Despite the touted Dec. 31 deadline, several approvals for the proposed Galloo Island Wind Farm won't be given until after 2010 begins.
Jefferson County's Board of Legislators will hold off on the payment-in-lieu-of-taxes agreement and the Hounsfield Planning Board will wait on the site plan.
Developer Upstate NY Power Corp. had asked the entities to approve those items before Dec. 31. That deadline put it in a timeline to get investors and complete 5 percent of the project in 2010. The partial completion of the project would qualify it for a stimulus program that offers a 30 percent rebate from the U.S. Treasury Department.
"Every week they delay makes the challenge a little more difficult against already tight deadlines," Upstate NY Power attorney Robert W. Burgdorf of Nixon Peabody, Rochester, said.
But the local entities are not the only source of delay. The Planning Board must wait for the state Department of Environmental Conservation to release the final environmental impact statement, which is expected this week. It also must allow for a 10-day public comment period.
The Planning Board is proceeding with a public hearing Monday. In the public notice, the board left the written comment period open until Jan. 4.
The Planning Board wants to have DEC's comments on the final statement before it makes any comments or approves the site plan.
"That's why we extended the comment period, even though it's not required," town attorney Dennis G. Whelpley said.
The Planning Board's regular meeting would be Jan. 4, but Mr. Whelpley said it likely will hold a special meeting on the project during the first week of January.
The county legislators likely will consider the PILOT at their Jan. 5 meeting. The board's Planning and Development Committee first had a resolution for the PILOT considered Nov. 17. A three-and-a-half-hour meeting, with nearly 40 public comments, followed Nov. 24.
The PILOT, which was approved by the Hounsfield Town Council on Nov. 12 and Sackets Harbor Central School District on Nov. 17, would divide annual payments starting at $2.14 million with 15 percent to the town, 50 percent to the school district and 35 percent to the county.
Board members asked the developer for clarification on many issues, including the possibility of eminent domain for securing the proposed transmission line corridor, a decommissioning agreement, the number of jobs created and the use of federal, state and local subsidies for the project.
"The legislators are going over the PILOT again," Chairman Kenneth D. Blankenbush, R-Black River, said. "I made the decision I'm not going to call a special meeting between now and our January meeting."
The time should be used to clear up any more questions board members have on the project and PILOT.
The vote will be at the Jan. 5 meeting "unless something happens between now and then," Mr. Blankenbush said.
If county legislators approve the PILOT, the board of the Jefferson County Industrial Development Agency would vote on it Jan. 7, JCIDA Chief Executive Officer Donald C. Alexander said.
The county legislators will vote on the PILOT as a full board, bypassing the two committees that originally were scheduled to see the resolution, Mr. Blankenbush said.
"Hopefully, we will get everything answered and the PILOT voted on one way or the other," he said.
Tuesday, December 15, 2009
Finally, scrutiny of wind projects
A few weeks ago there was a most revealing article in the Albany Times Union, and it affects all New York State citizens.
Let's see if I have this right.
The New York State Public Service Commission (PSC) recently said that before industrial wind projects could be approved that they had to:
1. prove that their electricity was not just going to replace CO2-free hydro-produced electricity, and
2. verify that available transmission capability was sufficient to carry their anticipated new power.
Wow. My first reaction was: You mean to say that these things haven't been being formally checked out out all along? The admission of that is simply astounding.
Then I see from the story that the big multinational wind companies have objected to these "conditions" as being too expensive. Additionally they expressed great concern that if the results of these analysis turned out to be negative, that this information could be used against them as a basis to turn down a project. Imagine that!
So, in other words, New York State taxpayers and ratepayers should simply fund the developers' lucrative projects even though they may well be providing zero environmental benefit (replacing hydro), and may not be able to have their power go onto the New York State grid?
That should make it quite clear to anyone paying attention as to what their motivation is -- and it is not about benefiting New York State citizens, the New York State environment, or the New York State electricity situation.
And then, to top it off, a purported "environmental" representative -- Carol Murphy, executive director of the Alliance for Clean Energy New York (ACE-NY) -- was asked for her take on all this.
