wind power opponent who has worked for electric utilities and the federal Office of Management and Budget.
Supporters say the subsidies are needed to encourage environmentally friendly policy.
Carol E. Murphy, executive director of Alliance for Clean Energy New York, said, "Renewable energy is not going to happen unless those policies are in place."
In Jefferson County, potential local and federal tax breaks and state incentives will total $12.5 million for Iberdrola's Horse Creek Wind Farm, $13.8 million for BP Alternative Energy's Cape Vincent Wind Farm, $7.7 million for Acciona's St. Lawrence Wind Farm and $27.3 for Babcock and Brown's Hounsfield Wind Farm.
FEDERAL TAX CREDIT
The federal Production Tax Credit and state renewable energy credit system are based on a development's production.
The American Wind Energy Association's Web site says that wind turbines usually produce 25 percent to 40 percent of their rated capacity, so over a year, a farm rated at 100 megawatts likely would produce between 219,000 and 350,400 megawatt hours. The federal Production Tax Credit is $20 per megawatt produced. To be on the conservative side, then, proposed wind farms in Jefferson County would bring in about $5.5 million for Iberdrola, $3.5 million for Acciona, $6.2 million for BP Alternative Energy and $11.8 million for Babcock and Brown from the federal credit, which counts dollar-for-dollar against taxes the companies owe.
This development incentive is due to expire at the end of the year. Congress could reauthorize the program.
The end of the credit, Ms. Murphy said, "would be a major, major setback for all renewable energies."
When the credit expired previously at the end of 1999, 2001 and 2003, the installation of wind power dropped precipitously — from 73 percent after 2001 to 93 percent after 1999.
Opponents of wind power say the subsidies shouldn't be used in the first place.
"When you give subsidies, it disrupts the market forces and that's certainly the case with wind, too," Mr. Schleede said.
Ms. Murphy argues that all energy development is subsidized — even oil exploration.
"There's no free lunch on energy," she said.
STATE PAYMENTS
New York, like the federal tax credit, bases its incentive on actual power production. But it is a straight payment for production.
Renewable energy generators contract with the New York State Energy Research and Development Agency to provide a certain amount of energy at a set price.
The average amount per megawatt hour is $17, said Tom Lynch, NYSERDA's director of external affairs.
"They could be producing a lot more electricity than we're buying," he said.
If generators produce enough or aren't on line by a deadline, the company faces penalties.
Kevin C. Hale, senior project manager with NYSERDA, said, "They sign a contract and put up security, which is at risk if they don't come on line."
As in about 25 other states, New York buys the fact that this electricity is "green." They're called renewable energy credits. The contracts are paid by electric customers, through a surcharge on electric bills. The average surcharge has increased from less than $2 in 2006 to $3.30 in 2007 and $4.95 in 2008. The reason for the increase is the state goal of reaching 25 percent of the energy used in the state coming from renewable sources. Wind power is not the only source eligible for the program.
The state program, like the federal tax credit, lasts for 10 years and reassures potential investors that they will have a steady stream of income.
"It attracts private investment, because investors can see the state has a long-term commitment to renewable energy," Ms. Murphy said. "It shows investors, 'We're going to get at least some money from the REC payments.'"
LOW MARKET BIDS
She said wind generators, like hydropower generators, bid in the wholesale market at a very low price, which ensures that their energy will be purchased. So having at least $17 per megawatt hour guaranteed gives investors the assurance that they will make money.
After renewable sources bid in at low prices, oil and coal and other plants bid into the market at higher prices. All the generators are paid the same amount, which is the most that any single generator bids to get into the market.
Wind power opponents say the production from wind generators is not reliable and does not come at the time of greatest need.
"They produce at night in the cold months," Mr. Schleede said. "You can't count on windmills to be available at high-demand times, which are warm summer afternoons."
And as the subsidies continue, more of the interested developers are foreign-owned companies.
In Jefferson County, all four of the developers are based in other countries. Iberdrola is based in Spain, Acciona in Portugal, BP Alternative Energy in Great Britain and Babcock and Brown in Australia.
"I'd rather have that money stay in the U.S., in the hands of small towns in New York so people can spend it locally," Mr. Schleede said.
Money doesn't grow on trees, but it may grow on windmills.
The developers of the four proposed wind farms in Jefferson County could capitalize on tax breaks and incentives at the federal, state and local levels through their projects. Opponents say the subsidies take taxpayer money and give it to those who already are rich.
"It's the taxpayers and electric customers that are taken to the cleaners," said Glenn R. Schleede, a widely known wind power opponent who has worked for electric utilities and the federal Office of Management and Budget.
Supporters say the subsidies are needed to encourage environmentally friendly policy.
Carol E. Murphy, executive director of Alliance for Clean Energy New York, said, "Renewable energy is not going to happen unless those policies are in place."
In Jefferson County, potential local and federal tax breaks and state incentives will total $12.5 million for Iberdrola's Horse Creek Wind Farm, $13.8 million for BP Alternative Energy's Cape Vincent Wind Farm, $7.7 million for Acciona's St. Lawrence Wind Farm and $27.3 for Babcock and Brown's Hounsfield Wind Farm.
FEDERAL TAX CREDIT
The federal Production Tax Credit and state renewable energy credit system are based on a development's production.
The American Wind Energy Association's Web site says that wind turbines usually produce 25 percent to 40 percent of their rated capacity, so over a year, a farm rated at 100 megawatts likely would produce between 219,000 and 350,400 megawatt hours. The federal Production Tax Credit is $20 per megawatt produced. To be on the conservative side, then, proposed wind farms in Jefferson County would bring in about $5.5 million for Iberdrola, $3.5 million for Acciona, $6.2 million for BP Alternative Energy and $11.8 million for Babcock and Brown from the federal credit, which counts dollar-for-dollar against taxes the companies owe.
This development incentive is due to expire at the end of the year. Congress could reauthorize the program.
The end of the credit, Ms. Murphy said, "would be a major, major setback for all renewable energies."
When the credit expired previously at the end of 1999, 2001 and 2003, the installation of wind power dropped precipitously — from 73 percent after 2001 to 93 percent after 1999.
Opponents of wind power say the subsidies shouldn't be used in the first place.
"When you give subsidies, it disrupts the market forces and that's certainly the case with wind, too," Mr. Schleede said.
Ms. Murphy argues that all energy development is subsidized — even oil exploration.
"There's no free lunch on energy," she said.
STATE PAYMENTS
New York, like the federal tax credit, bases its incentive on actual power production. But it is a straight payment for production.
Renewable energy generators contract with the New York State Energy Research and Development Agency to provide a certain amount of energy at a set price.
The average amount per megawatt hour is $17, said Tom Lynch, NYSERDA's director of external affairs.
"They could be producing a lot more electricity than we're buying," he said.
If generators produce enough or aren't on line by a deadline, the company faces penalties.
Kevin C. Hale, senior project manager with NYSERDA, said, "They sign a contract and put up security, which is at risk if they don't come on line."
As in about 25 other states, New York buys the fact that this electricity is "green." They're called renewable energy credits. The contracts are paid by electric customers, through a surcharge on electric bills. The average surcharge has increased from less than $2 in 2006 to $3.30 in 2007 and $4.95 in 2008. The reason for the increase is the state goal of reaching 25 percent of the energy used in the state coming from renewable sources. Wind power is not the only source eligible for the program.
The state program, like the federal tax credit, lasts for 10 years and reassures potential investors that they will have a steady stream of income.
"It attracts private investment, because investors can see the state has a long-term commitment to renewable energy," Ms. Murphy said. "It shows investors, 'We're going to get at least some money from the REC payments.'"
LOW MARKET BIDS
She said wind generators, like hydropower generators, bid in the wholesale market at a very low price, which ensures that their energy will be purchased. So having at least $17 per megawatt hour guaranteed gives investors the assurance that they will make money.
After renewable sources bid in at low prices, oil and coal and other plants bid into the market at higher prices. All the generators are paid the same amount, which is the most that any single generator bids to get into the market.
Wind power opponents say the production from wind generators is not reliable and does not come at the time of greatest need.
"They produce at night in the cold months," Mr. Schleede said. "You can't count on windmills to be available at high-demand times, which are warm summer afternoons."
And as the subsidies continue, more of the interested developers are foreign-owned companies.
In Jefferson County, all four of the developers are based in other countries. Iberdrola is based in Spain, Acciona in Portugal, BP Alternative Energy in Great Britain and Babcock and Brown in Australia.
"I'd rather have that money stay in the U.S., in the hands of small towns in New York so people can spend it locally," Mr. Schleede said.
Residents group concerned about project conflicts over wind power
At least one Stark Town Board member and three town Zoning Board of Appeals members have signed leases with the developer behind the Jordanville Wind Project, according to Herkimer County property records.
Stark town officials said they have been paying close attention to these potential conflicts of interest and have followed legal advice to make sure they haven’t done anything wrong.
But officials from the Otsego 2000 residents group have sent a letter to the state Attorney General’s Office asking for an investigation into the practices of the developer of the project — Iberdrola Renewables, Otsego 2000 interim Executive Director Nicole Dillingham said.
Iberdrola Renewables is moving forward with a plan for a project that would include 40 wind turbines in southern Herkimer County, Communications Manager Paul Copleman said.
Dillingham said she is concerned because she believes the company:
* Improperly signed leases with Stark town officials.
* Pressed residents in Stark and Warren to sign leases that include stipulations that restrict residents from talking negatively about the project.
* Were involved with town meetings that resulted in a court decision stating the towns mishandled decisions about the project.
“That to me is really in conflict with home rule,” Dillingham said. “I think they’re taking advantage of these small communities.”
But Stark town officials said they have put great effort into avoiding conflicts of interest and handling the project appropriately.
“We spend more time trying to do that than we do trying to make the decisions themselves,” town Supervisor Richard Bronner said.
The rural town of Stark is just one of many locations in the state where people are questioning whether wind power production companies are inappropriately influencing officials making decisions about potential projects.
Officials in the state Attorney General’s Office are investigating two production companies developing projects in eight counties and have received complaints about additional companies in other counties, office spokesman John Milgrim said. He couldn’t confirm whether complaints were made in Herkimer County or against Iberdrola.
Herkimer County District Attorney John Crandall said he received a complaint regarding a Herkimer County wind project and referred it to Herkimer state police because he doesn’t have an investigative staff.
He wouldn’t be more specific about details of the complaint, and Herkimer state police Investigator Reese Treen said he wasn’t aware of a complaint.
The Stark truth
Town Councilman Thomas Puskarenko signed a lease with the wind company May 4, 2007, according to Herkimer County property records. Town Zoning Board of Appeals members Bruce Banks, Dave Hardy and John Skendara also signed leases with the developer, according to the property records.
Puskarenko, who had no comment, first abstained from a vote related to the wind project Feb. 7, 2006, according to Stark town records. From that point on and even after he signed the lease, he participated in some votes about the project and abstained from others, records show.
He didn’t attend a town meeting May 4, 2007. During that meeting, Bronner read a letter from Puskarenko stating that he wouldn’t participate in any future actions involving the project due to a conflict of interest because he might have a wind turbine constructed on his property, town records show.
Puskarenko has recused himself from all votes related to the project since submitting the letter, records show.
Iberdrola Renewables officials are surprised anyone would continue to question this situation because an Onondaga County Supreme Court decision Dec. 7, 2007, addressed the issue, Copleman said.
Judge Donald’s Greenwood’s decision discusses a claim that Puskarenko failed to disclose a conflict of interest.
“The court has reviewed these contentions and finds them to be without merit,” Greenwood said in his decision.
Iberdrola is not a subject of the Attorney General’s Office investigation, and the company strives to make the development process as transparent as possible with open, public meetings, Copleman said.
“If any transactions involve landowners who are elected or appointed officials related to the project, Iberdrola Renewables requests the recusal of those officials from related decision making,” he said.
‘I see no conflict’
The Zoning Board of Appeals members haven’t faced any conflict of interest concerns because their only authority is when someone files an appeal, member Banks said.
The board meets once per year but hasn’t received any appeals relating to the wind project – and actually hasn’t received any appeals at all during his service, Banks said.
“I see no conflict,” he said. “There’s no plausible conflict there.”
Banks said he would recuse himself if anything related to the wind project ever came before the board.
Hardy and Skendara could not be reached.
Bronner said it can be difficult to avoid potential conflicts of interest when such a large project is proposed in a small town, but he thinks it has been handled properly because officials have followed the advice of people who previously have been through this kind of thing.
It can be tough to even find people to serve on a board in a small town, Bronner said. It’s frustrating when some residents and organizations question their motivations, when they’re attempting to do the right thing.
“What we’re trying to do is what’s best for all the taxpayers – not just a couple who don’t approve of what’s going on,” he said.
‘A great concern’
Dillingham of Otsego 2000 said she knows Puskarenko does recuse himself from votes now.
“But it is a great concern that you have people sitting on the town board who are leaseholders on the project,” she said.
Dillingham also said Iberdrola contracts restrict landowners from speaking against the project and only pay them minimal amounts of money. Landowners receive a $1,000 bonus and $500 per year for five years, then royalties each year going forward, she said.
“It’s really a sad situation, I think, that these kinds of contracts are basically pushed on the communities,” she said. “I blame Iberdrola for this.”
Dillingham also mentioned Greenwood’s December 2007 court decision, which in addition to addressing the potential conflict of interest, resulted in a huge setback for the wind project.
Greenwood ruled the Warren Town Board failed to look closely enough at the project’s potential impact, and that the Warren and Stark town boards acted in violation of the state’s Open Meetings Law and Freedom of Information Law.
The decision deemed the project’s environmental studies null and void and awarded attorney’s fees to a group of residents who brought the lawsuit.
Steve Reichenbach, one of those residents and the interim president of Advocates for Stark, said he doesn’t think it is right that a town board member with a lease could partake in discussions and decisions about the project.
“I think that’s definitely a conflict of interest,” he said.
Reichenbach wouldn’t say whether he had filed any complaints.
Statewide investigation
An investigation into other wind companies in the state started in Franklin County, where county District Attorney Derek Champagne received complaints from residents who brought proof of lease-holding town officials voting on projects.
“That obviously was a huge red flag,” Champagne said. “Under general municipal law, that could easily be construed as unethical at a minimum and a crime at maximum.”
There were seven officials in Franklin County who had leases or family members with leases, he said, and complaints eventually came to him from more than 12 counties.
“It’s a problem that essentially is occurring all over the state of New York,” he said.
Concerned with the trend, Champagne began looking into why it was occurring and decided there needs to be a statewide energy policy that helps local towns deal with wind projects, which involve issues far more complicated than their town attorneys are used to dealing with, he said.
The investigation grew too large for Champagne and his staff, so he turned it all over to state Attorney General Andrew Cuomo, he said.
On July 15, the Attorney General’s Office announced an investigation into wind power companies First Wind and Noble Environmental Power. Combined, the companies have developed or are developing projects in eight counties.
The announcement states the investigation comes “amid allegations of improper dealings with public officials and anti-competitive practices.”
Cuomo said officials in his office will handle the issue.
“The use of wind power, like all renewable energy sources, should be encouraged to help clean our air and end our reliance on fossil fuels,” Cuomo said in a released statement.
“However, our public integrity remains a top priority of my office and if dirty tricks are used to facilitate even clean-energy projects, my office will put a stop to it.”
Stark town officials said they have been paying close attention to these potential conflicts of interest and have followed legal advice to make sure they haven’t done anything wrong.
But officials from the Otsego 2000 residents group have sent a letter to the state Attorney General’s Office asking for an investigation into the practices of the developer of the project — Iberdrola Renewables, Otsego 2000 interim Executive Director Nicole Dillingham said.
Iberdrola Renewables is moving forward with a plan for a project that would include 40 wind turbines in southern Herkimer County, Communications Manager Paul Copleman said.
Dillingham said she is concerned because she believes the company:
* Improperly signed leases with Stark town officials.
* Pressed residents in Stark and Warren to sign leases that include stipulations that restrict residents from talking negatively about the project.
* Were involved with town meetings that resulted in a court decision stating the towns mishandled decisions about the project.
“That to me is really in conflict with home rule,” Dillingham said. “I think they’re taking advantage of these small communities.”
But Stark town officials said they have put great effort into avoiding conflicts of interest and handling the project appropriately.
“We spend more time trying to do that than we do trying to make the decisions themselves,” town Supervisor Richard Bronner said.
The rural town of Stark is just one of many locations in the state where people are questioning whether wind power production companies are inappropriately influencing officials making decisions about potential projects.
Officials in the state Attorney General’s Office are investigating two production companies developing projects in eight counties and have received complaints about additional companies in other counties, office spokesman John Milgrim said. He couldn’t confirm whether complaints were made in Herkimer County or against Iberdrola.
Herkimer County District Attorney John Crandall said he received a complaint regarding a Herkimer County wind project and referred it to Herkimer state police because he doesn’t have an investigative staff.
He wouldn’t be more specific about details of the complaint, and Herkimer state police Investigator Reese Treen said he wasn’t aware of a complaint.
The Stark truth
Town Councilman Thomas Puskarenko signed a lease with the wind company May 4, 2007, according to Herkimer County property records. Town Zoning Board of Appeals members Bruce Banks, Dave Hardy and John Skendara also signed leases with the developer, according to the property records.
Puskarenko, who had no comment, first abstained from a vote related to the wind project Feb. 7, 2006, according to Stark town records. From that point on and even after he signed the lease, he participated in some votes about the project and abstained from others, records show.
He didn’t attend a town meeting May 4, 2007. During that meeting, Bronner read a letter from Puskarenko stating that he wouldn’t participate in any future actions involving the project due to a conflict of interest because he might have a wind turbine constructed on his property, town records show.
Puskarenko has recused himself from all votes related to the project since submitting the letter, records show.
Iberdrola Renewables officials are surprised anyone would continue to question this situation because an Onondaga County Supreme Court decision Dec. 7, 2007, addressed the issue, Copleman said.
Judge Donald’s Greenwood’s decision discusses a claim that Puskarenko failed to disclose a conflict of interest.
“The court has reviewed these contentions and finds them to be without merit,” Greenwood said in his decision.
Iberdrola is not a subject of the Attorney General’s Office investigation, and the company strives to make the development process as transparent as possible with open, public meetings, Copleman said.
“If any transactions involve landowners who are elected or appointed officials related to the project, Iberdrola Renewables requests the recusal of those officials from related decision making,” he said.
‘I see no conflict’
The Zoning Board of Appeals members haven’t faced any conflict of interest concerns because their only authority is when someone files an appeal, member Banks said.
The board meets once per year but hasn’t received any appeals relating to the wind project – and actually hasn’t received any appeals at all during his service, Banks said.
“I see no conflict,” he said. “There’s no plausible conflict there.”
Banks said he would recuse himself if anything related to the wind project ever came before the board.
Hardy and Skendara could not be reached.
Bronner said it can be difficult to avoid potential conflicts of interest when such a large project is proposed in a small town, but he thinks it has been handled properly because officials have followed the advice of people who previously have been through this kind of thing.
It can be tough to even find people to serve on a board in a small town, Bronner said. It’s frustrating when some residents and organizations question their motivations, when they’re attempting to do the right thing.
“What we’re trying to do is what’s best for all the taxpayers – not just a couple who don’t approve of what’s going on,” he said.
‘A great concern’
Dillingham of Otsego 2000 said she knows Puskarenko does recuse himself from votes now.
