Cohocton Wind Watch: Wind company lobbied for, expected stimulus money for Locust Ridge II
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Sunday, September 06, 2009

Wind company lobbied for, expected stimulus money for Locust Ridge II

Millions in federal stimulus money was expected for Locust Ridge II wind farm near Shenandoah even before President Obama took office in January, according to the company that developed the project.

"When we were lobbying (the Obama transition team), we said, 'You need to do something or we can't utilize the tax credit,' " Rich Glick, government affairs director with international wind power company Iberdrola Renewables, said in a conference call with The Republican-Herald late Thursday afternoon. "It allowed us to complete Locust Ridge."

The $59 million grant was announced in a Tuesday press release from the U.S. Treasury Department and Department of Energy. Application for the grants opened July 31, while Locust Ridge II has been up and running since May 1.

Iberdrola officials said without the $59 million in stimulus money, the $200 million Locust Ridge project may not have been completed. In the days following Obama's election and leading up to the passage of the American Recovery and Reinvestment Act in February, Iberdrola was actively lobbying for provisions that would provide the company with money up front, rather than in the form of tax credits on the back end of a project.

"The $59 million is a compensation for the work at Locust Ridge," Glick said during the conference call, which also included Iberdrola spokeswoman Jan Johnson, spokesman Paul Copelman and Director of Policy and Regulatory Affairs Eric Thumma.

"We have to have a little advance" notice money is coming, Johnson said during the call.

More than $500 million in stimulus money was awarded Tuesday for wind, solar and other alternative energy projects across the country. About $294 million went to Iberdrola, and, of that, $59 million was designated for Locust Ridge II, which has 51 wind turbines lining the mountain from Brandonville to the Aristes area.

Department of Energy spokesman Dan Leistikow told The Republican-Herald on Thursday night "no one had any guarantees about anything" with regard to stimulus money.

He also said Iberdrola would likely have received the same amount of money in the form of tax credits after the project was completed.

Given the downturn in the economy last year, many companies sought to get that money up front, with access to private capital limited, Leistikow said.

The $59 million, according to Iberdrola, is essentially reimbursement for the development of Locust Ridge II.

Company officials say jobs were saved as a result of completing Locust Ridge II.

U.S. senators Arlen Specter and Robert P. Casey on Thursday praised "Over $100 million going to Pennsylvania for clean energy projects," referring to money for Locust Ridge II and Highland Wind Farm in Salix, Pa.

Iberdrola officials said the company plans on reinvesting the money announced Tuesday in other wind projects throughout the country, promising more green jobs as a result.

"This program allows us to continue investing," Thumma told The Republican-Herald during the conference call.

In their Thursday statement, Casey and Specter repeated information that had appeared in Tuesday's press release issued by the Treasury and the energy department. The release identified Locust Ridge II as receiving more than $59 million in federal stimulus money. It is one of 12 projects listed.

The stimulus funding for wind projects replaces a system of tax credits for clean energy businesses. Rather than reimbursing for completed projects in the form of tax credits, the $787 billion stimulus package now provides "additional up-front capital, enabling companies to create jobs and begin construction that may have been stalled until now," according to the Treasury.

In other words, under the previous system, Iberdrola would have received a tax credit for the completed wind farm, but under the stimulus package, the company receives cash instead.

Any project in construction by 2010 qualifies for stimulus money under the clean energy projects program, according to Thumma.

By Thursday, confusion about the money award for Locust Ridge had spread.

"We've heard about this," a member of Casey's press office told The Republican-Herald on Thursday when asked about the listed $59 million for Locust Ridge, despite the project being up and running for four months.

A representative from Specter's office said they had been in contact with Iberdrola since the publication of a Wednesday Republican-Herald story. In the Wednesday article, an Iberdrola representative said that the stimulus money would be spent in other states, but not in Pennsylvania.

The representative from Specter's office said the company told them the funding allowed the company to complete projects under construction, including Locust Ridge, and thus the funding created and saved a large number of jobs associated with construction, operation and maintenance.

A Treasury spokeswoman said Thursday night she was "looping-in the recovery press people" from Vice President Joe Biden's office, which oversees stimulus money, for a response to The Republican-Herald's request for reaction to Iberdrola's statement.

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