She says that the PSC's required checks are: "ridiculous, they're not helpful at all. They send a very, very bad message. What they tell people to do is try to avoid the PSC." She went on to say that ACE-NY might sue the NYS PSC on this matter!
Looking at ACE-NY's Mission Statement (http://www.aceny.org/about/mission-statement.cfm), it makes bold proclamations about their organization being all about benefiting New York State economically and reducing air pollution.
Sounds like their PR people may not be in communication with their executive director. Why would they object to making sure that CO2 was really being saved and that the power being paid for was really going to the grid?
Oh yes, I get it now. They are really wind-energy lobbyists, and those good words about their "mission" are just a sleight-of-hand show to rope in the gullible public to support their self-serving lobbying efforts. It's good that this situation has given us an opportunity to see their real spots!
So kudos to the NYS PSC for finally asking for some extremely reasonable information -- hopefully this will be the start for them asking for even more worthwhile data, and more are definitely needed. (See: for some examples.)
Rasperries for the wind industry for not accepting their corporate responsibilities.
Disdain for blatant lobbyists like ACE-NY, whose more appropriate acronym should be JOKER-NY.
John Droz Jr.
Brantingham Lake
Let's see if I have this right.
The New York State Public Service Commission (PSC) recently said that before industrial wind projects could be approved that they had to:
1. prove that their electricity was not just going to replace CO2-free hydro-produced electricity, and
2. verify that available transmission capability was sufficient to carry their anticipated new power.
Wow. My first reaction was: You mean to say that these things haven't been being formally checked out out all along? The admission of that is simply astounding.
Then I see from the story that the big multinational wind companies have objected to these "conditions" as being too expensive. Additionally they expressed great concern that if the results of these analysis turned out to be negative, that this information could be used against them as a basis to turn down a project. Imagine that!
So, in other words, New York State taxpayers and ratepayers should simply fund the developers' lucrative projects even though they may well be providing zero environmental benefit (replacing hydro), and may not be able to have their power go onto the New York State grid?
That should make it quite clear to anyone paying attention as to what their motivation is -- and it is not about benefiting New York State citizens, the New York State environment, or the New York State electricity situation.
And then, to top it off, a purported "environmental" representative -- Carol Murphy, executive director of the Alliance for Clean Energy New York (ACE-NY) -- was asked for her take on all this.
She says that the PSC's required checks are: "ridiculous, they're not helpful at all. They send a very, very bad message. What they tell people to do is try to avoid the PSC." She went on to say that ACE-NY might sue the NYS PSC on this matter!
Looking at ACE-NY's Mission Statement (http://www.aceny.org/about/mission-statement.cfm), it makes bold proclamations about their organization being all about benefiting New York State economically and reducing air pollution.
Sounds like their PR people may not be in communication with their executive director. Why would they object to making sure that CO2 was really being saved and that the power being paid for was really going to the grid?
Oh yes, I get it now. They are really wind-energy lobbyists, and those good words about their "mission" are just a sleight-of-hand show to rope in the gullible public to support their self-serving lobbying efforts. It's good that this situation has given us an opportunity to see their real spots!
So kudos to the NYS PSC for finally asking for some extremely reasonable information -- hopefully this will be the start for them asking for even more worthwhile data, and more are definitely needed. (See: for some examples.)
Rasperries for the wind industry for not accepting their corporate responsibilities.
Disdain for blatant lobbyists like ACE-NY, whose more appropriate acronym should be JOKER-NY.
John Droz Jr.
Brantingham Lake
Monday, December 14, 2009
Clarification with Prattsburgh, Ecogen story
Prattsburgh, NY
The events described in a recent article need some clarification. It was reported that “Both councilmen repeatedly said the current Ecogen project would be exempt from any new action by the board.” We believe this is about board discussions this past year surrounding our yet to be completed wind law. We asked for a “variance” procedure to be included in our wind law. This was in no way to “exempt” any one developer or to exclude any one developer. It was to allow any developer to ask for a variance to portions of the law. When language was added to the law specifically exempting Ecogen from the law, we adamantly argued against it. Any land use regulations should provide for a variance procedure, and this law should be no different.