“But it is a great concern that you have people sitting on the town board who are leaseholders on the project,” she said.
Dillingham also said Iberdrola contracts restrict landowners from speaking against the project and only pay them minimal amounts of money. Landowners receive a $1,000 bonus and $500 per year for five years, then royalties each year going forward, she said.
“It’s really a sad situation, I think, that these kinds of contracts are basically pushed on the communities,” she said. “I blame Iberdrola for this.”
Dillingham also mentioned Greenwood’s December 2007 court decision, which in addition to addressing the potential conflict of interest, resulted in a huge setback for the wind project.
Greenwood ruled the Warren Town Board failed to look closely enough at the project’s potential impact, and that the Warren and Stark town boards acted in violation of the state’s Open Meetings Law and Freedom of Information Law.
The decision deemed the project’s environmental studies null and void and awarded attorney’s fees to a group of residents who brought the lawsuit.
Steve Reichenbach, one of those residents and the interim president of Advocates for Stark, said he doesn’t think it is right that a town board member with a lease could partake in discussions and decisions about the project.
“I think that’s definitely a conflict of interest,” he said.
Reichenbach wouldn’t say whether he had filed any complaints.
Statewide investigation
An investigation into other wind companies in the state started in Franklin County, where county District Attorney Derek Champagne received complaints from residents who brought proof of lease-holding town officials voting on projects.
“That obviously was a huge red flag,” Champagne said. “Under general municipal law, that could easily be construed as unethical at a minimum and a crime at maximum.”
There were seven officials in Franklin County who had leases or family members with leases, he said, and complaints eventually came to him from more than 12 counties.
“It’s a problem that essentially is occurring all over the state of New York,” he said.
Concerned with the trend, Champagne began looking into why it was occurring and decided there needs to be a statewide energy policy that helps local towns deal with wind projects, which involve issues far more complicated than their town attorneys are used to dealing with, he said.
The investigation grew too large for Champagne and his staff, so he turned it all over to state Attorney General Andrew Cuomo, he said.
On July 15, the Attorney General’s Office announced an investigation into wind power companies First Wind and Noble Environmental Power. Combined, the companies have developed or are developing projects in eight counties.
The announcement states the investigation comes “amid allegations of improper dealings with public officials and anti-competitive practices.”
Cuomo said officials in his office will handle the issue.
“The use of wind power, like all renewable energy sources, should be encouraged to help clean our air and end our reliance on fossil fuels,” Cuomo said in a released statement.
“However, our public integrity remains a top priority of my office and if dirty tricks are used to facilitate even clean-energy projects, my office will put a stop to it.”
Saturday, August 30, 2008
Iberdrola deal still up in the air
Despite the abrupt resignation of one of its members and a one- week delay in a vote on the matter, the New York State Public Service Commission expects to rule soon on Spanish energy giant Iberdrola SA's proposed $4.5 billion takeover of Energy East.
James Denn, a spokesperson for the agency, said on Thursday that a decision more than likely will be made Sept. 3.
The five-member commission had planned for several weeks to vote on the matter Wednesday but, at the last minute, decided not to do so due to the absence of two members -- Robert Curry Jr. and Cheryl Buley.
Curry was out due to illness, Denn said, while Buley later Wednesday announced plans to move to Kentucky to be married. Buley's move was unexpected, and it means she most likely will not take part in the Iberdrola vote, Denn said.
The commission rescheduled the vote to be taken during an emergency meeting Sept 3, at which time Buley's resignation also will become effective.
Denn said only Buley could respond to questions concerning why she could not wait until after the vote to resign. Buley was unreachable as of press time, but already has said publicly that her resignation had nothing to do with the Iberdrola deal.
It is not the first time the commissioner has been linked to controversy, according to reports from The Associated Press. After a series of power outages in New York City during the summer of 2006, Democrats questioned Buley's qualifications to serve on the commission. A former public relations executive, Buley was, at that time, married to a GOP lobbyist who donated thousands of dollars to Republicans. Buley later accused former Gov. Eliot Spitzer's energy advisor, Steven Mitnick, with threatening her career.
At an Aug. 20 commission hearing, Buley expressed skepticism regarding Iberdrola's promise to invest $2 billion in wind generation in New York, pointing out that wind farm developers are eligible for huge federal and state subsidies.
"I find it disingenuous that some of these elected officials are misleading their constituents by saying that wind power is cheap," Buley said, according to the meeting transcript. "It doesn't come cheap. And it's the ratepayers who are subsidizing it."
Iberdrola's $2 billion pledge has drawn approval from a number of state, federal and local elected officials on both sides of the aisle, including Democratic Sens. Hillary Clinton and Charles Schumer, Republican state Sen. Jim Alesi and Gov. David A. Paterson.
Buley earned $109,800 per year as a member of the commission and was appointed in June 2006 by former Gov. George Pataki. Her term was set to expire in February 2012.
Iberdrola is seeking the commission's approval to finalize the deal with Energy East, parent company of Rochester Gas & Electric and New York State Electric and Gas (NYSEG). Announced last year, the deal would provide Iberdrola, one of the largest producers of wind energy in the world, with an additional platform for growth within the United States. Energy East also owns power companies serving Connecticut, Massachusetts and Maine, and regulators in each of those states have given the buyout their blessing.
Supporters of the buyout tout promises by Iberdrola to set aside at least $100 million in ratepayer benefits, in addition to the $2 billion promised for wind turbine development. The proposal continues to hit difficulties, however. In reviewing the case, Department of Public Service staff issued a recommendation that the commission oppose the deal out of concerns it will not best serve the public in terms of cost and competitiveness.
A particular sticking point with the Public Service staff is Iberdrola's unwillingness to sell its interests in wind power generating plants within Energy East territory, particular in Lewis and Herkimer counties. The department supports the separation of energy producers and distributors in the name of promoting competition.
In June, PSC Administrative Law Judge Rafael Epstein affirmed the staff's position, stating the terms of the takeover do not satisfy the public interest requirement of New York's utilities law.
James Denn, a spokesperson for the agency, said on Thursday that a decision more than likely will be made Sept. 3.
The five-member commission had planned for several weeks to vote on the matter Wednesday but, at the last minute, decided not to do so due to the absence of two members -- Robert Curry Jr. and Cheryl Buley.
Curry was out due to illness, Denn said, while Buley later Wednesday announced plans to move to Kentucky to be married. Buley's move was unexpected, and it means she most likely will not take part in the Iberdrola vote, Denn said.
The commission rescheduled the vote to be taken during an emergency meeting Sept 3, at which time Buley's resignation also will become effective.
Denn said only Buley could respond to questions concerning why she could not wait until after the vote to resign. Buley was unreachable as of press time, but already has said publicly that her resignation had nothing to do with the Iberdrola deal.
It is not the first time the commissioner has been linked to controversy, according to reports from The Associated Press. After a series of power outages in New York City during the summer of 2006, Democrats questioned Buley's qualifications to serve on the commission. A former public relations executive, Buley was, at that time, married to a GOP lobbyist who donated thousands of dollars to Republicans. Buley later accused former Gov. Eliot Spitzer's energy advisor, Steven Mitnick, with threatening her career.
At an Aug. 20 commission hearing, Buley expressed skepticism regarding Iberdrola's promise to invest $2 billion in wind generation in New York, pointing out that wind farm developers are eligible for huge federal and state subsidies.
"I find it disingenuous that some of these elected officials are misleading their constituents by saying that wind power is cheap," Buley said, according to the meeting transcript. "It doesn't come cheap. And it's the ratepayers who are subsidizing it."
Iberdrola's $2 billion pledge has drawn approval from a number of state, federal and local elected officials on both sides of the aisle, including Democratic Sens. Hillary Clinton and Charles Schumer, Republican state Sen. Jim Alesi and Gov. David A. Paterson.
Buley earned $109,800 per year as a member of the commission and was appointed in June 2006 by former Gov. George Pataki. Her term was set to expire in February 2012.
Iberdrola is seeking the commission's approval to finalize the deal with Energy East, parent company of Rochester Gas & Electric and New York State Electric and Gas (NYSEG). Announced last year, the deal would provide Iberdrola, one of the largest producers of wind energy in the world, with an additional platform for growth within the United States. Energy East also owns power companies serving Connecticut, Massachusetts and Maine, and regulators in each of those states have given the buyout their blessing.
Supporters of the buyout tout promises by Iberdrola to set aside at least $100 million in ratepayer benefits, in addition to the $2 billion promised for wind turbine development. The proposal continues to hit difficulties, however. In reviewing the case, Department of Public Service staff issued a recommendation that the commission oppose the deal out of concerns it will not best serve the public in terms of cost and competitiveness.
A particular sticking point with the Public Service staff is Iberdrola's unwillingness to sell its interests in wind power generating plants within Energy East territory, particular in Lewis and Herkimer counties. The department supports the separation of energy producers and distributors in the name of promoting competition.
In June, PSC Administrative Law Judge Rafael Epstein affirmed the staff's position, stating the terms of the takeover do not satisfy the public interest requirement of New York's utilities law.
Wind Turbines; Offensive industrialization of human space
People are barking up the wrong tree by promoting, or succumbing to, wind turbine construction regardless of where it is proposed and how many there might be. Many North Americans are infected with tunnel vision and erroneously appear to believe that turbine generated energy is somehow linked to reversing the growth in and impact of Green House Gas (GHG) emissions.
There exists NO evidence anywhere that Turbine energy is substituting for or displacing fossil fuel dependence, nor is there any evidence that it is in any material way slowing the rate of GHG emission growth. Turbine energy is a non
factor in the never ending growth agenda of the fossil fuel industry, and it is not a factor in the agenda of governments promoting growth in and dependence on oil and gas consumption. There can be no better example than North America of the failure of turbine energy to slow growth in anything.
People have been hoodwinked into promoting wind turbine energy as some sort of Nirvana all while human population growth and per capita energy consumption continue to spiral upward. Turbine energy generation is fueling growth in human population and energy consumption and growth in a false “economy”. It is NOT doing the opposite. Matching the folly of the energy replacement misunderstanding is denial by governments and promoters of the ecological impacts and health effects of turbines; the ugly reality is that they are a serious addition to the industrialization of quiet rural landscapes that people have long valued for quality of life, retirement, and recreation.
Click to read entire report
There exists NO evidence anywhere that Turbine energy is substituting for or displacing fossil fuel dependence, nor is there any evidence that it is in any material way slowing the rate of GHG emission growth. Turbine energy is a non
factor in the never ending growth agenda of the fossil fuel industry, and it is not a factor in the agenda of governments promoting growth in and dependence on oil and gas consumption. There can be no better example than North America of the failure of turbine energy to slow growth in anything.
People have been hoodwinked into promoting wind turbine energy as some sort of Nirvana all while human population growth and per capita energy consumption continue to spiral upward. Turbine energy generation is fueling growth in human population and energy consumption and growth in a false “economy”. It is NOT doing the opposite. Matching the folly of the energy replacement misunderstanding is denial by governments and promoters of the ecological impacts and health effects of turbines; the ugly reality is that they are a serious addition to the industrialization of quiet rural landscapes that people have long valued for quality of life, retirement, and recreation.
Click to read entire report
Iberdrola fined by Spanish antitrust authority by Clare Watson
Spanish utility Iberdrola has been hit by an E38.7 million fine for abusing its position in the Spanish power market during parts of 2002 and 2003, according to Forbes.
The utility, which is hoping to acquire ScottishPower, is said to have abused its dominant position and created technical power shortages by manipulating the market. According to Bloomberg, however, Jose Luis Gonzalez Besada, Iberdrola's spokesman, has said that the company will appeal the competition tribunal's penalty.
The publication cited the spokesman as maintaining that the utility's generating division did not break any antitrust market regulations. Nevertheless, the company's stock has dropped by 0.6% following the news.
(Click to read the entire 16th March 2007 news report)
The utility, which is hoping to acquire ScottishPower, is said to have abused its dominant position and created technical power shortages by manipulating the market. According to Bloomberg, however, Jose Luis Gonzalez Besada, Iberdrola's spokesman, has said that the company will appeal the competition tribunal's penalty.
The publication cited the spokesman as maintaining that the utility's generating division did not break any antitrust market regulations. Nevertheless, the company's stock has dropped by 0.6% following the news.
(Click to read the entire 16th March 2007 news report)
Iberdrola deal on the line as PSC vote nears by LARRY RULISON
ALBANY -- Iberdrola SA could walk away from its $4.5 billion merger with Energy East Corp. if state regulators try to extract too much money from the Spanish utility.
Just a few days from a vote by the Public Service Commission, one of the biggest questions surrounding the deal appears to be just how much Iberdrola will be required to share with customers.
In the past, the five-member PSC, which regulates utilities in New York, has required so-called "positive benefit adjustments" typically used to lower rates for gas and electric service. The so-called PBAs help satisfy the need for the commission to find public benefits before approving such large mergers.
It remains unclear how much in PBAs the commission will require when it votes on the Iberdrola deal Wednesday in Albany.
According to testimony offered this week to PSC commissioners by senior advisory staff, Iberdrola could decide to walk away from the merger if it feels the PBAs are too onerous.
In a hearing before the PSC on Aug. 20, staff had suggested three different scenarios that involved between $202 million and $300 million in PBAs.
Two of the scenarios involved sharing earnings with consumers, while the third called for a rate case before the PSC in which the agency could potentially reset Iberdrola's electric and gas rates in upstate New York.
The stakes are high for consumers. Energy East, the Maine-based company that Iberdrola wants to acquire, operates New York State Electric & Gas and Rochester Gas & Electric, which have 1.7 million customers in upstate New York.
However, at this week's PSC meeting, senior staff member John Stewart noted there was a risk in choosing any option that included sharing earnings, since Iberdrola has opposed such requirements in testimony its has given in the case. The proposed acquisition has been before the PSC for a year.
"There is some risk that the transaction could not be consummated," he said.
Stewart said perhaps the best option for the commissioners to consider would be $275 million in PBAs, with a rate case started within 12 to 18 months.
Some of the commissioners and staff debated whether Iberdrola would be able to cut costs at Energy East and therefore extract more earnings from the company. Under an earnings sharing scenario, those earnings would be shared with customers, lowering rates.
However, some said it would be difficult for Iberdrola to find enough synergies with Energy East in the short term to significantly raise earnings before a rate case would begin.
Commissioner Maureen Harris was also concerned that the $275 million number was arbitrary and perhaps not enough.
Previously, PSC staff had been seeking more than $600 million in PBAs, more than triple than the $202 million that Iberdrola has said it is willing to pay.
Stewart said the $275 million number was chosen because it was in the middle of what staff thought was an acceptable range between $250 million and $300 million.
"All we're talking about is the risks," Harris said. "I don't want to look a gift horse in the mouth, but I'm concerned. I'm really concerned about the level of PBAs we're discussing."
Just a few days from a vote by the Public Service Commission, one of the biggest questions surrounding the deal appears to be just how much Iberdrola will be required to share with customers.
In the past, the five-member PSC, which regulates utilities in New York, has required so-called "positive benefit adjustments" typically used to lower rates for gas and electric service. The so-called PBAs help satisfy the need for the commission to find public benefits before approving such large mergers.
It remains unclear how much in PBAs the commission will require when it votes on the Iberdrola deal Wednesday in Albany.
According to testimony offered this week to PSC commissioners by senior advisory staff, Iberdrola could decide to walk away from the merger if it feels the PBAs are too onerous.
In a hearing before the PSC on Aug. 20, staff had suggested three different scenarios that involved between $202 million and $300 million in PBAs.
Two of the scenarios involved sharing earnings with consumers, while the third called for a rate case before the PSC in which the agency could potentially reset Iberdrola's electric and gas rates in upstate New York.
The stakes are high for consumers. Energy East, the Maine-based company that Iberdrola wants to acquire, operates New York State Electric & Gas and Rochester Gas & Electric, which have 1.7 million customers in upstate New York.
However, at this week's PSC meeting, senior staff member John Stewart noted there was a risk in choosing any option that included sharing earnings, since Iberdrola has opposed such requirements in testimony its has given in the case. The proposed acquisition has been before the PSC for a year.
"There is some risk that the transaction could not be consummated," he said.
Stewart said perhaps the best option for the commissioners to consider would be $275 million in PBAs, with a rate case started within 12 to 18 months.
Some of the commissioners and staff debated whether Iberdrola would be able to cut costs at Energy East and therefore extract more earnings from the company. Under an earnings sharing scenario, those earnings would be shared with customers, lowering rates.
However, some said it would be difficult for Iberdrola to find enough synergies with Energy East in the short term to significantly raise earnings before a rate case would begin.
Commissioner Maureen Harris was also concerned that the $275 million number was arbitrary and perhaps not enough.
Previously, PSC staff had been seeking more than $600 million in PBAs, more than triple than the $202 million that Iberdrola has said it is willing to pay.
Stewart said the $275 million number was chosen because it was in the middle of what staff thought was an acceptable range between $250 million and $300 million.
"All we're talking about is the risks," Harris said. "I don't want to look a gift horse in the mouth, but I'm concerned. I'm really concerned about the level of PBAs we're discussing."
Some people don't want the turbines
Why are wind turbines being rammed down the throats of people who don't want them? They are fine for people who want them, but if their neighbors don't want that noise, why isn't there help for them? I know people who are being forced to move because their neighbor wants the turbines, and the company is putting them within 500 to 750 feet from the home of the people who don't want them.
Why isn't the distance longer when the turbines are placed near a neighbor who doesn't want them? Probably because the company doesn't make much money if the turbines are placed too far apart.
David Docteur from Cape Vincent recently wrote an excellent letter to the Times after visiting the Maple Ridge turbines and interviewing neighbors. Most of the people complained about the noise and the fact that they couldn't get a decent night's sleep. I would think that would tell somebody that the distances should be far greater than 750 feet between the turbines and a neighbor. Why isn't it a mile? I don't think it's fair that these people who don't want turbines near their home are being denied any help.
They have lost their freedom to live where they want.
Sally L' Huillier
Brownville
Why isn't the distance longer when the turbines are placed near a neighbor who doesn't want them? Probably because the company doesn't make much money if the turbines are placed too far apart.
David Docteur from Cape Vincent recently wrote an excellent letter to the Times after visiting the Maple Ridge turbines and interviewing neighbors. Most of the people complained about the noise and the fact that they couldn't get a decent night's sleep. I would think that would tell somebody that the distances should be far greater than 750 feet between the turbines and a neighbor. Why isn't it a mile? I don't think it's fair that these people who don't want turbines near their home are being denied any help.
They have lost their freedom to live where they want.
Sally L' Huillier
Brownville
Friday, August 29, 2008
PSC to vote on Iberdrola’s proposed Energy East acquisition Sept. 3
The state Public Service Commission is scheduled to vote Sept. 3 on a proposal from Spanish utility Iberdrola’s to buy Energy East Corp.
A vote scheduled for Aug. 27 was postponed as a result of two of the five PSC commissioners were absent—Robert Curry, who was sick, and Cheryl Buley. Buley has since announced her resignation from the PSC. Buley is getting married and moving out of the state.
The commission vote will cap a review and negotiation process lasting more than a year.
“It’s not an insubstantial proceeding, so they opted to wait for their fellow commissioners,” said commission spokesman James Denn.
Buley’s absence from the board leaves the commission with four voters who will decide whether to accept Iberdrola’s proposed takeover of Energy East (NYSE: EAS), worth $4.5 billion. An Energy East subsidiary, New York State Electric & Gas, has 63,000 customers in the Albany, N.Y., area.
By default, Iberdrola’s proposal will be rejected if commissioners split 2-2 on the issue, Denn said.
Iberdrola says it will invest at least $2 billion in wind-power generation in the state if it is permitted to acquire Energy East. Iberdrola has also agreed to several hundred million dollars in up-front benefits to consumers, including through reduced rates.
Organizations have come out on both sides of the deal. The New York Consumer Protection Board and state Department of Environmental Conservation support the acquisition.
But Independent Power Producers of New York Inc., whose members generate 75 percent of the state’s electricity, oppose it. IPPNY argues that Iberdrola, which is the second-largest wind energy operator in the U.S., should not be able to produce and provide power.
The state prohibits “vertical market power,” or the ability for power providers to also operate as power generators.
The bid is supported by key members of the state Legislature, as well as U.S. Senator Charles Schumer, D-NY, and Gov. David Paterson.
A vote scheduled for Aug. 27 was postponed as a result of two of the five PSC commissioners were absent—Robert Curry, who was sick, and Cheryl Buley. Buley has since announced her resignation from the PSC. Buley is getting married and moving out of the state.
The commission vote will cap a review and negotiation process lasting more than a year.
“It’s not an insubstantial proceeding, so they opted to wait for their fellow commissioners,” said commission spokesman James Denn.
Buley’s absence from the board leaves the commission with four voters who will decide whether to accept Iberdrola’s proposed takeover of Energy East (NYSE: EAS), worth $4.5 billion. An Energy East subsidiary, New York State Electric & Gas, has 63,000 customers in the Albany, N.Y., area.
By default, Iberdrola’s proposal will be rejected if commissioners split 2-2 on the issue, Denn said.
Iberdrola says it will invest at least $2 billion in wind-power generation in the state if it is permitted to acquire Energy East. Iberdrola has also agreed to several hundred million dollars in up-front benefits to consumers, including through reduced rates.
Organizations have come out on both sides of the deal. The New York Consumer Protection Board and state Department of Environmental Conservation support the acquisition.
But Independent Power Producers of New York Inc., whose members generate 75 percent of the state’s electricity, oppose it. IPPNY argues that Iberdrola, which is the second-largest wind energy operator in the U.S., should not be able to produce and provide power.
The state prohibits “vertical market power,” or the ability for power providers to also operate as power generators.
The bid is supported by key members of the state Legislature, as well as U.S. Senator Charles Schumer, D-NY, and Gov. David Paterson.
First Wind Project Latest Accident
Contractor overturn vehicle is just the latest accident in Cohocton. The liability risk to the entire town is real. The Town of Cohocton still does not have the from First Wind the insurance coverage that is part of the agreement to build the project.
Other accidents were never turned in or an accident report filed. Was this one reported?
Cohocton Town Board August 29, 2008 Letter by Judith Hall
8/29/08
Judith Hall
5029 Moore Road
Cohocton, NY 14826
585 534-5581
Jack Zigenfus, Supervisor
Cohocton Town Board
15 S Main Street
Cohocton, NY 14826
Dear Mr. Zigenfus and Board Members,
I have requested numerous times proof of the $20,000,000 general liability insurance policy required by the Special Use Permits. Since no proof has been supplied to date one would have to assume there is none in place. Please see the attached letter notifying Mr. Bob it is his responsibility to assure all requirements of the Special Use Permit are being met. It is your responsibility to ensure he is performing his duties. It is extreme malfeasance on both of your parts not to protect the Town and residents of Cohocton. You are putting the taxpayers at unnecessary risk with your callous attitude toward UPC/First Wind not complying with the laws you wrote and approved. Yesterday there was yet another accident involving construction workers. There have been numerous prior accidents on the job site and roadways of Cohocton due to construction. The fact that you have allowed the project to continue without the required insurance coverage in place is malfeasance.
Once again the board gives the appearance of special treatment for UPC/First Wind. One wonders why you do not enforce town law as is you sworn duty.
Cordially,
Judith Hall
cc: Anita Putnam, Zoning Board of Appeals
Cohocton Planning Board
Steven Blow, PSC
SCIDA
Judith Hall
5029 Moore Road
Cohocton, NY 14826
585 534-5581
Jack Zigenfus, Supervisor
Cohocton Town Board
15 S Main Street
Cohocton, NY 14826
Dear Mr. Zigenfus and Board Members,
I have requested numerous times proof of the $20,000,000 general liability insurance policy required by the Special Use Permits. Since no proof has been supplied to date one would have to assume there is none in place. Please see the attached letter notifying Mr. Bob it is his responsibility to assure all requirements of the Special Use Permit are being met. It is your responsibility to ensure he is performing his duties. It is extreme malfeasance on both of your parts not to protect the Town and residents of Cohocton. You are putting the taxpayers at unnecessary risk with your callous attitude toward UPC/First Wind not complying with the laws you wrote and approved. Yesterday there was yet another accident involving construction workers. There have been numerous prior accidents on the job site and roadways of Cohocton due to construction. The fact that you have allowed the project to continue without the required insurance coverage in place is malfeasance.
Once again the board gives the appearance of special treatment for UPC/First Wind. One wonders why you do not enforce town law as is you sworn duty.
Cordially,
Judith Hall
cc: Anita Putnam, Zoning Board of Appeals
Cohocton Planning Board
Steven Blow, PSC
SCIDA
Wind power isn't the answer
Wind power has its roots in small-scale implementations, and at this level it has some value. This was the case for the leader in wind development for most of the 20th century, the United States, and for European countries such as Denmark and Germany. Because of attractive government subsidization, a wind turbine industry was born and industrial wind plants emerged.
As Denmark and Germany have discovered, though, once wind power approaches mid-to-high single digits as a percentage of the total capacity of the electricity system, the problems of its unreliable and highly fluctuating nature become evident. At this level, wind power's sole effect is to stress the electricity grid and the shadowing backup power plants, the latter being necessary to supply a steady, reliable supply of electricity. Any further expansion decreases wind power's value from ineffective and problematic to nonsensical.
There is a large energy content worldwide in wind and solar power, but there are considerable practical difficulties in harvesting it. Solar power will likely be the winner, but not for decades, and Germany is now taking a substantial interest in it. This could be the exit strategy from Germany's extensive, premature and ineffectual implementation of industrial wind power.
In the meantime, Germany is implementing 25,000 megawatts worth of new coal plants over the next few years, which is almost the total generation capacity of Ontario. If it goes ahead with the planned removal of its nuclear plants by 2021, the increase in CO2 emissions will be 100 million tons per year. Germany's $40-billion investment in wind power has made little, if any, difference.
Conventional wisdom, of which public opinion is a component, supports industrial wind power well beyond its negligible merits for electricity generation and CO2 emissions reduction. Although not well-informed, this popular view is understandable because of concerns about climate change, media hype, political policies that claim to address this issue, pronouncements by environmentalists stepping outside their area of expertise, and effective promotion by wind power organizations. Europe is looked to, undeservedly, as a model. This drives a political motivation for governments to take action in support of wind power, and for opposition parties to criticize any apparent lack of action. It has made having "green" credentials a political necessity.
We are about to learn for ourselves what the Europeans already know but are not overly open and direct about: that wind power is ineffective above small, community-based implementations. Having developed the necessary industries, the Europeans are more than happy to sell us large wind turbines, or, alternatively, to build manufacturing plants here (with considerable financial assistance to them from our governments, of course).
Kent Hawkins Picton
As Denmark and Germany have discovered, though, once wind power approaches mid-to-high single digits as a percentage of the total capacity of the electricity system, the problems of its unreliable and highly fluctuating nature become evident. At this level, wind power's sole effect is to stress the electricity grid and the shadowing backup power plants, the latter being necessary to supply a steady, reliable supply of electricity. Any further expansion decreases wind power's value from ineffective and problematic to nonsensical.
There is a large energy content worldwide in wind and solar power, but there are considerable practical difficulties in harvesting it. Solar power will likely be the winner, but not for decades, and Germany is now taking a substantial interest in it. This could be the exit strategy from Germany's extensive, premature and ineffectual implementation of industrial wind power.
In the meantime, Germany is implementing 25,000 megawatts worth of new coal plants over the next few years, which is almost the total generation capacity of Ontario. If it goes ahead with the planned removal of its nuclear plants by 2021, the increase in CO2 emissions will be 100 million tons per year. Germany's $40-billion investment in wind power has made little, if any, difference.
Conventional wisdom, of which public opinion is a component, supports industrial wind power well beyond its negligible merits for electricity generation and CO2 emissions reduction. Although not well-informed, this popular view is understandable because of concerns about climate change, media hype, political policies that claim to address this issue, pronouncements by environmentalists stepping outside their area of expertise, and effective promotion by wind power organizations. Europe is looked to, undeservedly, as a model. This drives a political motivation for governments to take action in support of wind power, and for opposition parties to criticize any apparent lack of action. It has made having "green" credentials a political necessity.
We are about to learn for ourselves what the Europeans already know but are not overly open and direct about: that wind power is ineffective above small, community-based implementations. Having developed the necessary industries, the Europeans are more than happy to sell us large wind turbines, or, alternatively, to build manufacturing plants here (with considerable financial assistance to them from our governments, of course).
Kent Hawkins Picton
Clipper Windpower says First Wind project in U.S. gets funding from Lehman Bros
LONDON (Thomson Financial) - Clipper Windpower PLC. said First Wind, an independent developer of wind power in the United States, has today confirmed that Lehman Brothers Holdings, Inc. has funded a tax equity investment in the 20
megawatt (MW) Steel Winds wind power project operating in Lackawanna, N.Y.
This project was built with the first eight 2.5 MW Clipper 'Liberty' turbines produced at Clipper's Cedar Rapids facility. Liberty is the largest wind turbine
built in the Americas.
megawatt (MW) Steel Winds wind power project operating in Lackawanna, N.Y.
This project was built with the first eight 2.5 MW Clipper 'Liberty' turbines produced at Clipper's Cedar Rapids facility. Liberty is the largest wind turbine
built in the Americas.
First Wind Obtains Tax Equity Financing for its Steel Winds Power Project
BOSTON, Aug 28, 2008 (BUSINESS WIRE) -- First Wind, an independent developer of wind power in the United States, today announced that Lehman Brothers Holdings. Inc. has funded a tax equity investment in the 20 megawatt (MW) Steel Winds wind power project operating in Lackawanna, N.Y.
This project was built with the first eight 2.5 MW Clipper "Liberty" turbines produced at Clipper's Cedar Rapids facility.
"We're pleased to close and fund this tax equity financing of Clipper turbines with one of the world's top investment banks," said Tim Rosenzweig, First Wind's SVP of Finance. "The Lehman Brothers financing follows the successful turbine supply and construction loans for Clipper equipment we closed with HSH Nordbank and Nord LB last year."
(Click to read entire press release)
This project was built with the first eight 2.5 MW Clipper "Liberty" turbines produced at Clipper's Cedar Rapids facility.
"We're pleased to close and fund this tax equity financing of Clipper turbines with one of the world's top investment banks," said Tim Rosenzweig, First Wind's SVP of Finance. "The Lehman Brothers financing follows the successful turbine supply and construction loans for Clipper equipment we closed with HSH Nordbank and Nord LB last year."
(Click to read entire press release)
Big wind Boone-doggle by Michelle Malkin
Mr. Pickens and Mrs. Pelosi share the same talking points downplaying the need to drill and open up more access to American oil. Instead, the Pickens pie-in-the-sky plan proposes to replace natural gas with wind power in electricity generation and theoretically free up natural gas for America's transportation needs. All well and good in la-la land, but let's be real about the limitations and costs of wind power.
House Speaker Nancy Pelosi recently called congressional Republicans who want up-or-down drilling votes "hand maidens of the oil companies." Let's call Mrs. Pelosi what she is: House girl of the Big Wind boondogglers.
Though she seemingly backtracked on labeling drilling a "hoax" this week, Mrs. Pelosi refuses to consider Republican energy proposals that don't include massive subsidies for so-called eco-alternatives that have never panned out.
That brings us to Madame Speaker's 2007 financial disclosure form. Schedule III lists "Assets and 'Unearned Income"' of between $100,001-$250,000 from Clean Energy Fuels Corp. - Public Common Stock. Clean Energy Fuels Corp. (CLNE) is a natural gas provider founded by T. Boone Pickens. Yep, that T. Boone Pickens - former oilman turned wind-power evangelist whose ads touting a national wind campaign are now as ubiquitous as Viagra promos.
Mr. Pickens and Mrs. Pelosi share the same talking points downplaying the need to drill and open up more access to American oil. Instead, the Pickens pie-in-the-sky plan proposes to replace natural gas with wind power in electricity generation and theoretically free up natural gas for America's transportation needs.
All well and good in la-la land, but let's be real about the limitations and costs of wind power. Past and ongoing experience demonstrates the unreliability of wind and the miserably low operating capacity of wind power facilities here and around the world. Depending on wind requires supplemental fossil fuel plants as backup to be turned on and off to compensate for wind power supply shortfalls - nullifying any reductions in carbon dioxide emissions, which are minuscule, according to the National Academy of Sciences.
Not to mention the thousands of sliced-up birds and other wildlife that have become wind power casualties - a problem scientists say would be solved by "repowering" old turbines at a cost of untold billions.
Fittingly, the environmental mascot of the Democratic National Convention - the showcase of their alternative energy approach - is an eastern Colorado wind turbine propped up with Democratic carbon-credit funds that has never produced any substantial energy because of its chronic equipment malfunctions. But I digress.
Naturally, the Pickens Big Wind plan is proudly endorsed by Do-Nothing Pelosi's friends at the obstructionist Sierra Club. Through another company, Mesa Power, Mr. Pickens has committed upward of $12 billion in wind farms on the Texas Panhandle. CLNE and Mesa Power are separate entities, but what benefits one piece of the Pickens puzzle benefits them all. The wind venture, as Mr. Pickens himself acknowledges, depends on permanent federal subsidies.
Mr. Pickens is banking on 'em. And Mrs. Pelosi is banking on him.
As reported on dontgomovement.com, Mrs. Pelosi bought between $50,000 and $100,000 worth of stock in Mr. Pickens' CLNE Corp. in May 2007 on the day of the initial public offering:
"She, and other investors, stand to gain a substantial return on their investment if gasoline prices stay high, and municipal, state and even the federal governments start using natural gas as their primary fuel source. If gasoline prices fall? Alternative fuels and the cost to convert fleets over to them become less and less attractive."
CLNE also happens to be the sponsor of Proposition 10, a ballot initiative in Mrs. Pelosi's home state of California to dole out a combined $10 billion in state and federal funds for renewable energy incentives - namely, natural gas and wind.
Follow the money. Or, to put it in economist's terms as energy analyst Kenneth Medlock III did in an interview with the Dallas Morning News about the Pickens multibillion-dollar wind farm investment: "A lot of what he's trying to do is add value to a stranded asset... he's obviously got millions of dollars on the line."
And so, potentially, does the Democratic Speaker of the House - all the while wagging her finger at the financial motivation of others.
House Speaker Nancy Pelosi recently called congressional Republicans who want up-or-down drilling votes "hand maidens of the oil companies." Let's call Mrs. Pelosi what she is: House girl of the Big Wind boondogglers.
Though she seemingly backtracked on labeling drilling a "hoax" this week, Mrs. Pelosi refuses to consider Republican energy proposals that don't include massive subsidies for so-called eco-alternatives that have never panned out.
That brings us to Madame Speaker's 2007 financial disclosure form. Schedule III lists "Assets and 'Unearned Income"' of between $100,001-$250,000 from Clean Energy Fuels Corp. - Public Common Stock. Clean Energy Fuels Corp. (CLNE) is a natural gas provider founded by T. Boone Pickens. Yep, that T. Boone Pickens - former oilman turned wind-power evangelist whose ads touting a national wind campaign are now as ubiquitous as Viagra promos.
Mr. Pickens and Mrs. Pelosi share the same talking points downplaying the need to drill and open up more access to American oil. Instead, the Pickens pie-in-the-sky plan proposes to replace natural gas with wind power in electricity generation and theoretically free up natural gas for America's transportation needs.
All well and good in la-la land, but let's be real about the limitations and costs of wind power. Past and ongoing experience demonstrates the unreliability of wind and the miserably low operating capacity of wind power facilities here and around the world. Depending on wind requires supplemental fossil fuel plants as backup to be turned on and off to compensate for wind power supply shortfalls - nullifying any reductions in carbon dioxide emissions, which are minuscule, according to the National Academy of Sciences.
Not to mention the thousands of sliced-up birds and other wildlife that have become wind power casualties - a problem scientists say would be solved by "repowering" old turbines at a cost of untold billions.
Fittingly, the environmental mascot of the Democratic National Convention - the showcase of their alternative energy approach - is an eastern Colorado wind turbine propped up with Democratic carbon-credit funds that has never produced any substantial energy because of its chronic equipment malfunctions. But I digress.
Naturally, the Pickens Big Wind plan is proudly endorsed by Do-Nothing Pelosi's friends at the obstructionist Sierra Club. Through another company, Mesa Power, Mr. Pickens has committed upward of $12 billion in wind farms on the Texas Panhandle. CLNE and Mesa Power are separate entities, but what benefits one piece of the Pickens puzzle benefits them all. The wind venture, as Mr. Pickens himself acknowledges, depends on permanent federal subsidies.
Mr. Pickens is banking on 'em. And Mrs. Pelosi is banking on him.
As reported on dontgomovement.com, Mrs. Pelosi bought between $50,000 and $100,000 worth of stock in Mr. Pickens' CLNE Corp. in May 2007 on the day of the initial public offering:
"She, and other investors, stand to gain a substantial return on their investment if gasoline prices stay high, and municipal, state and even the federal governments start using natural gas as their primary fuel source. If gasoline prices fall? Alternative fuels and the cost to convert fleets over to them become less and less attractive."
CLNE also happens to be the sponsor of Proposition 10, a ballot initiative in Mrs. Pelosi's home state of California to dole out a combined $10 billion in state and federal funds for renewable energy incentives - namely, natural gas and wind.
Follow the money. Or, to put it in economist's terms as energy analyst Kenneth Medlock III did in an interview with the Dallas Morning News about the Pickens multibillion-dollar wind farm investment: "A lot of what he's trying to do is add value to a stranded asset... he's obviously got millions of dollars on the line."
And so, potentially, does the Democratic Speaker of the House - all the while wagging her finger at the financial motivation of others.
Thursday, August 28, 2008
Vote delayed on Iberdrola deal by LARRY RULISON
ALBANY -- The state Public Service Commission put Iberdrola SA's $4.5 billion acquisition of Energy East Corp. on hold for a week Wednesday after two of its five members could not attend a special hearing to vote on the plan.
The vote might have taken place had one of the commissioners, Robert Curry Jr., not fallen ill with what was described as a stomach bug.
The other commissioner to miss the meeting, Cheryl Buley, has decided to resign from the PSC for personal reasons. Her departure from the $109,800-a-year job will take effect next Wednesday, but it's unclear at this point if she will attend that day's meeting and cast a vote.