It is our belief that the Town should not enact legislation that favors or hinders any particular developer. We also believe the Town should not be hindered by any developer from enacting legislation to protect the health and safety of the citizens. The Town should pass a common-sense wind law that protects both an individual’s right to develop their property, and other individual’s right to not develop theirs.
The noise problems occurring in Cohocton are not unique to Cohocton. We have spoken with people and heard reports from around the world describing identical experiences to those coming from residents of Cohocton. It is clear that if industrial wind turbines are installed too close to homes, there will be problems. Many people are not aware that the setbacks proposed in Prattsburgh are half of the distance of the proposed setbacks in Italy, which is part of the same project.
The next point is small, but we believe needs addressing. We are both acutely aware that the DEC has no “requirements” for noise, what they do have is recommendations. We have both asked for the developers to follow those recommendations. While we have been verbally assured that the turbines will not be noisy, when we have asked for written confirmation that they will not exceed the DEC’s recommended noise guidelines, we have repeatedly been threatened with legal action.
We want to make sure all of the residents of Prattsburgh get a clear picture of what we have both said and what our position is regarding these issues. We certainly have not been singling out any one developer in any way. What we have been doing is trying to set parameters around which any and all wind developers in the town must follow, for the health and safety of our residents.
We welcome any citizen to contact us regarding our views, and express an absolute willingness to listen to and consider your views.
Steve Kula and Chuck Shick
Prattsburgh
The events described in a recent article need some clarification. It was reported that “Both councilmen repeatedly said the current Ecogen project would be exempt from any new action by the board.” We believe this is about board discussions this past year surrounding our yet to be completed wind law. We asked for a “variance” procedure to be included in our wind law. This was in no way to “exempt” any one developer or to exclude any one developer. It was to allow any developer to ask for a variance to portions of the law. When language was added to the law specifically exempting Ecogen from the law, we adamantly argued against it. Any land use regulations should provide for a variance procedure, and this law should be no different.
It is our belief that the Town should not enact legislation that favors or hinders any particular developer. We also believe the Town should not be hindered by any developer from enacting legislation to protect the health and safety of the citizens. The Town should pass a common-sense wind law that protects both an individual’s right to develop their property, and other individual’s right to not develop theirs.
The noise problems occurring in Cohocton are not unique to Cohocton. We have spoken with people and heard reports from around the world describing identical experiences to those coming from residents of Cohocton. It is clear that if industrial wind turbines are installed too close to homes, there will be problems. Many people are not aware that the setbacks proposed in Prattsburgh are half of the distance of the proposed setbacks in Italy, which is part of the same project.
The next point is small, but we believe needs addressing. We are both acutely aware that the DEC has no “requirements” for noise, what they do have is recommendations. We have both asked for the developers to follow those recommendations. While we have been verbally assured that the turbines will not be noisy, when we have asked for written confirmation that they will not exceed the DEC’s recommended noise guidelines, we have repeatedly been threatened with legal action.
We want to make sure all of the residents of Prattsburgh get a clear picture of what we have both said and what our position is regarding these issues. We certainly have not been singling out any one developer in any way. What we have been doing is trying to set parameters around which any and all wind developers in the town must follow, for the health and safety of our residents.
We welcome any citizen to contact us regarding our views, and express an absolute willingness to listen to and consider your views.
Steve Kula and Chuck Shick
Prattsburgh
With Wind Energy, Opportunity for Corruption
The northern trade winds of the Canary Islands have long tempted daredevil windsurfers, but now the gusts rising up to 60 kilometers per hour are attracting giant wind turbines and the millions of euros behind them.
With their blades whirling, the 55 turbines that stand beyond the gray pebble beach of Pozo Izquierdo are stark, white symbols of a growing industry and the potential for abundant clean energy — and corruption.
The town of Santa Lucía Tirajana, host to the annual Grand Slam windsurfing championships, was struck this year with gale force. A yearlong investigation by the Guardia Civil — the Spanish gendarmerie — turned up irregularities in a plan to build a new wind park. Now the mayor, five town officials and two wind park developers are fighting criminal charges that include influence peddling, misuse of public office, misappropriation of land and bribery. The motivation? Up to €40 million in European Union subsidies.