News that a vote would not occur was met with surprise by the dozens of attorneys, lobbyists and journalists who attended Wednesday's meeting. Iberdrola, the world's largest wind farm developer, first brought the proposed merger to the PSC a year ago for approval. The Spanish utility had hoped the deal would be completed by June.
A local Iberdrola spokesman who attended the meeting said it was unlikely the company would comment on the delay.
Buley, who was appointed to the PSC two years ago, said her resignation had nothing to do with the Iberdrola case: She's leaving the PSC to move to Kentucky and marry.
She called it a happy time and said it was just a matter of putting her personal life before her professional life. "I'll really miss the intellectual challenge there (at the PSC)," she said.
Buley said she expected a statement about her departure to be read before Wednesday's hearing.
In the statement, she talks about broad energy and free-market policies in the state and thanks the PSC staff and her fellow commissioners. The statement did not address the Iberdrola case specifically.
At last week's PSC meeting, Buley was critical of Iberdrola's promises of investing $2 billion in wind generation in the state, noting that developers get huge federal and state subsidies to build wind farms. Iberdrola has said the investment is one of the reasons the deal would benefit consumers and should be approved.
"It really is not as captivating as it might appear," Buley said at the Aug. 20 meeting. "It's the ratepayers who are subsidizing it."
The commissioners are now expected to vote on the acquisition at a hearing scheduled Sept. 3 in Albany.
Several substantial issues were raised at Wednesday's meeting, including whether Iberdrola is being looked at as part of Attorney General Andrew Cuomo's investigation into allegations of anti-competitive practices by wind power companies in New York.
Two companies, First Wind of Newton, Mass., and Noble Environmental Power of Essex, Conn., have been served with subpoenas.
However, PSC commissioner Patricia Acampora asked senior PSC staff Wednesday if they knew whether Iberdrola also was being investigated, since company subsidiaries have stakes in many different wind companies and projects.
She was told by a PSC attorney that Cuomo's investigation is confidential and neither the commissioners nor their attorneys could be supplied with that information.
"That, really, I think, is ridiculous -- for the record," Acampora said.
Commissioner Maureen Harris also expressed concern about Iberdrola's ability to manipulate wholesale electric prices in the state if it is allowed to own transmission and distribution lines as well as generation facilities. State policies prohibit ownership of both, although exceptions can be made.
Senior PSC staff have told the commissioners they do not believe major problems with the merger and price manipulation exist, although they have suggested a number of conditions to place on the deal to mitigate potential risks of what is known as vertical market power.
"It's still a very big concern for me," Harris said. Rulison can be reached at 454-5504 or by e-mail at lrulison@timesunion.com.
The vote might have taken place had one of the commissioners, Robert Curry Jr., not fallen ill with what was described as a stomach bug.
The other commissioner to miss the meeting, Cheryl Buley, has decided to resign from the PSC for personal reasons. Her departure from the $109,800-a-year job will take effect next Wednesday, but it's unclear at this point if she will attend that day's meeting and cast a vote.
News that a vote would not occur was met with surprise by the dozens of attorneys, lobbyists and journalists who attended Wednesday's meeting. Iberdrola, the world's largest wind farm developer, first brought the proposed merger to the PSC a year ago for approval. The Spanish utility had hoped the deal would be completed by June.
A local Iberdrola spokesman who attended the meeting said it was unlikely the company would comment on the delay.
Buley, who was appointed to the PSC two years ago, said her resignation had nothing to do with the Iberdrola case: She's leaving the PSC to move to Kentucky and marry.
She called it a happy time and said it was just a matter of putting her personal life before her professional life. "I'll really miss the intellectual challenge there (at the PSC)," she said.
Buley said she expected a statement about her departure to be read before Wednesday's hearing.
In the statement, she talks about broad energy and free-market policies in the state and thanks the PSC staff and her fellow commissioners. The statement did not address the Iberdrola case specifically.
At last week's PSC meeting, Buley was critical of Iberdrola's promises of investing $2 billion in wind generation in the state, noting that developers get huge federal and state subsidies to build wind farms. Iberdrola has said the investment is one of the reasons the deal would benefit consumers and should be approved.
"It really is not as captivating as it might appear," Buley said at the Aug. 20 meeting. "It's the ratepayers who are subsidizing it."
The commissioners are now expected to vote on the acquisition at a hearing scheduled Sept. 3 in Albany.
Several substantial issues were raised at Wednesday's meeting, including whether Iberdrola is being looked at as part of Attorney General Andrew Cuomo's investigation into allegations of anti-competitive practices by wind power companies in New York.
Two companies, First Wind of Newton, Mass., and Noble Environmental Power of Essex, Conn., have been served with subpoenas.
However, PSC commissioner Patricia Acampora asked senior PSC staff Wednesday if they knew whether Iberdrola also was being investigated, since company subsidiaries have stakes in many different wind companies and projects.
She was told by a PSC attorney that Cuomo's investigation is confidential and neither the commissioners nor their attorneys could be supplied with that information.
"That, really, I think, is ridiculous -- for the record," Acampora said.
Commissioner Maureen Harris also expressed concern about Iberdrola's ability to manipulate wholesale electric prices in the state if it is allowed to own transmission and distribution lines as well as generation facilities. State policies prohibit ownership of both, although exceptions can be made.
Senior PSC staff have told the commissioners they do not believe major problems with the merger and price manipulation exist, although they have suggested a number of conditions to place on the deal to mitigate potential risks of what is known as vertical market power.
"It's still a very big concern for me," Harris said. Rulison can be reached at 454-5504 or by e-mail at lrulison@timesunion.com.
Jamestown BOE Opts Out Of Tax Exemption
The Chautauqua County Industrial Development Agency will be in charge of negotiating PILOT agreements with wind farm developers in the Jamestown Public Schools District.
At Tuesday's Board of Education meeting at Jefferson Middle School, school officials decided to opt out of Section 487 of the Real Property Tax Law after hearing from Bill Daly and Rich Dixon of the Chautauqua County Industrial Development Agency. The law makes the installation of energy improvement systems - solar power, windmills - exempt from taxes.
By opting out, the district is placing the IDA in charge of negotiations regarding alternative energy should a company wants to develop wind energy in the county, Daly said. The IDA will be responsible for negotiating tax agreements for the county, city, towns and school districts.
According to Dale Weatherlow, Jamestown assistant superintendent, the district is now forcing a renewable energy marketer or developer to have to come to an agreement with the IDA that each municipality agrees with. It will also stop developers from working on separate deals with separate taxing entities.
''It just puts us all in the same playing field,'' Weatherlow said.
Daly said the IDA has already gained approval from the county for the exemption, and the agency is asking school districts to do the same.
''Now school systems across New York state are also doing the same thing,'' he said.
Daly said there are several areas in the state which have built windmills, adding the closest one to Chautauqua County is Wyoming County.
''One of the things that came across our radar screen ... was the concept of the big (energy companies) coming to Chautauqua County,'' he said. ''Wyoming County, virtually every inch of that county has exceptional wind.''
The idea of wind energy is sweeping the county, Daly said, adding several towns, including Hanover, Arkwright, Westfield and Ripley, are exploring the possibility of developing wind farms.
''Literally in this county ... there are hundreds of thousands of acres leased for wind turbines,'' he said.
Board members had originally tabled the resolution at a past board meeting. On Tuesday, the resolution passed with all board members voting ''yes.''
At Tuesday's Board of Education meeting at Jefferson Middle School, school officials decided to opt out of Section 487 of the Real Property Tax Law after hearing from Bill Daly and Rich Dixon of the Chautauqua County Industrial Development Agency. The law makes the installation of energy improvement systems - solar power, windmills - exempt from taxes.
By opting out, the district is placing the IDA in charge of negotiations regarding alternative energy should a company wants to develop wind energy in the county, Daly said. The IDA will be responsible for negotiating tax agreements for the county, city, towns and school districts.
According to Dale Weatherlow, Jamestown assistant superintendent, the district is now forcing a renewable energy marketer or developer to have to come to an agreement with the IDA that each municipality agrees with. It will also stop developers from working on separate deals with separate taxing entities.
''It just puts us all in the same playing field,'' Weatherlow said.
Daly said the IDA has already gained approval from the county for the exemption, and the agency is asking school districts to do the same.
''Now school systems across New York state are also doing the same thing,'' he said.
Daly said there are several areas in the state which have built windmills, adding the closest one to Chautauqua County is Wyoming County.
''One of the things that came across our radar screen ... was the concept of the big (energy companies) coming to Chautauqua County,'' he said. ''Wyoming County, virtually every inch of that county has exceptional wind.''
The idea of wind energy is sweeping the county, Daly said, adding several towns, including Hanover, Arkwright, Westfield and Ripley, are exploring the possibility of developing wind farms.
''Literally in this county ... there are hundreds of thousands of acres leased for wind turbines,'' he said.
Board members had originally tabled the resolution at a past board meeting. On Tuesday, the resolution passed with all board members voting ''yes.''
Cultural Of Political Corruption - Response to the Wayne Hurt Hornell Tribune August 26, 2008 Editorial
Cohocton Town Board member, Wayne Hunt, must be off his medicines. In a groundless attack on the character of Eric Massa, Hunt demonstrates once again, that a political hack ignores truth, when desperation engulfs partisan patronage. If Randy Kuhl relies on the diatribes of an unstable toady, to defend him – just what does that say about the Congressman?
Make no mistake about it, the editorial is a classic product of spinning sleaze to smear an opponent that is surging in the polls. The sad record of Cohocton government is indefensible. Mr. Hunt is a core architect of the collusion that has precipitated the NYS Attorney General criminal investigation. Such probes are serious matters that usually end in indictments. It is especially tragic when “so called” public officials sell their votes and influence.
The self-proclaimed leader of the band for Industrial Wind “Special Interests” has refused to cooperate with the AG. When town board and appointed officials use public funds to pay attorneys to stonewall an investigation, of which they are a target, it raises the question - what do you have to hide?
Eric Massa is an independent, rational and balanced advocate for the interests of all the citizens of the Congressional 29th District. Kuhl’s refusal to debate mirrors Hunt’s fear of the Attorney General. This pattern of silence has been the Hunt policy of no public comments at town board meetings. Congressman Kuhl is this the kind of standard you condone? It seems that when the comrades in schemes to defraud the public get scared, they must cower behind a code of silence.
Congressman Kuhl has a responsibility to debate Eric Massa. The electorate deserves representation by honest and courageous officials. Cowards deserve public ridicule. Most towns have a village idiot. Cohocton has many, but Hunt proves that he ranks near the top.
James Hall
Cohocton, NY
Make no mistake about it, the editorial is a classic product of spinning sleaze to smear an opponent that is surging in the polls. The sad record of Cohocton government is indefensible. Mr. Hunt is a core architect of the collusion that has precipitated the NYS Attorney General criminal investigation. Such probes are serious matters that usually end in indictments. It is especially tragic when “so called” public officials sell their votes and influence.
The self-proclaimed leader of the band for Industrial Wind “Special Interests” has refused to cooperate with the AG. When town board and appointed officials use public funds to pay attorneys to stonewall an investigation, of which they are a target, it raises the question - what do you have to hide?
Eric Massa is an independent, rational and balanced advocate for the interests of all the citizens of the Congressional 29th District. Kuhl’s refusal to debate mirrors Hunt’s fear of the Attorney General. This pattern of silence has been the Hunt policy of no public comments at town board meetings. Congressman Kuhl is this the kind of standard you condone? It seems that when the comrades in schemes to defraud the public get scared, they must cower behind a code of silence.
Congressman Kuhl has a responsibility to debate Eric Massa. The electorate deserves representation by honest and courageous officials. Cowards deserve public ridicule. Most towns have a village idiot. Cohocton has many, but Hunt proves that he ranks near the top.
James Hall
Cohocton, NY
The real Eric Massa by Wayne Hunt
As we get closer to crunch time in the 2008 election campaign, we begin to get a clearer picture of the various candidates’ character. In particular, Eric Massa comes to mind.
Eric presents a televised spinetingling image of long and meritorious naval service to our country. It stirs the patriotic sense in all of us who love our country. It may even lead us to think we should vote for him in the up-coming Congressional election.
In reality, Eric is a shore-leave brawler. I know this because I have personally been subjected to his tactics. I serve on the town board in Cohocton.
Eric is opposed to wind power in Steuben County and the Finger Lakes. He has expounded upon this at great length on a two-hour talk show that he conducts on radio stationWKPQ @ 105.5 FM in Hornell. The show airs from 10 a.m. until noon on Sunday mornings.
On 10-21-07 Eric had a guest on his program who accused Cohocton town board members, and particularly the town supervisor, of accepting payments in return for support for our wind project.
Eric not only allowed his guest to make the accusation, he repeated it several times during that program. He, or anyone from his staff, never contacted anyone in our town to verify if this could be true.
You may also remember that he publicly criticized Congressman Kuhl for joining a Congressional delegation that went to Brazil to study alternate fuel production. A Democratic congressman headed the delegation. It turns out that Eric, or any of his staff, never contacted his own party delegation before he attacked the trip.
All this was brought to mind as I watched Eric confront Congressman Kuhl on Channel 13 news in a pre-planned attempt at a “media event” at the airport. The congressman did not wish to participate in a confrontation. Eric got right in the congressman’s face and refused to listen to him. Finally, the congressman had to step around Mr. Massa and declare that the confrontation was over.
You and I, as discerning voters, must decide whether we want to let a bull into our china shop. If it is possible, I am determined to prevent that.
Wayne R. Hunt
Cohocton
TheRealEricMassaHornellTribune.pdf
Eric presents a televised spinetingling image of long and meritorious naval service to our country. It stirs the patriotic sense in all of us who love our country. It may even lead us to think we should vote for him in the up-coming Congressional election.
In reality, Eric is a shore-leave brawler. I know this because I have personally been subjected to his tactics. I serve on the town board in Cohocton.
Eric is opposed to wind power in Steuben County and the Finger Lakes. He has expounded upon this at great length on a two-hour talk show that he conducts on radio stationWKPQ @ 105.5 FM in Hornell. The show airs from 10 a.m. until noon on Sunday mornings.
On 10-21-07 Eric had a guest on his program who accused Cohocton town board members, and particularly the town supervisor, of accepting payments in return for support for our wind project.
Eric not only allowed his guest to make the accusation, he repeated it several times during that program. He, or anyone from his staff, never contacted anyone in our town to verify if this could be true.
You may also remember that he publicly criticized Congressman Kuhl for joining a Congressional delegation that went to Brazil to study alternate fuel production. A Democratic congressman headed the delegation. It turns out that Eric, or any of his staff, never contacted his own party delegation before he attacked the trip.
All this was brought to mind as I watched Eric confront Congressman Kuhl on Channel 13 news in a pre-planned attempt at a “media event” at the airport. The congressman did not wish to participate in a confrontation. Eric got right in the congressman’s face and refused to listen to him. Finally, the congressman had to step around Mr. Massa and declare that the confrontation was over.
You and I, as discerning voters, must decide whether we want to let a bull into our china shop. If it is possible, I am determined to prevent that.
Wayne R. Hunt
Cohocton
TheRealEricMassaHornellTribune.pdf
Public Service Commission Vote on Iberdrola - Energy East - September 3, 2008
STATE OF NEW YORK
Public Service Commission
Garry A. Brown, Chairman
Three Empire State Plaza, Albany, NY 12223
Further Details: James Denn, (518) 474-7080
http://www.dps.state.ny.us
FOR RELEASE: IMMEDIATELY 08092
COMMISSION TO MEET ON WEDNESDAY, SEPTEMBER 3, 2008
Albany, NY – 08/27/08 – The Public Service Commission has scheduled a special session beginning at 10:30 a.m., Wednesday, September 3, 2008, in the 19th Floor Board Room of its offices located at Three Empire State Plaza, Albany, New York. To be discussed:
Case 07-M-0906 - IBERDROLA, S.A., ENERGY EAST CORPORATION, et al. – Joint Petition for Approval of the Acquisition of Energy East Corporation by Iberdrola, S.A.
The Commission’s regular deliberative session will take place on Wednesday, September 17, at 10:30 a.m. in Albany.
Individuals in Albany wishing to observe the Commission’s meeting may do so in the Board Room on the 19th floor of the Commission’s offices at Three Empire State Plaza.
Pursuant to procedures established by the building management, anyone planning to view the meeting in the New York City Board Room must notify Jan Goorsky at 212-417-2378, 48 hours in advance of the meeting, and must be prepared to show valid photo identification upon arrival at 90 Church Street. The videocasting will be for viewing and listening purposes only. In addition, the meeting will be broadcast live on the Internet. The Internet broadcast can be viewed through NewYorkAdmin by accessing http://www.NewYorkAdmin.com from a computer capable of using RealPlayer. RealPlayer can be downloaded from the NewYorkAdmin site. The Commission has no financial interest in the Web site, its management, maintenance or administration.
Persons with disabilities who require a sign language interpreter or other special accommodations should call the Department of Public Service's Human Resources Management office at (518) 474-2520. TDD users may call this number through the New York Relay Service at 1-800-662-1220 or have a representative call directly to the office.
Public Service Commission
Garry A. Brown, Chairman
Three Empire State Plaza, Albany, NY 12223
Further Details: James Denn, (518) 474-7080
http://www.dps.state.ny.us
FOR RELEASE: IMMEDIATELY 08092
COMMISSION TO MEET ON WEDNESDAY, SEPTEMBER 3, 2008
Albany, NY – 08/27/08 – The Public Service Commission has scheduled a special session beginning at 10:30 a.m., Wednesday, September 3, 2008, in the 19th Floor Board Room of its offices located at Three Empire State Plaza, Albany, New York. To be discussed:
Case 07-M-0906 - IBERDROLA, S.A., ENERGY EAST CORPORATION, et al. – Joint Petition for Approval of the Acquisition of Energy East Corporation by Iberdrola, S.A.
The Commission’s regular deliberative session will take place on Wednesday, September 17, at 10:30 a.m. in Albany.
Individuals in Albany wishing to observe the Commission’s meeting may do so in the Board Room on the 19th floor of the Commission’s offices at Three Empire State Plaza.
Pursuant to procedures established by the building management, anyone planning to view the meeting in the New York City Board Room must notify Jan Goorsky at 212-417-2378, 48 hours in advance of the meeting, and must be prepared to show valid photo identification upon arrival at 90 Church Street. The videocasting will be for viewing and listening purposes only. In addition, the meeting will be broadcast live on the Internet. The Internet broadcast can be viewed through NewYorkAdmin by accessing http://www.NewYorkAdmin.com from a computer capable of using RealPlayer. RealPlayer can be downloaded from the NewYorkAdmin site. The Commission has no financial interest in the Web site, its management, maintenance or administration.
Persons with disabilities who require a sign language interpreter or other special accommodations should call the Department of Public Service's Human Resources Management office at (518) 474-2520. TDD users may call this number through the New York Relay Service at 1-800-662-1220 or have a representative call directly to the office.
PSC Commissioner Buley resigns
ALBANY, N.Y. - A state Public Service Commission member who was embroiled in several political skirmishes during her two-year tenure says she's resigning next month to get married and move to Kentucky.
Commissioner Cheryl Buley was appointed to the $109,800-a-year position on the PSC by former Republican Gov. George Pataki in June 2006 for a term ending in February 2012.
Her resignation is effective Sept. 3, the day the PSC is to vote on Iberdrola SA's $4.6 billion proposal to buy Energy East. The commission had planned to consider staff recommendations for various conditions on the deal on Wednesday but postponed action because Buley and another of the five commissioners were absent for personal reasons.
Buley told the Times Union of Albany her resignation had nothing to do with the case.
After a series of blackouts in the New York City area in the summer of 2006, Democrats questioned the qualifications of Buley, a former public relations executive then married to a GOP lobbyist who donated thousands of dollars to Republicans.
Buley later accused Democratic Gov. Eliot Spitzer's energy adviser, Steven Mitnick, of threatening her career.
The PSC sets rates and provides oversight over New York's utilities.
Commissioner Cheryl Buley was appointed to the $109,800-a-year position on the PSC by former Republican Gov. George Pataki in June 2006 for a term ending in February 2012.
Her resignation is effective Sept. 3, the day the PSC is to vote on Iberdrola SA's $4.6 billion proposal to buy Energy East. The commission had planned to consider staff recommendations for various conditions on the deal on Wednesday but postponed action because Buley and another of the five commissioners were absent for personal reasons.
Buley told the Times Union of Albany her resignation had nothing to do with the case.
After a series of blackouts in the New York City area in the summer of 2006, Democrats questioned the qualifications of Buley, a former public relations executive then married to a GOP lobbyist who donated thousands of dollars to Republicans.
Buley later accused Democratic Gov. Eliot Spitzer's energy adviser, Steven Mitnick, of threatening her career.
The PSC sets rates and provides oversight over New York's utilities.
Vote on sale of Rochester Gas and Electric's parent company to Iberdrola postponed
ALBANY — The fate of the potential sale of Rochester Gas and Electric's parent to a Spanish company was thrown into doubt Wednesday by the illness of one state regulator and the marriage plans of another.
A long-awaited vote by the state Public Service Commission on whether to allow the $4.5 billion sale of Energy East Corp. to Iberdrola SA of Spain was put off because only three of the five commissioners were present at a special meeting.
Commissioners Cheryl Buley and Robert E. Curry Jr., who make $109,800 a year each, were absent. The vote was rescheduled for next Wednesday.
Curry was ill, and the commission later announced that Buley plans to resign next week because she is getting married and moving out of state, leaving the four remaining commissioners to decide the case.
Buley's resignation would seem to make approval more difficult, since three votes are still needed for the sale to proceed. PSC members are appointed by the governor and confirmed by the state Senate.
The state has been weighing for months whether Iberdrola should be allowed to buy Energy East, which owns New York State Electric and Gas as well as RG&E. Federal regulators and regulators in three New England states have approved the deal, leaving the New York PSC as the last remaining hurdle.
Between them, RG&E and NYSEG serve 16 percent of the state's electric customers and 12 percent of natural gas users and have about 1.2 million electric and 562,000 natural gas customers.
"We are not comfortable acting without the other commissioners," PSC Chairman Garry Brown said in announcing the delayed vote.
Buley's resignation gives Gov. David Paterson a chance to expand his influence on the panel. With the exception of Brown, all of the other commission members were appointed by former Gov. George Pataki, a Republican. Brown was appointed last year by then-Gov. Eliot Spitzer, a Democrat like Paterson.
Buley's term has almost four years to run.
"My departure is with mixed emotions, but the reason is very joyful," she said in a statement. "I have accepted a proposal of marriage, and I am relocating outside of the state."
Supporters of the deal have emphasized Iberdrola's position as one of the world's largest generators of wind energy and its plan to invest as much as $2 billion in new wind power facilities in the state. The state has committed to generating 25 percent of its electricity from renewable sources such as wind and hydropower by 2013.
Opponents have voiced concerns about Iberdrola having too much power to influence prices since it would own both generating and distribution facilities, something the PSC generally prohibits as anti-competitive.
One of the three commissioners at Wednesday's meeting, Maureen Harris, signaled she might vote no. She said she had concerns about potential market power for Iberdrola that "cannot be addressed," and thought the commission should stay consistent in its policy of discouraging utilities from owning both generation and transmission facilities.
"All we've been talking about is all the risks" of the deal, Harris said.
At an Aug. 20 meeting, Curry raised concerns about possible big payouts for Energy East executives — totaling at least $100 million — if the deal goes through.
There was no comment from an Energy East spokeswoman on the payout issue. An Iberdrola spokesman said the company didn't factor executive payouts into the purchase price.
A long-awaited vote by the state Public Service Commission on whether to allow the $4.5 billion sale of Energy East Corp. to Iberdrola SA of Spain was put off because only three of the five commissioners were present at a special meeting.
Commissioners Cheryl Buley and Robert E. Curry Jr., who make $109,800 a year each, were absent. The vote was rescheduled for next Wednesday.
Curry was ill, and the commission later announced that Buley plans to resign next week because she is getting married and moving out of state, leaving the four remaining commissioners to decide the case.
Buley's resignation would seem to make approval more difficult, since three votes are still needed for the sale to proceed. PSC members are appointed by the governor and confirmed by the state Senate.
The state has been weighing for months whether Iberdrola should be allowed to buy Energy East, which owns New York State Electric and Gas as well as RG&E. Federal regulators and regulators in three New England states have approved the deal, leaving the New York PSC as the last remaining hurdle.
Between them, RG&E and NYSEG serve 16 percent of the state's electric customers and 12 percent of natural gas users and have about 1.2 million electric and 562,000 natural gas customers.
"We are not comfortable acting without the other commissioners," PSC Chairman Garry Brown said in announcing the delayed vote.
Buley's resignation gives Gov. David Paterson a chance to expand his influence on the panel. With the exception of Brown, all of the other commission members were appointed by former Gov. George Pataki, a Republican. Brown was appointed last year by then-Gov. Eliot Spitzer, a Democrat like Paterson.
Buley's term has almost four years to run.
"My departure is with mixed emotions, but the reason is very joyful," she said in a statement. "I have accepted a proposal of marriage, and I am relocating outside of the state."
Supporters of the deal have emphasized Iberdrola's position as one of the world's largest generators of wind energy and its plan to invest as much as $2 billion in new wind power facilities in the state. The state has committed to generating 25 percent of its electricity from renewable sources such as wind and hydropower by 2013.
Opponents have voiced concerns about Iberdrola having too much power to influence prices since it would own both generating and distribution facilities, something the PSC generally prohibits as anti-competitive.
One of the three commissioners at Wednesday's meeting, Maureen Harris, signaled she might vote no. She said she had concerns about potential market power for Iberdrola that "cannot be addressed," and thought the commission should stay consistent in its policy of discouraging utilities from owning both generation and transmission facilities.
"All we've been talking about is all the risks" of the deal, Harris said.
At an Aug. 20 meeting, Curry raised concerns about possible big payouts for Energy East executives — totaling at least $100 million — if the deal goes through.
There was no comment from an Energy East spokeswoman on the payout issue. An Iberdrola spokesman said the company didn't factor executive payouts into the purchase price.
A form of eminent domain is happening here
The dictionary defines eminent domain as the inherent power of the state to seize a citizen's private property without the owner's consent.
The recent U.S. Supreme Court's liberal and controversial decision gave the right: "In simple terms that the government can take privately owned land, as long as the land will be used by the public and the owner is paid a fair price for the land, what the amendment calls just."
"Used by the public" being the key phrase.
A form of eminent domain is happening here in New York state with the placement of industrial wind turbines. The town of Prattsburg, N.Y., is one example. The town has voted to condemn private property to aid a wind company in building a local wind farm.
There has also been talk of taking private land in Henderson for power lines to service a wind project on Galloo Island.
In Jefferson County, wind projects are being planned for the towns of Cape Vincent, Clayton, Orleans, Lyme, Brownville and others. Placing a few hundred huge wind turbines throughout these towns is a foreign wind company's form of eminent domain. These industrial generators will dominate the land around them which, if not properly placed, will also include private property of many nonparticipants in the wind project.
Wind turbine noise can reach out hundreds of yards from the generator, invading the private property and thus taking away that person's use of their own land.
The town of Lyme had acted responsibly in the spring when it passed a wind law with setbacks that would protect private property from noise levels produced by turning generators and blades. It also would protect the only natural resource Lyme has, Lake Ontario, and its bays and shoreline, that for decades have been enjoyed by many boaters and fishermen.
Last week one judge struck down this wind law. So, for a few large landowners with promises of big money from foreign wind companies, the diligent efforts of the planning board, town board and the survey of the residents of Lyme are set aside. This "voter for wind" group has not been happy with their part of the pie; they wanted it all from the start. Lyme's wind law provided land use for wind turbines while still respecting the properties of the hundreds of other residents who live here.
Anyone who lives and owns rural property in Jefferson County had better wake up and be aware of your local and state governments. They are very willing to take your private property in this form of eminent domain and give it to a foreign wind company.
We all need to protect our property and our own American Dream.
Stephen Rutigliano
Three Mile Bay
The recent U.S. Supreme Court's liberal and controversial decision gave the right: "In simple terms that the government can take privately owned land, as long as the land will be used by the public and the owner is paid a fair price for the land, what the amendment calls just."
"Used by the public" being the key phrase.
A form of eminent domain is happening here in New York state with the placement of industrial wind turbines. The town of Prattsburg, N.Y., is one example. The town has voted to condemn private property to aid a wind company in building a local wind farm.
There has also been talk of taking private land in Henderson for power lines to service a wind project on Galloo Island.
In Jefferson County, wind projects are being planned for the towns of Cape Vincent, Clayton, Orleans, Lyme, Brownville and others. Placing a few hundred huge wind turbines throughout these towns is a foreign wind company's form of eminent domain. These industrial generators will dominate the land around them which, if not properly placed, will also include private property of many nonparticipants in the wind project.
Wind turbine noise can reach out hundreds of yards from the generator, invading the private property and thus taking away that person's use of their own land.
The town of Lyme had acted responsibly in the spring when it passed a wind law with setbacks that would protect private property from noise levels produced by turning generators and blades. It also would protect the only natural resource Lyme has, Lake Ontario, and its bays and shoreline, that for decades have been enjoyed by many boaters and fishermen.
Last week one judge struck down this wind law. So, for a few large landowners with promises of big money from foreign wind companies, the diligent efforts of the planning board, town board and the survey of the residents of Lyme are set aside. This "voter for wind" group has not been happy with their part of the pie; they wanted it all from the start. Lyme's wind law provided land use for wind turbines while still respecting the properties of the hundreds of other residents who live here.
Anyone who lives and owns rural property in Jefferson County had better wake up and be aware of your local and state governments. They are very willing to take your private property in this form of eminent domain and give it to a foreign wind company.
We all need to protect our property and our own American Dream.
Stephen Rutigliano
Three Mile Bay
Wednesday, August 27, 2008
Decision expected on Iberdrola deal
Iberdrola already runs a wind farm in Lewis County, east of Lake Ontario, and the company has proposed 10 additional wind farms throughout upstate, including three Rochester-area facilities that could generate 258 megawatts of electricity, potentially powering more than 70,000 homes yearly.
But if Iberdrola is also allowed to own RG&E and NYSEG, the company will control the distribution of electricity as well as its generation -- a dual role that the Public Service Commission has opposed for more than 10 years on the principle that such "vertical integration" is anti-competitive.
Iberdrola has said it will walk away from the Energy East deal if forced to give up ownership of the wind farms, which it claims are not competitive generators because of the variable nature of wind power.
That variable nature also means Iberdrola could not control market prices, the company argued. Yet the idea of price manipulation by wind farms is not far-fetched to some.
"Once you have the energy and transmission, there are any number of clever things you can do," said Robert McCullough, managing partner of McCullough Research of Portland, Ore. "The (PSC) staff is entirely correct."
One tactic is to withhold power when demand is high, driving up the price. But how is the price set?
Forty-five percent of electricity is sold on the day-ahead market and 5 percent is sold on the separate real-time, or instant, market, according to spokesman Kenneth Klapp of the New York Independent System Operator, the state grid's operator. (The other 50 percent is based on contractual agreements.)
For the 50 percent of energy that's subject to market fluctuations, the Independent System Operator uses an industry standard known as the uniform clearing price system. Basically, the price goes up based on demand. When demand is satisfied, higher bids fail.
But final prices tend to reflect the last, highest bid, and Iberdrola would have motive to keep prices high through tactics such as withholding power, critics have told the PSC staff.
Iberdrola countered that wind farms aren't known to set going-rate electricity prices anywhere in the world. Sellers take what they can get, according to Pedro Azagra, Iberdrola director of corporate development. The only reason U.S. wind farms make money is usually because of subsidies from the state, according to Azagra.
The other major concern is that Iberdrola could interfere with generation plants and wind turbine companies seeking to connect to the grid in RG&E and NYSEG territory.
Iberdrola said there are substantial penalties, including fines and forfeiture of profits, to deter such illegal behavior.
But McCullough, who testified to the U.S. Senate about corrupt energy titan Enron Corp., said market surveillance by the state grid operator and U.S. Federal Energy Regulatory Commission is likely to be spotty and cannot prevent all abuses.
(Click to read entire article)
But if Iberdrola is also allowed to own RG&E and NYSEG, the company will control the distribution of electricity as well as its generation -- a dual role that the Public Service Commission has opposed for more than 10 years on the principle that such "vertical integration" is anti-competitive.
Iberdrola has said it will walk away from the Energy East deal if forced to give up ownership of the wind farms, which it claims are not competitive generators because of the variable nature of wind power.
That variable nature also means Iberdrola could not control market prices, the company argued. Yet the idea of price manipulation by wind farms is not far-fetched to some.
"Once you have the energy and transmission, there are any number of clever things you can do," said Robert McCullough, managing partner of McCullough Research of Portland, Ore. "The (PSC) staff is entirely correct."
One tactic is to withhold power when demand is high, driving up the price. But how is the price set?
Forty-five percent of electricity is sold on the day-ahead market and 5 percent is sold on the separate real-time, or instant, market, according to spokesman Kenneth Klapp of the New York Independent System Operator, the state grid's operator. (The other 50 percent is based on contractual agreements.)
For the 50 percent of energy that's subject to market fluctuations, the Independent System Operator uses an industry standard known as the uniform clearing price system. Basically, the price goes up based on demand. When demand is satisfied, higher bids fail.
But final prices tend to reflect the last, highest bid, and Iberdrola would have motive to keep prices high through tactics such as withholding power, critics have told the PSC staff.
Iberdrola countered that wind farms aren't known to set going-rate electricity prices anywhere in the world. Sellers take what they can get, according to Pedro Azagra, Iberdrola director of corporate development. The only reason U.S. wind farms make money is usually because of subsidies from the state, according to Azagra.
The other major concern is that Iberdrola could interfere with generation plants and wind turbine companies seeking to connect to the grid in RG&E and NYSEG territory.
Iberdrola said there are substantial penalties, including fines and forfeiture of profits, to deter such illegal behavior.
But McCullough, who testified to the U.S. Senate about corrupt energy titan Enron Corp., said market surveillance by the state grid operator and U.S. Federal Energy Regulatory Commission is likely to be spotty and cannot prevent all abuses.
(Click to read entire article)
Spain's Iberdrola share trade suspended-bourse
MADRID, Aug 27 (Reuters) - Trading in the shares of Iberdrola (IBE.MC: Quote, Profile, Research, Stock Buzz) were suspended Wednesday, the bourse regulator CNMV said.
The New York regulator had been due to rule later on Wednesday on the Spanish energy group's buy of Energy East.
But the New York Public Service Commission Chair said it will not make a final decision on the deal today.
Iberdrola shares last changed hands at 8.20 euros each, up 0.74 percent.
The New York regulator had been due to rule later on Wednesday on the Spanish energy group's buy of Energy East.
But the New York Public Service Commission Chair said it will not make a final decision on the deal today.
Iberdrola shares last changed hands at 8.20 euros each, up 0.74 percent.
Iberdrola vote postponed by PSC chairman
Iberdrola's takeover of RG&E and its parent company is still on hold. The state public service commission met this morning. Two of the five commissioners couldn't attend and the chairman postponed a final decision.
Energy East Corporation, which owns RG&E and NYSEG, has agreed to be taken over by the Spanish energy giant but the PSC staff has recommended the deal be rejected saying it's not in the best interest of customers.
Business leaders and people like Senator Chuck Schumer support the takeover. Chairman of the PSC says a final decision could be made at the next meeting September 3.
Energy East Corporation, which owns RG&E and NYSEG, has agreed to be taken over by the Spanish energy giant but the PSC staff has recommended the deal be rejected saying it's not in the best interest of customers.
Business leaders and people like Senator Chuck Schumer support the takeover. Chairman of the PSC says a final decision could be made at the next meeting September 3.
PSC's vote on Iberdrola-Energy East deal is delayed
ALBANY -- The absence of two of five state Public Service Commission members from a special meeting today prompted a delay in a decision about whether to allow Iberdrola SA to buy Energy East Corp., the parent of Rochester Gas and Electric and New York State Electric and Gas.
The PSC had been scheduled to vote today on the $4.5 billion deal, but commissioners Cheryl Buley and Robert Curry were absent. Discussion of the deal was proceeding, but no vote will be taken until at least next week.
Curry was ill and Buley missed the meeting for personal reasons, said commission spokesman James Denn, who said he had no other information on her absence.
The five commissioners are paid $109,800 a year.
The Iberdrola-Energy East deal was announced by the Spanish and U.S. companies in June 2007. Utility regulators at the federal level and in three New England states where Energy East does business have approved the sale, leaving New York as the only jurisdiction that hasn't acted.
On Aug. 8, the PSC announced that the commissioners would begin discussing issues related to the takeover at their regular meeting on Aug. 20, and then would hold a special meeting today.
In anticipation of a vote today, Bilbao, Spain-based Iberdrola issued a press release and the stock market in Madrid halted trading in Iberdrola's stock just as the PSC meeting was beginning.
"We are not comfortable acting without the other commissioners,'' PSC Chairman Garry Brown said. He said he wants the panel to meet next week, but it was unclear whether Buley and Curry would be available then.
Between them, RG&E and NYSEG serve 16 percent of the state's electric customers and 12 percent of natural gas users and have about 1.2 million electric and 562,000 natural gas customers.
Supporters of the deal have emphasized Iberdrola's position as one of the world's largest generators of wind energy and its plan to invest as much as $2 billion in new wind power facilities in the state. Opponents have voiced concerns about the company having too much power to influence prices since it would own both generating and distribution facilities -- something the commission generally prohibits.
The PSC had been scheduled to vote today on the $4.5 billion deal, but commissioners Cheryl Buley and Robert Curry were absent. Discussion of the deal was proceeding, but no vote will be taken until at least next week.
Curry was ill and Buley missed the meeting for personal reasons, said commission spokesman James Denn, who said he had no other information on her absence.
The five commissioners are paid $109,800 a year.
The Iberdrola-Energy East deal was announced by the Spanish and U.S. companies in June 2007. Utility regulators at the federal level and in three New England states where Energy East does business have approved the sale, leaving New York as the only jurisdiction that hasn't acted.
On Aug. 8, the PSC announced that the commissioners would begin discussing issues related to the takeover at their regular meeting on Aug. 20, and then would hold a special meeting today.
In anticipation of a vote today, Bilbao, Spain-based Iberdrola issued a press release and the stock market in Madrid halted trading in Iberdrola's stock just as the PSC meeting was beginning.
"We are not comfortable acting without the other commissioners,'' PSC Chairman Garry Brown said. He said he wants the panel to meet next week, but it was unclear whether Buley and Curry would be available then.