This investigation and others taking place in Europe and the United States shed light on the sometimes freewheeling approach of the fast-evolving wind energy industry. Stoking the frenzy in Europe is the vast revenue available through a variety of subsidies, including the European Union’s farm subsidy system, which distributes more than €50 billion, or $73 billion, a year to farmers, corporate agribusiness and rural development projects.
In Europe, more than €6 billion in structural and agricultural subsidies have been allocated for renewable energy over a 13-year period ending in 2013. This is an attractive sum for a relatively new industry that experts say gets the benefit of the doubt because it has an eco-friendly image that seems above political reproach. And clean energy is at the forefront of the debate over climate change that is drawing global attention this week in Copenhagen.
The authorities say it is impossible to quantify the level of fraud in public spending on wind energy because investigations are scattered across different countries among the regional and fiscal police. But critics say the available riches and patchy controls are luring a rogue’s gallery of corrupt politicians and entrepreneurs trying to literally create money out of thin air.
“It’s the same mentality as a Texas oil strike,” said Jesus Bethencourt Rosillo, a Santa Lucía lawyer who represents a Canary Islands whistle-blower. “This is a gold rush, and everyone wants a wind park at whatever price.”
The European Wind Energy Association — which represents 600 manufacturers and members in 60 countries, including some outside of Europe, and which attracted more than €10.9 billion last year in investments — argues that problems with corruption are rare and that industry regulation is not needed.
“We have fraud legislation in all countries, and this is a matter for the national police,” said Christian Kjaer, chief executive of the trade group.
But critics like John Etherington, a former professor of ecology at the University of Wales and author of “The Wind Farm Scam,” contends that because the industry is so dependent on subsidies, it is highly vulnerable to scams. Mr. Etherington said that he is “not sure that the industry is regulated at all — let alone well regulated.”
Police investigators have been busy across the Continent in recent months. This year five Corsican nationalists were jailed and fined for skimming €1.54 million in European subsidies for wind farms. In Italy — where three investigations are unfolding — 15 people were arrested last month in a case the authorities code-named Gone With the Wind. They described it as a complicated Ponzi-style scheme to reap as much as €30 million in E.U. aid.
One of the suspects — who was briefly held under house arrest — was a former business partner of the founder of a Boston-based energy company called First Wind. The company’s records were subpoenaed last year by the New York attorney general’s office, which is investigating the state’s wind industry to determine whether promoters improperly sought land-use agreements from officials in return for special benefits.
In the United States, one of the top three wind energy producers along with Germany and Spain, the Energy Department is doling out aid covering 30 percent of project costs and has already announced more than $1 billion in grants — with individual grants near $100 million.
Wind farm development follows a common pattern in Europe and the United States. It is a complex chain in which, typically, small entrepreneurs strike deals for long-term land leases with farmers and seek local government approvals for wind parks. Then the entrepreneurs sell development packages through intermediaries to large multinational companies or utilities that actually build the wind parks.
Even the big companies have been burned in the process; Vestas Wind Systems, a Danish company that is the leading manufacturer of wind turbines in the world, revealed this year that it was the victim of a €12 million fraud scheme. The company asserts that three top Spanish employees, who are under investigation by the authorities in Barcelona, issued payments for nonexistent services to companies under their control, shifting the money in separate businesses to invest in wind turbines.
In New York, wind developers were prodded over the summer to sign an ethics code barring gifts to public officials, a standard developed by the office of the state attorney general, Andrew Cuomo, who also created a task force to monitor development of the industry.
“It’s a very new area of development with the promise of a lot of money that can be made, both for the developers of wind farms and landowners,” said John Milgrim, a spokesman for the New York attorney general’s office, who noted that the industry had been largely unregulated. “Anytime there’s financial dealings, new industry and large sums of money, there is potential for corruption.
“Part of what government can do is create standards that both sides can follow,” he said, noting that the code establishes a transparent system for public information about land leases and connections between wind developers and municipal officials and their families.
The European wind association does not have a code of conduct for developers, though Mr. Kjaer, the chief executive, said it would have no trouble operating with one.
The board of his association includes a representative from the National Italian Wind Energy Association. In November, Oreste Vigorito, the leader of the Italian association, was arrested in the Gone With the Wind case and accused of participating in an illegal scheme to collect European subsidies. Mr. Vigorito’s lawyer says he is innocent of any wrongdoing.