Between them, RG&E and NYSEG serve 16 percent of the state's electric customers and 12 percent of natural gas users and have about 1.2 million electric and 562,000 natural gas customers.
Supporters of the deal have emphasized Iberdrola's position as one of the world's largest generators of wind energy and its plan to invest as much as $2 billion in new wind power facilities in the state. Opponents have voiced concerns about the company having too much power to influence prices since it would own both generating and distribution facilities -- something the commission generally prohibits.
PSC vote on Iberdrola-Energy East merger delayed
Colleague Larry Rulison reports this surprising development from this morning’s state Public Service Commission meeting:
Two commissioners were absent from the special session at which a vote was expected on Iberdrola S.A.’s $4.5 billion acquisition of Energy East Corp.
“We will not be making a final determination today,” PSC Chairman Garry Brown said.
Instead, Sept. 3 has been set as a tentative date for the vote, said agency spokesman James Denn.
No reason was given for the absence of commissioners Robert Curry and Cheryl Buley.
Discussion of the merger was scheduled to proceed, however. “Today we will go through the final discussions,” Brown said.
Rulison reported a capacity crowd at the session, held in Albany. He said those attending appeared shocked by the development; Iberdrola representatives looked frustrated.
Iberdrola, the world’s largest wind farm developer, proposed the Energy East acquisition last year. Maine-based Energy East operates two New York utilities, Rochester Gas & Electric and New York State Electric & Gas. NYSEG serves 1.3 million customers in upstate New York, including parts of the Capital Region and the North Country.
Iberdrola is a 50 percent owner in the 321-megawatt Maple Ridge Wind Farm in Lewis County, New York’s largest, and also is developing 10 other projects around the state worth a combined $2 billion.
It is that ownership of electricity production capacity that has dominated discussions on the merger, since New York deregulated its electric market a decade ago to separate production and transmission in an effort to encourage competition and lower utility rates.
Two commissioners were absent from the special session at which a vote was expected on Iberdrola S.A.’s $4.5 billion acquisition of Energy East Corp.
“We will not be making a final determination today,” PSC Chairman Garry Brown said.
Instead, Sept. 3 has been set as a tentative date for the vote, said agency spokesman James Denn.
No reason was given for the absence of commissioners Robert Curry and Cheryl Buley.
Discussion of the merger was scheduled to proceed, however. “Today we will go through the final discussions,” Brown said.
Rulison reported a capacity crowd at the session, held in Albany. He said those attending appeared shocked by the development; Iberdrola representatives looked frustrated.
Iberdrola, the world’s largest wind farm developer, proposed the Energy East acquisition last year. Maine-based Energy East operates two New York utilities, Rochester Gas & Electric and New York State Electric & Gas. NYSEG serves 1.3 million customers in upstate New York, including parts of the Capital Region and the North Country.
Iberdrola is a 50 percent owner in the 321-megawatt Maple Ridge Wind Farm in Lewis County, New York’s largest, and also is developing 10 other projects around the state worth a combined $2 billion.
It is that ownership of electricity production capacity that has dominated discussions on the merger, since New York deregulated its electric market a decade ago to separate production and transmission in an effort to encourage competition and lower utility rates.
B&B unit in trading halt
Shares in Babcock & Brown Communities, the listed retirement home fund controlled by Babcock & Brown, went into a trading halt this morning ahead of an announcement about its strategic review.
"BBC is requesting a trading halt as the BBC Board is finalising its response to the previously announced strategic review," the company said in its release to the Australian Securities Exchange.
"The BBC board expects various agreements to be concluded with Babcock & Brown and, upon finalisation of its strategic review, BBC will announce the terms of the agreements in relations to its preferred options."
The company said in June that it had hired an independent adviser to look at ways to increase the share price at the company, which has lost 63% of its value since the beginning of the year.
Babcock & Brown Communities' gearing ratio of 32% is less than half of beleaguered parent Babcock & Brown's, which is almost has nearly the three dollars of debt for every four dollars of assets.
Shares in Babcock & Brown Communities closed down 1.4% yesterday, or half a cent, to 34.5 cents yesterday.
Changes at Babcock & Brown Communities, which runs 56 retirement villages and 29 aged-care homes in Australia and New Zealand, come amid a broader restructuring unveiled by the parent company last week.
Babcock & Brown plans to move away from the structured finance business that has run up debts at Babcock's family of listed infrastructure funds and created a crisis of confidence among investors.
Concerns about Babcock & Brown's viability ultimately claimed chief executive Phil Green last week.
Mr Green was replaced by chief financial officer Michael Larkin, who is overseeing Babcock & Brown return to its core businesses of leasing, real estate and infrastructure.
Babcock & Brown's shares fell as low as 3%, or 8 cents, to $2.53 in early trade. The company's stock is down 90% for the year according to data from Bloomberg.
Shares in Babcock & Brown Communities will remain in a halt until Friday morning or until the expected announcement.
"BBC is requesting a trading halt as the BBC Board is finalising its response to the previously announced strategic review," the company said in its release to the Australian Securities Exchange.
"The BBC board expects various agreements to be concluded with Babcock & Brown and, upon finalisation of its strategic review, BBC will announce the terms of the agreements in relations to its preferred options."
The company said in June that it had hired an independent adviser to look at ways to increase the share price at the company, which has lost 63% of its value since the beginning of the year.
Babcock & Brown Communities' gearing ratio of 32% is less than half of beleaguered parent Babcock & Brown's, which is almost has nearly the three dollars of debt for every four dollars of assets.
Shares in Babcock & Brown Communities closed down 1.4% yesterday, or half a cent, to 34.5 cents yesterday.
Changes at Babcock & Brown Communities, which runs 56 retirement villages and 29 aged-care homes in Australia and New Zealand, come amid a broader restructuring unveiled by the parent company last week.
Babcock & Brown plans to move away from the structured finance business that has run up debts at Babcock's family of listed infrastructure funds and created a crisis of confidence among investors.
Concerns about Babcock & Brown's viability ultimately claimed chief executive Phil Green last week.
Mr Green was replaced by chief financial officer Michael Larkin, who is overseeing Babcock & Brown return to its core businesses of leasing, real estate and infrastructure.
Babcock & Brown's shares fell as low as 3%, or 8 cents, to $2.53 in early trade. The company's stock is down 90% for the year according to data from Bloomberg.
Shares in Babcock & Brown Communities will remain in a halt until Friday morning or until the expected announcement.
PSC Will NOT vote on Iberdrola Energy East TODAY
Only three commissioners attending the "Special Meeting" today. Vote on the Iberdrola Energy East acquisition will be pushed back to September 2008 meeting.
Commissioner Patricia L. Acampora acknowledged the numerous correspondences from the public and the concern that the PSC is doing a 180 reversal on vertical integration.
Commissioner Maureen F. Harris is expressing her deep concern that Iberdrola will be in a position to cause interconnect disadvantages to other developers.
Commissioner Patricia L. Acampora asked about the NYS Attorney General investigation of First Wind and Noble and if there are any links to Iberdrola.
Commissioner Patricia L. Acampora acknowledged the numerous correspondences from the public and the concern that the PSC is doing a 180 reversal on vertical integration.
Commissioner Maureen F. Harris is expressing her deep concern that Iberdrola will be in a position to cause interconnect disadvantages to other developers.
Commissioner Patricia L. Acampora asked about the NYS Attorney General investigation of First Wind and Noble and if there are any links to Iberdrola.
NYS PSC - Special Session - Iberdrola/Energy East LIVE Video
Watch the live video of the "Special Meeting" of the NYS Public Service Commission on the acquisition by Iberdrola of Energy East.
Commission vote expected today.
Links available to use Real Player and Windows Media Player.
Commission vote expected today.
Links available to use Real Player and Windows Media Player.
Wind Energy Bumps Into Power Grid’s Limits - NYT by MATTHEW L. WALD
When the builders of the Maple Ridge Wind farm spent $320 million to put nearly 200 wind turbines in upstate New York, the idea was to get paid for producing electricity. But at times, regional electric lines have been so congested that Maple Ridge has been forced to shut down even with a brisk wind blowing.
That is a symptom of a broad national problem. Expansive dreams about renewable energy, like Al Gore’s hope of replacing all fossil fuels in a decade, are bumping up against the reality of a power grid that cannot handle the new demands.
The dirty secret of clean energy is that while generating it is getting easier, moving it to market is not.
The grid today, according to experts, is a system conceived 100 years ago to let utilities prop each other up, reducing blackouts and sharing power in small regions. It resembles a network of streets, avenues and country roads.
“We need an interstate transmission superhighway system,” said Suedeen G. Kelly, a member of the Federal Energy Regulatory Commission.
While the United States today gets barely 1 percent of its electricity from wind turbines, many experts are starting to think that figure could hit 20 percent.
Achieving that would require moving large amounts of power over long distances, from the windy, lightly populated plains in the middle of the country to the coasts where many people live. Builders are also contemplating immense solar-power stations in the nation’s deserts that would pose the same transmission problems.
The grid’s limitations are putting a damper on such projects already. Gabriel Alonso, chief development officer of Horizon Wind Energy, the company that operates Maple Ridge, said that in parts of Wyoming, a turbine could make 50 percent more electricity than the identical model built in New York or Texas.
“The windiest sites have not been built, because there is no way to move that electricity from there to the load centers,” he said.
The basic problem is that many transmission lines, and the connections between them, are simply too small for the amount of power companies would like to squeeze through them. The difficulty is most acute for long-distance transmission, but shows up at times even over distances of a few hundred miles.
Transmission lines carrying power away from the Maple Ridge farm, near Lowville, N.Y., have sometimes become so congested that the company’s only choice is to shut down — or pay fees for the privilege of continuing to pump power into the lines.
Politicians in Washington have long known about the grid’s limitations but have made scant headway in solving them. They are reluctant to trample the prerogatives of state governments, which have traditionally exercised authority over the grid and have little incentive to push improvements that would benefit neighboring states.
In Texas, T. Boone Pickens, the oilman building the world’s largest wind farm, plans to tackle the grid problem by using a right of way he is developing for water pipelines for a 250-mile transmission line from the Panhandle to the Dallas market. He has testified in Congress that Texas policy is especially favorable for such a project and that other wind developers cannot be expected to match his efforts.
“If you want to do it on a national scale, where the transmission line distances will be much longer, and utility regulations are different, Congress must act,” he said on Capitol Hill.
Enthusiasm for wind energy is running at fever pitch these days, with bold plans on the drawing boards, like Mayor Michael Bloomberg’s notion of dotting New York City with turbines. Companies are even reviving ideas of storing wind-generated energy using compressed air or spinning flywheels.
Yet experts say that without a solution to the grid problem, effective use of wind power on a wide scale is likely to remain a dream.
The power grid is balkanized, with about 200,000 miles of power lines divided among 500 owners. Big transmission upgrades often involve multiple companies, many state governments and numerous permits. Every addition to the grid provokes fights with property owners.
These barriers mean that electrical generation is growing four times faster than transmission, according to federal figures.
In a 2005 energy law, Congress gave the Energy Department the authority to step in to approve transmission if states refused to act. The department designated two areas, one in the Middle Atlantic States and one in the Southwest, as national priorities where it might do so; 14 United States senators then signed a letter saying the department was being too aggressive.
Energy Department leaders say that, however understandable the local concerns, they are getting in the way. “Modernizing the electric infrastructure is an urgent national problem, and one we all share,” said Kevin M. Kolevar, assistant secretary for electricity delivery and energy reliability, in a speech last year.
Unlike answers to many of the nation’s energy problems, improvements to the grid would require no new technology. An Energy Department plan to source 20 percent of the nation’s electricity from wind calls for a high-voltage backbone spanning the country that would be similar to 2,100 miles of lines already operated by a company called American Electric Power.
The cost would be high, $60 billion or more, but in theory could be spread across many years and tens of millions of electrical customers. However, in most states, rules used by public service commissions to evaluate transmission investments discourage multistate projects of this sort. In some states with low electric rates, elected officials fear that new lines will simply export their cheap power and drive rates up.
Without a clear way of recovering the costs and earning a profit, and with little leadership on the issue from the federal government, no company or organization has offered to fight the political battles necessary to get such a transmission backbone built.
Texas and California have recently made some progress in building transmission lines for wind power, but nationally, the problem seems likely to get worse. Today, New York State has about 1,500 megawatts of wind capacity. A megawatt is an instantaneous measure of power. A large Wal-Mart draws about one megawatt. The state is planning for an additional 8,000 megawatts of capacity.
But those turbines will need to go in remote, windy areas that are far off the beaten path, electrically speaking, and it is not clear enough transmission capacity will be developed. Save for two underwater connections to Long Island, New York State has not built a major new power line in 20 years.
A handful of states like California that have set aggressive goals for renewable energy are being forced to deal with the issue, since the goals cannot be met without additional power lines.
But Bill Richardson, the governor of New Mexico and a former energy secretary under President Bill Clinton, contends that these piecemeal efforts are not enough to tap the nation’s potential for renewable energy.
Wind advocates say that just two of the windiest states, North Dakota and South Dakota, could in principle generate half the nation’s electricity from turbines. But the way the national grid is configured, half the country would have to move to the Dakotas in order to use the power.
“We still have a third-world grid,” Mr. Richardson said, repeating a comment he has made several times. “With the federal government not investing, not setting good regulatory mechanisms, and basically taking a back seat on everything except drilling and fossil fuels, the grid has not been modernized, especially for wind energy.”
That is a symptom of a broad national problem. Expansive dreams about renewable energy, like Al Gore’s hope of replacing all fossil fuels in a decade, are bumping up against the reality of a power grid that cannot handle the new demands.
The dirty secret of clean energy is that while generating it is getting easier, moving it to market is not.
The grid today, according to experts, is a system conceived 100 years ago to let utilities prop each other up, reducing blackouts and sharing power in small regions. It resembles a network of streets, avenues and country roads.
“We need an interstate transmission superhighway system,” said Suedeen G. Kelly, a member of the Federal Energy Regulatory Commission.
While the United States today gets barely 1 percent of its electricity from wind turbines, many experts are starting to think that figure could hit 20 percent.
Achieving that would require moving large amounts of power over long distances, from the windy, lightly populated plains in the middle of the country to the coasts where many people live. Builders are also contemplating immense solar-power stations in the nation’s deserts that would pose the same transmission problems.
The grid’s limitations are putting a damper on such projects already. Gabriel Alonso, chief development officer of Horizon Wind Energy, the company that operates Maple Ridge, said that in parts of Wyoming, a turbine could make 50 percent more electricity than the identical model built in New York or Texas.
“The windiest sites have not been built, because there is no way to move that electricity from there to the load centers,” he said.
The basic problem is that many transmission lines, and the connections between them, are simply too small for the amount of power companies would like to squeeze through them. The difficulty is most acute for long-distance transmission, but shows up at times even over distances of a few hundred miles.
Transmission lines carrying power away from the Maple Ridge farm, near Lowville, N.Y., have sometimes become so congested that the company’s only choice is to shut down — or pay fees for the privilege of continuing to pump power into the lines.
Politicians in Washington have long known about the grid’s limitations but have made scant headway in solving them. They are reluctant to trample the prerogatives of state governments, which have traditionally exercised authority over the grid and have little incentive to push improvements that would benefit neighboring states.
In Texas, T. Boone Pickens, the oilman building the world’s largest wind farm, plans to tackle the grid problem by using a right of way he is developing for water pipelines for a 250-mile transmission line from the Panhandle to the Dallas market. He has testified in Congress that Texas policy is especially favorable for such a project and that other wind developers cannot be expected to match his efforts.
“If you want to do it on a national scale, where the transmission line distances will be much longer, and utility regulations are different, Congress must act,” he said on Capitol Hill.
Enthusiasm for wind energy is running at fever pitch these days, with bold plans on the drawing boards, like Mayor Michael Bloomberg’s notion of dotting New York City with turbines. Companies are even reviving ideas of storing wind-generated energy using compressed air or spinning flywheels.
Yet experts say that without a solution to the grid problem, effective use of wind power on a wide scale is likely to remain a dream.
The power grid is balkanized, with about 200,000 miles of power lines divided among 500 owners. Big transmission upgrades often involve multiple companies, many state governments and numerous permits. Every addition to the grid provokes fights with property owners.
These barriers mean that electrical generation is growing four times faster than transmission, according to federal figures.
In a 2005 energy law, Congress gave the Energy Department the authority to step in to approve transmission if states refused to act. The department designated two areas, one in the Middle Atlantic States and one in the Southwest, as national priorities where it might do so; 14 United States senators then signed a letter saying the department was being too aggressive.
Energy Department leaders say that, however understandable the local concerns, they are getting in the way. “Modernizing the electric infrastructure is an urgent national problem, and one we all share,” said Kevin M. Kolevar, assistant secretary for electricity delivery and energy reliability, in a speech last year.
Unlike answers to many of the nation’s energy problems, improvements to the grid would require no new technology. An Energy Department plan to source 20 percent of the nation’s electricity from wind calls for a high-voltage backbone spanning the country that would be similar to 2,100 miles of lines already operated by a company called American Electric Power.
The cost would be high, $60 billion or more, but in theory could be spread across many years and tens of millions of electrical customers. However, in most states, rules used by public service commissions to evaluate transmission investments discourage multistate projects of this sort. In some states with low electric rates, elected officials fear that new lines will simply export their cheap power and drive rates up.
Without a clear way of recovering the costs and earning a profit, and with little leadership on the issue from the federal government, no company or organization has offered to fight the political battles necessary to get such a transmission backbone built.
Texas and California have recently made some progress in building transmission lines for wind power, but nationally, the problem seems likely to get worse. Today, New York State has about 1,500 megawatts of wind capacity. A megawatt is an instantaneous measure of power. A large Wal-Mart draws about one megawatt. The state is planning for an additional 8,000 megawatts of capacity.
But those turbines will need to go in remote, windy areas that are far off the beaten path, electrically speaking, and it is not clear enough transmission capacity will be developed. Save for two underwater connections to Long Island, New York State has not built a major new power line in 20 years.
A handful of states like California that have set aggressive goals for renewable energy are being forced to deal with the issue, since the goals cannot be met without additional power lines.
But Bill Richardson, the governor of New Mexico and a former energy secretary under President Bill Clinton, contends that these piecemeal efforts are not enough to tap the nation’s potential for renewable energy.
Wind advocates say that just two of the windiest states, North Dakota and South Dakota, could in principle generate half the nation’s electricity from turbines. But the way the national grid is configured, half the country would have to move to the Dakotas in order to use the power.
“We still have a third-world grid,” Mr. Richardson said, repeating a comment he has made several times. “With the federal government not investing, not setting good regulatory mechanisms, and basically taking a back seat on everything except drilling and fossil fuels, the grid has not been modernized, especially for wind energy.”
Question regarding wind energy is who's misleading who? by Mary Kay Barton
8/26/08 Batavia Daily News, "Another Point of View" Column
I am writing in response to Horizon Wind's Project Manager, Gary Davidson's, 8/11/08 letter, "In energy crisis we need to harvest wind." Since I am the author of the letter he was referencing, I had to laugh as Davidson repeatedly stated, "the writer continues to mislead the public." Mr. Davidson, and the industry he represents, have the obvious over-riding motivation to mislead the public here - GREED! Let's consider some of the inaccuracies in Davidson's letter which should leave no doubt as to who's misleading who.