As long as wind energy benefits from generous subsidies, sometimes “easy money can be made in the sector and that can attract the unscrupulous,” said Jason Wright, a Milan-based director of Kroll Associates, a risk security investigative firm, which has uncovered evidence of bribery and fraudulent environmental evaluations for Italian wind parks.
The lure is basic: a standard 2 megawatt turbine costs about €2.75 million to build and earns about €275,000 a year for the sale of electricity at the market rate. But that revenue can double to about €500,000 with special state-mandated incentives paid by utilities as a premium for renewable energies.
In many countries, wind producers are receiving feed-in tariffs — special premiums above the market rate as a bonus for renewable energy — or special rates for signing contracts over a period of 15 to 25 years.
Richard Robb, a New York investor in wind parks in France and Germany through his firm Christofferson, Robb & Co., said that even with lackluster winds there was a cushion of revenue for investors because of these tariffs.
In Germany, he said, his wind farm qualified for a feed-in tariff of about €83.6 a megawatt hour while the free market price ranged between €30 to €70 — helping to deliver as much as a 15 percent return. “None of this,” he said, “would have been possible without government subsidies.”
Last year Spanish incentives, or “premium” prices paid to wind producers above market rates, totaled almost €1.2 billion, a cost ultimately borne by consumers.
Lately in the land of Don Quixote, some local Spanish prosecutors have been tilting against some of the turbines scattered among the 737 wind parks that produce 16,740 megawatts of energy, mostly in northeastern Castile and León and Galicia. In Galicia, the former head of industry and energy is facing charges of influence trafficking for granting approvals for seven wind parks developed by his brother-in-law.
In the Canary Islands, where there are 44 parks, two investigations led to arrests of public officials and developers on charges of influence trafficking and bribery. The key to cracking those cases was thousands of wiretaps conducted by Guardia Civil investigators.
They were listening to conversations involving Santa Lucía wind developers and municipal officials accused of concocting a secret deal to swap private land near the beach of Pozo Izquierdo for municipal land — because subsidies were more likely to be granted for wind parks on public lands. At stake was up to €40 million from a fund that doles out E.U. aid to regions in Spain’s outer territories.
Silverio Matos, the mayor of Santa Lucía, who is accused of abuse of public office and insider dealing, has insisted he is the innocent victim of political persecution. Judicial proceedings are expecting to resume in January.
Similar investigations are taking place in Sicily, the birthplace of wind energy in Italy. In the Gone With the Wind operation, the authorities uncovered a complicated scheme to harvest E.U. aid, according to Col. Mario Imparato of the Guardia di Finanza. A banking official was part of the plot, he said, verifying documents for subsidies. The scheme involved an elaborate web of wind companies; one would successfully apply for E.U. funds, use a portion for construction and then send the rest to a company outside Italy, Colonel Imparato said. The foreign companies would then shift money to another company to help it qualify for a larger flow of E.U. subsidies.
A separate investigation, labeled Operation Aeolus, in western Sicily, resulted in the arrests of seven people this year who will face trial in January. In that case, prosecutors allege that organized crime had simply adapted old-fashioned techniques like kickbacks and bribery to make money from new energy, including giving one council member €75,000 and a Mercedes to vote in favor of a wind park.
“Cash is king,” said Andrew Campanelli, a forensics investigator for Deloitte Financial Advisory Services in New York. “In a down economy, individuals might be more inclined to need more cash. They might look at green energy as a mechanism to use ill-gotten funds.”
With their blades whirling, the 55 turbines that stand beyond the gray pebble beach of Pozo Izquierdo are stark, white symbols of a growing industry and the potential for abundant clean energy — and corruption.
The town of Santa Lucía Tirajana, host to the annual Grand Slam windsurfing championships, was struck this year with gale force. A yearlong investigation by the Guardia Civil — the Spanish gendarmerie — turned up irregularities in a plan to build a new wind park. Now the mayor, five town officials and two wind park developers are fighting criminal charges that include influence peddling, misuse of public office, misappropriation of land and bribery. The motivation? Up to €40 million in European Union subsidies.