First of all, Davidson's claims that "90% of our oil comes from overseas," and that "NY gets 14% of its electricity from oil," are FALSE! The Energy Information Administration (EIA), the U.S. government's source for energy statistics, states that in 2007, the U.S. imported 58.2% of our oil (30% was from our neighbors, Canada and Mexico), and that NY got 5.35% of its electricity from oil.
While it's true that all energy sources receive subsidies, wind is outrageously over-subsidized, and can never be economically-viable on its own. On a dollar per MWh basis, wind receives $23.34 per MWh - compared to coal at $0.44; natural gas at $0.25; hydro at $0.67; and nuclear at $1.59. Together, coal, natural gas, hydro, and nuclear produce 95% of our nation's electricity supply, and for each of these mainline conventional generators, we as ratepayers get extremely high reliability and performance - each with an effective capacity exceeding 99.99%.
The subsidies for wind, however, go for a power source that provides virtually NO Capacity Value (can be relied on to be there when called upon) - which Davidson would have us believe is no big deal. Wind also requires constant "shadow capacity" - that is, conventional power sources to back up the inimical power offered by wind, highlighting the fact that wind can not replace our reliable, dispatchable power sources. Our taxes in the form of federal subsidies cover wind developments to the tune of 65%, while state incentives cover an additional 10%. No wonder wind garners the attention of the greedy!
Once again, I contacted Tom Tanton, Senior Fellow with the Institute for Energy Research, who reitereated what he had said previously in regard to similar claims made by Davidson. Tanton stated, "He (Davidson) obviously does not understand the word 'power', which is technically different than 'energy'."
Tanton explained, "Wind does not provide power...period...and cannot truthfully be said to "provide power to xxx number of homes." The only measure that is pertinent for this application ("How many homes...") is Capacity Value - also sometimes referred to as Capacity Credit, which is the percentage of nameplate capacity (applies to all types, not just wind) that can be counted on every, and any hour of the year. The Capacity Value for most wind facilities is between 0% and 10%. In essence, industrial wind turbines - regardless of how many, power no homes at all because it's not there when it's needed. There is a vast difference between power and energy." (See: "The Power of Energy," by Physicist, John Droz, at http://www.northnet.org/brvmug/WindPower/articles.html)
Contrary to Davidson's claims that "wind power 'may' lessen the need for natural gas," natural gas will actually end up being the most relied on in combination with the inefficiency of wind because it's the most easily ramped up and down. Consider that Germany has the largest installed base of wind in the world at 17% of their total installed capacity, while only actually realizing 5% of their total electric generation from wind. Most importantly, Germany's focus on wind has NOT fulfilled any of the claims which are the very basis for the existence of the wind industry - it has not reduced CO2 emissions, nor has it made Germany more energy-independent. On the contrary, Germany is one of the most energy-dependent nations in the world - on Russian gas. (See: "Germany ... Tilting at Windmills," at www.windaction.org/news/10480)
Davidson's claims about the economic benefits and jobs that "may" result because of wind are grossly exaggerated. After the 6-month installation phase, what jobs will remain? A minimum-wage lawn-mowing position? For the realities of of the economics driving industrial wind, see the analysis by energy expert, Glenn Schleede, "Risks of placing Spain-based Iberdrola's interests ahead of NY taxpayers and electric customers," at http://windaction.org/documents/17211
While it's true that all energy forms are going to have impacts in some way, Davidson's proclamation that wind's only environmental impact "is simply its visibility", is absurd. Mountain-top removal occurs with wind, just as with coal, not to mention the miles and miles of clear-cutting for access roads and turbine sites, and the resulting runoff and erosion problems. An average of 350 tons of concrete is used per turbine base. For every ton of concrete used, a ton of CO2 is emitted into the atmosphere. The expansive footprints of wind installations are immeasurable compared to conventional power sources - fracturing far more ecosystems, and people's peace and quiet enjoyment of their homes and property than any of the other sources. The devastating effect on birds and bats is well-documented, with over 500 Golden Eagles killed by turbines in California every year. Couple this with the fact that wind does not displace, hence any of the impacts from, any of the other sources.
So, if you're wondering, "Who's misleading who?", remember that Mr. Davidson is a financially-motivated, corporate wind salesman who lives nowhere near the industrial wind turbines he's working to site too close to people's homes. I, on the other hand, have nothing to gain, and simply wish to protect our natural environment from being exploited for corporate greed. I believe our tax dollars should be funding truth and due diligence from our elected officials, full disclosure of data to the public, and use of scientific methodology in planning our energy future. Obviously, these common sense action items are not the basis for misleading, but for accountability from the wind industry and our corporate-led government.
Mary Kay Barton, CitizenPowerAlliance.org
I am writing in response to Horizon Wind's Project Manager, Gary Davidson's, 8/11/08 letter, "In energy crisis we need to harvest wind." Since I am the author of the letter he was referencing, I had to laugh as Davidson repeatedly stated, "the writer continues to mislead the public." Mr. Davidson, and the industry he represents, have the obvious over-riding motivation to mislead the public here - GREED! Let's consider some of the inaccuracies in Davidson's letter which should leave no doubt as to who's misleading who.
First of all, Davidson's claims that "90% of our oil comes from overseas," and that "NY gets 14% of its electricity from oil," are FALSE! The Energy Information Administration (EIA), the U.S. government's source for energy statistics, states that in 2007, the U.S. imported 58.2% of our oil (30% was from our neighbors, Canada and Mexico), and that NY got 5.35% of its electricity from oil.
While it's true that all energy sources receive subsidies, wind is outrageously over-subsidized, and can never be economically-viable on its own. On a dollar per MWh basis, wind receives $23.34 per MWh - compared to coal at $0.44; natural gas at $0.25; hydro at $0.67; and nuclear at $1.59. Together, coal, natural gas, hydro, and nuclear produce 95% of our nation's electricity supply, and for each of these mainline conventional generators, we as ratepayers get extremely high reliability and performance - each with an effective capacity exceeding 99.99%.
The subsidies for wind, however, go for a power source that provides virtually NO Capacity Value (can be relied on to be there when called upon) - which Davidson would have us believe is no big deal. Wind also requires constant "shadow capacity" - that is, conventional power sources to back up the inimical power offered by wind, highlighting the fact that wind can not replace our reliable, dispatchable power sources. Our taxes in the form of federal subsidies cover wind developments to the tune of 65%, while state incentives cover an additional 10%. No wonder wind garners the attention of the greedy!
Once again, I contacted Tom Tanton, Senior Fellow with the Institute for Energy Research, who reitereated what he had said previously in regard to similar claims made by Davidson. Tanton stated, "He (Davidson) obviously does not understand the word 'power', which is technically different than 'energy'."
Tanton explained, "Wind does not provide power...period...and cannot truthfully be said to "provide power to xxx number of homes." The only measure that is pertinent for this application ("How many homes...") is Capacity Value - also sometimes referred to as Capacity Credit, which is the percentage of nameplate capacity (applies to all types, not just wind) that can be counted on every, and any hour of the year. The Capacity Value for most wind facilities is between 0% and 10%. In essence, industrial wind turbines - regardless of how many, power no homes at all because it's not there when it's needed. There is a vast difference between power and energy." (See: "The Power of Energy," by Physicist, John Droz, at http://www.northnet.org/brvmug/WindPower/articles.html)
Contrary to Davidson's claims that "wind power 'may' lessen the need for natural gas," natural gas will actually end up being the most relied on in combination with the inefficiency of wind because it's the most easily ramped up and down. Consider that Germany has the largest installed base of wind in the world at 17% of their total installed capacity, while only actually realizing 5% of their total electric generation from wind. Most importantly, Germany's focus on wind has NOT fulfilled any of the claims which are the very basis for the existence of the wind industry - it has not reduced CO2 emissions, nor has it made Germany more energy-independent. On the contrary, Germany is one of the most energy-dependent nations in the world - on Russian gas. (See: "Germany ... Tilting at Windmills," at www.windaction.org/news/10480)
Davidson's claims about the economic benefits and jobs that "may" result because of wind are grossly exaggerated. After the 6-month installation phase, what jobs will remain? A minimum-wage lawn-mowing position? For the realities of of the economics driving industrial wind, see the analysis by energy expert, Glenn Schleede, "Risks of placing Spain-based Iberdrola's interests ahead of NY taxpayers and electric customers," at http://windaction.org/documents/17211
While it's true that all energy forms are going to have impacts in some way, Davidson's proclamation that wind's only environmental impact "is simply its visibility", is absurd. Mountain-top removal occurs with wind, just as with coal, not to mention the miles and miles of clear-cutting for access roads and turbine sites, and the resulting runoff and erosion problems. An average of 350 tons of concrete is used per turbine base. For every ton of concrete used, a ton of CO2 is emitted into the atmosphere. The expansive footprints of wind installations are immeasurable compared to conventional power sources - fracturing far more ecosystems, and people's peace and quiet enjoyment of their homes and property than any of the other sources. The devastating effect on birds and bats is well-documented, with over 500 Golden Eagles killed by turbines in California every year. Couple this with the fact that wind does not displace, hence any of the impacts from, any of the other sources.
So, if you're wondering, "Who's misleading who?", remember that Mr. Davidson is a financially-motivated, corporate wind salesman who lives nowhere near the industrial wind turbines he's working to site too close to people's homes. I, on the other hand, have nothing to gain, and simply wish to protect our natural environment from being exploited for corporate greed. I believe our tax dollars should be funding truth and due diligence from our elected officials, full disclosure of data to the public, and use of scientific methodology in planning our energy future. Obviously, these common sense action items are not the basis for misleading, but for accountability from the wind industry and our corporate-led government.
Mary Kay Barton, CitizenPowerAlliance.org
Tuesday, August 26, 2008
Will the IPO season end with a whimper?
In a sign of uncertain times, the number of companies that have gone public this year has plummeted 75%.
Wind companies that have filed recently include First Wind Holdings (it's picked WNDY as a ticker), a Newton, Mass-based company that owns, develops and operates wind farms across the United States and in Canada. Another is Noble Environmental Power, which flipped the switch this year on new wind farms in New York and has other projects under development across the U.S.
(Click to read entire article)
Wind companies that have filed recently include First Wind Holdings (it's picked WNDY as a ticker), a Newton, Mass-based company that owns, develops and operates wind farms across the United States and in Canada. Another is Noble Environmental Power, which flipped the switch this year on new wind farms in New York and has other projects under development across the U.S.
(Click to read entire article)
Glenn R. Schleede's response to the D & C article - New York PSC to rule on Iberdrola's $4.5B bid for Energy East
Mr. Stinson & Mr. Craig:
Why do you insist on repeating what you must know -- if you have done any serious analysis - is a false statement about Iberdrola proposed "investment" in wind energy. I'm referring specifically to your statement in today's article that:
"At stake are $2 billion in upstate investment, New York's reputation as a place to do business and what might happen to the fourth-highest residential electricity rates in the nation." (emphasis added).
If you have looked seriously at wind energy, you would know that spending $2 billion on one or more "wind farms" in upstate NY does NOT equal "$2 billion in upstate investment" for some very simple to understand reasons:
1. First, at least 75% of the $2 billion would be spent for turbines, blades, towers and other equipment that is not made in NY and much of it probably would be imported. That means about $1.5 billion of the $2 billion would be "invested" elsewhere.
2. Second, of the remaining part of the $2 billion, very little would actually count as an "investment in upstate NY." Consider, for example:
a. The payments of compensation to workers. Most of those workers will be from outside "upstate NY" because most of the work in assembling turbines and other equipment is performed by specialists who are brought in temporarily and who would spend only a small portion of their compensation IN upstate NY. Most would be spent in their home towns and they would be paying their income tax in their home states.
b. Few of the materials and supplies used in constructing the "wind farm" would be purchased locally and for the portion that is procured locally, only the local value added portion would make a positive contribution to the economy in upstate NY.
c. Even the rental payments made to landowners would make a positive contribution to the local economy if the money is spent, saved, or invested locally by the landowners. There would be little if any positive contribution to the local economy if the rental payments are received by absentee landlords or if the landowners spend or invest the rent money elsewhere.
Clearly, you have fallen for the false claims about favorable economic impact made by the wind industry and by state government agencies (e.g., NYSERDA) that have failed to understand the facts.
You should also understand that the principal reasons NY is NOT considered a favorable place to do business is because of (a) high taxes, (b) high electricity prices, and (c) the fact that local economies in upstate and western NY are being bled dry -- particularly by (a) and (b) -- so that citizens have little disposable income left to spend locally.
I'm attaching for you once more an analysis of the Iberdrola proposal that should help you understand the economic facts about the planned "investment" in "wind farms."
The lack of understand of elementary economics reflected in your statement quoted above is astounding -- not to mention a disservice to your readers!
Glenn R. Schleede (former western New Yorker)
18220 Turnberry Drive
Round Hill, VA 20141-2574
540-338-9958
Why do you insist on repeating what you must know -- if you have done any serious analysis - is a false statement about Iberdrola proposed "investment" in wind energy. I'm referring specifically to your statement in today's article that:
"At stake are $2 billion in upstate investment, New York's reputation as a place to do business and what might happen to the fourth-highest residential electricity rates in the nation." (emphasis added).
If you have looked seriously at wind energy, you would know that spending $2 billion on one or more "wind farms" in upstate NY does NOT equal "$2 billion in upstate investment" for some very simple to understand reasons:
1. First, at least 75% of the $2 billion would be spent for turbines, blades, towers and other equipment that is not made in NY and much of it probably would be imported. That means about $1.5 billion of the $2 billion would be "invested" elsewhere.
2. Second, of the remaining part of the $2 billion, very little would actually count as an "investment in upstate NY." Consider, for example:
a. The payments of compensation to workers. Most of those workers will be from outside "upstate NY" because most of the work in assembling turbines and other equipment is performed by specialists who are brought in temporarily and who would spend only a small portion of their compensation IN upstate NY. Most would be spent in their home towns and they would be paying their income tax in their home states.
b. Few of the materials and supplies used in constructing the "wind farm" would be purchased locally and for the portion that is procured locally, only the local value added portion would make a positive contribution to the economy in upstate NY.
c. Even the rental payments made to landowners would make a positive contribution to the local economy if the money is spent, saved, or invested locally by the landowners. There would be little if any positive contribution to the local economy if the rental payments are received by absentee landlords or if the landowners spend or invest the rent money elsewhere.
Clearly, you have fallen for the false claims about favorable economic impact made by the wind industry and by state government agencies (e.g., NYSERDA) that have failed to understand the facts.
You should also understand that the principal reasons NY is NOT considered a favorable place to do business is because of (a) high taxes, (b) high electricity prices, and (c) the fact that local economies in upstate and western NY are being bled dry -- particularly by (a) and (b) -- so that citizens have little disposable income left to spend locally.
I'm attaching for you once more an analysis of the Iberdrola proposal that should help you understand the economic facts about the planned "investment" in "wind farms."
The lack of understand of elementary economics reflected in your statement quoted above is astounding -- not to mention a disservice to your readers!
Glenn R. Schleede (former western New Yorker)
18220 Turnberry Drive
Round Hill, VA 20141-2574
540-338-9958
Jim Sawicki's response to Aug 26 Democrat & Chronicle "PSC to rule on Iberdrola request"
Let me get right to the point.
Your newspaper's mission statement says in part - "The Democrat and Chronicle remains ever vigilant for the community good…"
Why then do you folks continue to present misleading and incomplete information concerning Industrial wind, and in particular, the Iberdrola - Energy East deal?
Why are you along with NY politicians, business and labor leaders urging the NYS PSC to override the PSC Staff's and the Administrative Law Judge's decision to protect NY citizens and ratepayers? Why are all of you favoring the interests of a foreign owned entity (with a multi-level shell game of corporate entities) instead of the interests of NY taxpayers, ratepayers and the state's economy?
Your newspaper, politicians like Schumer, Clinton, Bruno, Alesi, Maziarz, Morelle, along with business leaders and Union leaders need to act responsibly for the citizens of NYS and their economy rather than kowtowing to Iberdrola.
Sincerely,
Jim Sawicki
Canandaigua, NY
Your newspaper's mission statement says in part - "The Democrat and Chronicle remains ever vigilant for the community good…"
Why then do you folks continue to present misleading and incomplete information concerning Industrial wind, and in particular, the Iberdrola - Energy East deal?
Why are you along with NY politicians, business and labor leaders urging the NYS PSC to override the PSC Staff's and the Administrative Law Judge's decision to protect NY citizens and ratepayers? Why are all of you favoring the interests of a foreign owned entity (with a multi-level shell game of corporate entities) instead of the interests of NY taxpayers, ratepayers and the state's economy?
Your newspaper, politicians like Schumer, Clinton, Bruno, Alesi, Maziarz, Morelle, along with business leaders and Union leaders need to act responsibly for the citizens of NYS and their economy rather than kowtowing to Iberdrola.
Sincerely,
Jim Sawicki
Canandaigua, NY
SEC Complaint - S-1 application for First Wind Holdings Inc. IPO
August 19, 2008
SEC - NY Regional
3 World Financial Center, Suite 400
New York, NY 10281-1022
RE: SEC S-1 application for First Wind Holdings Inc. IPO
Cohocton Wind Watch urges the SEC to investigate First Wind Holdings Inc. and all their numerous corporate names. The S-1 disclosure application illustrates alleged fraudulent misrepresentation. CWW seeks guidance as the specific areas of evidence that your office would include in an investigation. Presently the volumes of evidence are being arranged to provide sample of documents that may be helpful in your review as to the specific breach of SEC statues.
From a careful reading of the S-1, it seems that the enormous debt financing for several projects has not been included. The standard pattern of using LLC shell companies to build and assume debt financing for each project are not reflected in the disclosures. It is obvious that the intent of submitting a future addendum for subsidiary companies is an attempt to hide the extent of the actual debt that exists from the SEC.
Cohocton Wind Watch has been tracking and questioning the activities of UPC/First Wind and its subsidiaries since 2005. After our complaint for an anti-trust investigation of the wind industry in NYS, groups around the country have contacted CWW. CWW have been involved with the NYS PSC, DEC, DOT and since last fall the State Attorney General’s office. Our group is concerned with the lack of oversight of the wind industry and the health and safety of the NYS public at large. First Wind has a track-record around the country of disregard for obtaining proper permits before starting construction or erecting meteorological test towers. We will provide documents including a stop work order, building permit issued for Cohocton after construction started, and problems of proper permits not being obtained with the County highway department prior to construction.
First Wind formerly known as UPC Wind uses various subsidiary names and various versions of those names in all their projects. We will supply applications and filings with NYS agencies using subsidiary names that no longer exist or never did exist legally. (Shady Dealings, Zeehan Zinc, Solar energy, anti-trust summary) Please especially note the use of UPC Wind Partners in these legal documents. UPC Wind Partners became Oregon Wind Partners in April of 2004 according to documents filed in Oregon as well as documents from the State of Delaware. You can view these documents at www.cascadewind.com. There are also many instances where the various subsidiaries were not registered to do business in a timely manner in NYS. And many examples were business entities were not registered with the State of Delaware, at all. CWW will provide a comprehensive list in the next few days.
Additionally the founders and management appear to change their biographical information to suit the situation. They are involved in a large number of subsidiaries, for which there is much conflicting information supplied as press releases by UPC/First Wind and from other sources. These documents will be faxed.
Many of the statements in the S-1 filing regarding First Wind’s due diligence as to wind data and their own meteorological department have not been apparent in the Cohocton Project. Documents will be provided. From leases, requiring no building within 20X rotor diameter, to statements made in the Cohocton DEIS, to statements in the prospectus it would appear the company is aware of interference affecting turbine performance. Yet in Cohocton, we have a class 3 wind resource and there is less than 1000 feet between some turbines. (Exhibit Truwind map and DEIS maps will be forwarded). UPC also proceeded with construction in Cohocton prior to receiving some of their permits and aware of the fact that Clipper was having problems with the 2.5 C96 Liberty turbine to be used in the Cohocton project. Paul Gaynor filed three applications with NYSERDA in January of 2007 making numerous false statements in each. Statements regarding leases, size, Yes! Wind, SUP in March, CPP owns assets, owned by UPC New York Wind, owned by UPC Wind Partners will be addressed.
There are additional lawsuits against UPC/First Wind, which are not listed. There are problems with their Mars Hill project pertaining to noise. An appeal has been filed with the Vermont PSC. There are two suits for non- payment for equipment filed. We will provide the details.
We can provide many documents electronically, by fax or mail a hardcopy. Please let us know which is preferable and any item you would be especially interested in our addressing first.
Cohocton Wind Watch stands ready to spend the time and effort in order to assist the SEC in fulfilling their duty in protecting the public from unscrupulous IPO filing.
If the SEC would like to arrange a personal meeting, some of our members are willing to travel to your office with supporting documentation that would help in an investigation.
Thank you for your further input on the appropriate methods to facilitate a comprehensive review of First Wind Holdings Inc. before any IPO approval.
Cordially,
James Hall for CWW
SEC - NY Regional
3 World Financial Center, Suite 400
New York, NY 10281-1022
RE: SEC S-1 application for First Wind Holdings Inc. IPO
Cohocton Wind Watch urges the SEC to investigate First Wind Holdings Inc. and all their numerous corporate names. The S-1 disclosure application illustrates alleged fraudulent misrepresentation. CWW seeks guidance as the specific areas of evidence that your office would include in an investigation. Presently the volumes of evidence are being arranged to provide sample of documents that may be helpful in your review as to the specific breach of SEC statues.
From a careful reading of the S-1, it seems that the enormous debt financing for several projects has not been included. The standard pattern of using LLC shell companies to build and assume debt financing for each project are not reflected in the disclosures. It is obvious that the intent of submitting a future addendum for subsidiary companies is an attempt to hide the extent of the actual debt that exists from the SEC.
Cohocton Wind Watch has been tracking and questioning the activities of UPC/First Wind and its subsidiaries since 2005. After our complaint for an anti-trust investigation of the wind industry in NYS, groups around the country have contacted CWW. CWW have been involved with the NYS PSC, DEC, DOT and since last fall the State Attorney General’s office. Our group is concerned with the lack of oversight of the wind industry and the health and safety of the NYS public at large. First Wind has a track-record around the country of disregard for obtaining proper permits before starting construction or erecting meteorological test towers. We will provide documents including a stop work order, building permit issued for Cohocton after construction started, and problems of proper permits not being obtained with the County highway department prior to construction.
First Wind formerly known as UPC Wind uses various subsidiary names and various versions of those names in all their projects. We will supply applications and filings with NYS agencies using subsidiary names that no longer exist or never did exist legally. (Shady Dealings, Zeehan Zinc, Solar energy, anti-trust summary) Please especially note the use of UPC Wind Partners in these legal documents. UPC Wind Partners became Oregon Wind Partners in April of 2004 according to documents filed in Oregon as well as documents from the State of Delaware. You can view these documents at www.cascadewind.com. There are also many instances where the various subsidiaries were not registered to do business in a timely manner in NYS. And many examples were business entities were not registered with the State of Delaware, at all. CWW will provide a comprehensive list in the next few days.
Additionally the founders and management appear to change their biographical information to suit the situation. They are involved in a large number of subsidiaries, for which there is much conflicting information supplied as press releases by UPC/First Wind and from other sources. These documents will be faxed.
Many of the statements in the S-1 filing regarding First Wind’s due diligence as to wind data and their own meteorological department have not been apparent in the Cohocton Project. Documents will be provided. From leases, requiring no building within 20X rotor diameter, to statements made in the Cohocton DEIS, to statements in the prospectus it would appear the company is aware of interference affecting turbine performance. Yet in Cohocton, we have a class 3 wind resource and there is less than 1000 feet between some turbines. (Exhibit Truwind map and DEIS maps will be forwarded). UPC also proceeded with construction in Cohocton prior to receiving some of their permits and aware of the fact that Clipper was having problems with the 2.5 C96 Liberty turbine to be used in the Cohocton project. Paul Gaynor filed three applications with NYSERDA in January of 2007 making numerous false statements in each. Statements regarding leases, size, Yes! Wind, SUP in March, CPP owns assets, owned by UPC New York Wind, owned by UPC Wind Partners will be addressed.
There are additional lawsuits against UPC/First Wind, which are not listed. There are problems with their Mars Hill project pertaining to noise. An appeal has been filed with the Vermont PSC. There are two suits for non- payment for equipment filed. We will provide the details.
We can provide many documents electronically, by fax or mail a hardcopy. Please let us know which is preferable and any item you would be especially interested in our addressing first.
Cohocton Wind Watch stands ready to spend the time and effort in order to assist the SEC in fulfilling their duty in protecting the public from unscrupulous IPO filing.
If the SEC would like to arrange a personal meeting, some of our members are willing to travel to your office with supporting documentation that would help in an investigation.
Thank you for your further input on the appropriate methods to facilitate a comprehensive review of First Wind Holdings Inc. before any IPO approval.
Cordially,
James Hall for CWW
New York PSC to rule on Iberdrola's $4.5B bid for Energy East
The future of the world's fourth-largest utility in New York state could soon be at an end, or a beginning.
Iberdrola SA of Bilbao, Spain, has bid more than $4.5 billion for Energy East Corp., the parent company of Rochester Gas and Electric Corp. and New York State Electric and Gas Corp. Fourteen months after the friendly deal was unveiled, Iberdrola is due to get a thumbs up or thumbs down Wednesday from the state Public Service Commission.
At stake are $2 billion in upstate investment, New York's reputation as a place to do business and what might happen to the fourth-highest residential electricity rates in the nation.
The federal government and three other northeastern states have already approved the sale of Maine-based Energy East to Iberdrola.
In New York, the deal has been held up by some of the oldest and newest concerns in the energy sector and utility regulation. The old: The state needs to ensure that more than 1 million RG&E and NYSEG customers won't get hit with higher bills. The new: Could Iberdrola, the world's foremost wind power company, manipulate the price of electricity if it owns both wind turbines and transmission lines by making it difficult or impossible for another company to open a competing wind farm or generation plant?
The PSC staff has recommended that the five commissioners reject the deal on the grounds that it isn't in consumers' best interests.
Iberdrola has said the staff concerns are overblown and that the deal is good for New York because it will bring investment, jobs and renewable energy to a state that needs all three.
Business groups, such as the Rochester Business Alliance and Greater Rochester Enterprise, and powerful politicians, including both U.S. senators, support Iberdrola, with many fearful that PSC rejection would brand the state as anti-business.
U.S. Sen. Hillary Clinton, D-N.Y., said through a spokesman Friday that "Iberdrola's proposal ... has the potential to continue to build the state's reputation as a leader in the alternative energy industry, while making a considerable investment in bringing new jobs and other economic opportunities to upstate New York."
Gov. David Paterson hasn't taken a position, but he has heaped praise on the company for promising to spend $2 billion on wind investments within five years.
Allure of wind energy
Wind energy isn't as powerful or predictable as nuclear power, coal-fired or natural-gas-fired generators, but it is not insignificant. New York has set a goal of getting 25 percent of its electricity from renewable sources such as wind by 2013. Iberdrola already runs a wind farm in Lewis County, east of Lake Ontario, and the company has proposed 10 additional wind farms throughout upstate, including three Rochester-area facilities that could generate 258 megawatts of electricity, potentially powering more than 70,000 homes yearly.
But if Iberdrola owns RG&E and NYSEG, the company will control the distribution of electricity as well as its generation — a dual role that the Public Service Commission has opposed for more than 10 years on the principle that such "vertical integration" is anti-competitive.
Iberdrola has said it would walk away from the Energy East deal if forced to give up ownership of the wind farms, which it claims aren't competitive generators because of the variable nature of wind power.
That same variable nature also means Iberdrola could not control market prices, the company argued. Yet the idea of price manipulation by wind farms is not far-fetched to some.
"Once you have the energy and transmission, there are any number of clever things you can do," said Robert McCullough, managing partner of McCullough Research of Portland, Ore. "The (PSC) staff is entirely correct."
One tactic is to withhold power when demand is high, driving up the price. But how is the price set?
Forty-five percent of electricity is sold on the day-ahead market and 5 percent is sold on the separate real-time, or instant, market, according to spokesman Kenneth Klapp of the New York Independent System Operator, which operates the state's power grid. (The other 50 percent is sold under contractual agreements.)
For the 50 percent of energy that's subject to market fluctuations, the Independent System Operator uses an industry standard known as the uniform clearing price system. The price goes up based on demand. When demand is satisfied, higher bids fail.
But final prices tend to reflect the last, highest bid, and Iberdrola would have motive to keep prices high through tactics such as withholding power, critics have said.
Iberdrola countered that wind farms aren't known to set going-rate electricity prices anywhere in the world. Sellers take what they can get, according to Pedro Azagra, the Spanish company's director of corporate development. The only reason U.S. wind farms make money is usually because of subsidies from the state, according to Azagra.
The other major concern is that Iberdrola could interfere with generation plants and wind turbine companies seeking to connect to the grid in RG&E and NYSEG territory.
Iberdrola said there were substantial penalties, including fines and forfeiture of profits, to deter such illegal behavior. But McCullough, who testified to the U.S. Senate about corrupt energy titan Enron Corp., said market surveillance by the state grid operator and U.S. Federal Energy Regulatory Commission was likely to be spotty and could not prevent all abuses.
Other states
Regulatory agencies in three states — Connecticut, Maine and New Hampshire — have already approved the Iberdrola acquisition of Energy East. Still, some of the same questions arose during regulatory hearings in those states.
Some agencies questioned whether the deal would help consumers.
In Connecticut, for instance, the state Office of Consumer Counsel contended that Iberdrola was, at best, vague in its claims about the benefits for customers.
"The massive size and financial wherewithal enjoyed by Iberdrola was often touted as a benefit for consumers and public policy ... but in response again to questioning by the department staff, the (Iberdrola) witnesses could not, or would not, offer anything concrete as assurance that this claimed benefit would in fact be of any benefit at all," Connecticut Consumer Counsel Mary J. Healey wrote in an October 2007 opinion about Iberdrola's answers to questions from the staff of the state's Department of Public Utility Control.
But one key and soothing condition has been local staffing and control.
The Connecticut Consumer Counsel's Office was heartened that Iberdrola planned to keep local utility management intact, said Richard Sobolewski, the office's supervisor of technical analysis, in a phone interview.
The Consumer Counsel's Office, which did not oppose the merger, wasn't fearful of foreign ownership of local utilities, Sobolewski said. Already, he said, some Connecticut water utilities are owned by foreign corporations.
"In this global economy we have now, you can't just say, 'We don't want foreign ownership,'" Sobolewski said.
Iberdrola maintained in Connecticut, as elsewhere, that the merger would have no adverse impact upon customers, and the state's Department of Public Utility Control concurred, approving the deal in November.
In Maine, worries about foreign ownership — especially questions about whether a mammoth corporation based in Spain would care much about American-based utility consumers — did arise.
For one Maine organization, a nonprofit called Friends of the Coast, those fears were especially important: The organization tries to ensure that 700-plus tons of nuclear waste stored at a decommissioned nuclear power plant, the Maine Yankee Atomic Power Station, will stay secured and not threaten nearby waterways.
"There's an element of distance because of the size (of Iberdrola)," said Raymond Shadis, Friends of the Coast executive director.
Friends of the Coast is a small organization, Shadis said, and he worried that Iberdrola might consider it more a nuisance that a reasonable arbiter of public safety.
But, he said, he was pleasantly surprised that the company met with Friends of the Coast and quelled the organization's anxieties.
"They were easy to work with," he said.
In New York, Iberdrola similarly has sought to assure consumers and officials that its ownership wouldn't mean drastic changes.
In Rochester, for example, management of both RG&E and NYSEG would remain in place and continue to operate the utilities, Iberdrola said. The long-familiar names of the two companies also would be retained.
Iberdrola SA of Bilbao, Spain, has bid more than $4.5 billion for Energy East Corp., the parent company of Rochester Gas and Electric Corp. and New York State Electric and Gas Corp. Fourteen months after the friendly deal was unveiled, Iberdrola is due to get a thumbs up or thumbs down Wednesday from the state Public Service Commission.
At stake are $2 billion in upstate investment, New York's reputation as a place to do business and what might happen to the fourth-highest residential electricity rates in the nation.
The federal government and three other northeastern states have already approved the sale of Maine-based Energy East to Iberdrola.
In New York, the deal has been held up by some of the oldest and newest concerns in the energy sector and utility regulation. The old: The state needs to ensure that more than 1 million RG&E and NYSEG customers won't get hit with higher bills. The new: Could Iberdrola, the world's foremost wind power company, manipulate the price of electricity if it owns both wind turbines and transmission lines by making it difficult or impossible for another company to open a competing wind farm or generation plant?
The PSC staff has recommended that the five commissioners reject the deal on the grounds that it isn't in consumers' best interests.
Iberdrola has said the staff concerns are overblown and that the deal is good for New York because it will bring investment, jobs and renewable energy to a state that needs all three.
Business groups, such as the Rochester Business Alliance and Greater Rochester Enterprise, and powerful politicians, including both U.S. senators, support Iberdrola, with many fearful that PSC rejection would brand the state as anti-business.
U.S. Sen. Hillary Clinton, D-N.Y., said through a spokesman Friday that "Iberdrola's proposal ... has the potential to continue to build the state's reputation as a leader in the alternative energy industry, while making a considerable investment in bringing new jobs and other economic opportunities to upstate New York."
Gov. David Paterson hasn't taken a position, but he has heaped praise on the company for promising to spend $2 billion on wind investments within five years.
Allure of wind energy
Wind energy isn't as powerful or predictable as nuclear power, coal-fired or natural-gas-fired generators, but it is not insignificant. New York has set a goal of getting 25 percent of its electricity from renewable sources such as wind by 2013. Iberdrola already runs a wind farm in Lewis County, east of Lake Ontario, and the company has proposed 10 additional wind farms throughout upstate, including three Rochester-area facilities that could generate 258 megawatts of electricity, potentially powering more than 70,000 homes yearly.
But if Iberdrola owns RG&E and NYSEG, the company will control the distribution of electricity as well as its generation — a dual role that the Public Service Commission has opposed for more than 10 years on the principle that such "vertical integration" is anti-competitive.
Iberdrola has said it would walk away from the Energy East deal if forced to give up ownership of the wind farms, which it claims aren't competitive generators because of the variable nature of wind power.
That same variable nature also means Iberdrola could not control market prices, the company argued. Yet the idea of price manipulation by wind farms is not far-fetched to some.
"Once you have the energy and transmission, there are any number of clever things you can do," said Robert McCullough, managing partner of McCullough Research of Portland, Ore. "The (PSC) staff is entirely correct."
One tactic is to withhold power when demand is high, driving up the price. But how is the price set?
Forty-five percent of electricity is sold on the day-ahead market and 5 percent is sold on the separate real-time, or instant, market, according to spokesman Kenneth Klapp of the New York Independent System Operator, which operates the state's power grid. (The other 50 percent is sold under contractual agreements.)
For the 50 percent of energy that's subject to market fluctuations, the Independent System Operator uses an industry standard known as the uniform clearing price system. The price goes up based on demand. When demand is satisfied, higher bids fail.
But final prices tend to reflect the last, highest bid, and Iberdrola would have motive to keep prices high through tactics such as withholding power, critics have said.
Iberdrola countered that wind farms aren't known to set going-rate electricity prices anywhere in the world. Sellers take what they can get, according to Pedro Azagra, the Spanish company's director of corporate development. The only reason U.S. wind farms make money is usually because of subsidies from the state, according to Azagra.
The other major concern is that Iberdrola could interfere with generation plants and wind turbine companies seeking to connect to the grid in RG&E and NYSEG territory.
Iberdrola said there were substantial penalties, including fines and forfeiture of profits, to deter such illegal behavior. But McCullough, who testified to the U.S. Senate about corrupt energy titan Enron Corp., said market surveillance by the state grid operator and U.S. Federal Energy Regulatory Commission was likely to be spotty and could not prevent all abuses.
Other states
Regulatory agencies in three states — Connecticut, Maine and New Hampshire — have already approved the Iberdrola acquisition of Energy East. Still, some of the same questions arose during regulatory hearings in those states.
Some agencies questioned whether the deal would help consumers.
In Connecticut, for instance, the state Office of Consumer Counsel contended that Iberdrola was, at best, vague in its claims about the benefits for customers.
"The massive size and financial wherewithal enjoyed by Iberdrola was often touted as a benefit for consumers and public policy ... but in response again to questioning by the department staff, the (Iberdrola) witnesses could not, or would not, offer anything concrete as assurance that this claimed benefit would in fact be of any benefit at all," Connecticut Consumer Counsel Mary J. Healey wrote in an October 2007 opinion about Iberdrola's answers to questions from the staff of the state's Department of Public Utility Control.
But one key and soothing condition has been local staffing and control.
The Connecticut Consumer Counsel's Office was heartened that Iberdrola planned to keep local utility management intact, said Richard Sobolewski, the office's supervisor of technical analysis, in a phone interview.
The Consumer Counsel's Office, which did not oppose the merger, wasn't fearful of foreign ownership of local utilities, Sobolewski said. Already, he said, some Connecticut water utilities are owned by foreign corporations.
"In this global economy we have now, you can't just say, 'We don't want foreign ownership,'" Sobolewski said.
Iberdrola maintained in Connecticut, as elsewhere, that the merger would have no adverse impact upon customers, and the state's Department of Public Utility Control concurred, approving the deal in November.
In Maine, worries about foreign ownership — especially questions about whether a mammoth corporation based in Spain would care much about American-based utility consumers — did arise.
For one Maine organization, a nonprofit called Friends of the Coast, those fears were especially important: The organization tries to ensure that 700-plus tons of nuclear waste stored at a decommissioned nuclear power plant, the Maine Yankee Atomic Power Station, will stay secured and not threaten nearby waterways.
"There's an element of distance because of the size (of Iberdrola)," said Raymond Shadis, Friends of the Coast executive director.
Friends of the Coast is a small organization, Shadis said, and he worried that Iberdrola might consider it more a nuisance that a reasonable arbiter of public safety.
But, he said, he was pleasantly surprised that the company met with Friends of the Coast and quelled the organization's anxieties.
"They were easy to work with," he said.
In New York, Iberdrola similarly has sought to assure consumers and officials that its ownership wouldn't mean drastic changes.
In Rochester, for example, management of both RG&E and NYSEG would remain in place and continue to operate the utilities, Iberdrola said. The long-familiar names of the two companies also would be retained.
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