This investigation and others taking place in Europe and the United States shed light on the sometimes freewheeling approach of the fast-evolving wind energy industry. Stoking the frenzy in Europe is the vast revenue available through a variety of subsidies, including the European Union’s farm subsidy system, which distributes more than €50 billion, or $73 billion, a year to farmers, corporate agribusiness and rural development projects.
In Europe, more than €6 billion in structural and agricultural subsidies have been allocated for renewable energy over a 13-year period ending in 2013. This is an attractive sum for a relatively new industry that experts say gets the benefit of the doubt because it has an eco-friendly image that seems above political reproach. And clean energy is at the forefront of the debate over climate change that is drawing global attention this week in Copenhagen.
The authorities say it is impossible to quantify the level of fraud in public spending on wind energy because investigations are scattered across different countries among the regional and fiscal police. But critics say the available riches and patchy controls are luring a rogue’s gallery of corrupt politicians and entrepreneurs trying to literally create money out of thin air.
“It’s the same mentality as a Texas oil strike,” said Jesus Bethencourt Rosillo, a Santa Lucía lawyer who represents a Canary Islands whistle-blower. “This is a gold rush, and everyone wants a wind park at whatever price.”
The European Wind Energy Association — which represents 600 manufacturers and members in 60 countries, including some outside of Europe, and which attracted more than €10.9 billion last year in investments — argues that problems with corruption are rare and that industry regulation is not needed.
“We have fraud legislation in all countries, and this is a matter for the national police,” said Christian Kjaer, chief executive of the trade group.
But critics like John Etherington, a former professor of ecology at the University of Wales and author of “The Wind Farm Scam,” contends that because the industry is so dependent on subsidies, it is highly vulnerable to scams. Mr. Etherington said that he is “not sure that the industry is regulated at all — let alone well regulated.”
Police investigators have been busy across the Continent in recent months. This year five Corsican nationalists were jailed and fined for skimming €1.54 million in European subsidies for wind farms. In Italy — where three investigations are unfolding — 15 people were arrested last month in a case the authorities code-named Gone With the Wind. They described it as a complicated Ponzi-style scheme to reap as much as €30 million in E.U. aid.
One of the suspects — who was briefly held under house arrest — was a former business partner of the founder of a Boston-based energy company called First Wind. The company’s records were subpoenaed last year by the New York attorney general’s office, which is investigating the state’s wind industry to determine whether promoters improperly sought land-use agreements from officials in return for special benefits.
In the United States, one of the top three wind energy producers along with Germany and Spain, the Energy Department is doling out aid covering 30 percent of project costs and has already announced more than $1 billion in grants — with individual grants near $100 million.
Wind farm development follows a common pattern in Europe and the United States. It is a complex chain in which, typically, small entrepreneurs strike deals for long-term land leases with farmers and seek local government approvals for wind parks. Then the entrepreneurs sell development packages through intermediaries to large multinational companies or utilities that actually build the wind parks.
Even the big companies have been burned in the process; Vestas Wind Systems, a Danish company that is the leading manufacturer of wind turbines in the world, revealed this year that it was the victim of a €12 million fraud scheme. The company asserts that three top Spanish employees, who are under investigation by the authorities in Barcelona, issued payments for nonexistent services to companies under their control, shifting the money in separate businesses to invest in wind turbines.
In New York, wind developers were prodded over the summer to sign an ethics code barring gifts to public officials, a standard developed by the office of the state attorney general, Andrew Cuomo, who also created a task force to monitor development of the industry.
“It’s a very new area of development with the promise of a lot of money that can be made, both for the developers of wind farms and landowners,” said John Milgrim, a spokesman for the New York attorney general’s office, who noted that the industry had been largely unregulated. “Anytime there’s financial dealings, new industry and large sums of money, there is potential for corruption.
“Part of what government can do is create standards that both sides can follow,” he said, noting that the code establishes a transparent system for public information about land leases and connections between wind developers and municipal officials and their families.
The European wind association does not have a code of conduct for developers, though Mr. Kjaer, the chief executive, said it would have no trouble operating with one.
The board of his association includes a representative from the National Italian Wind Energy Association. In November, Oreste Vigorito, the leader of the Italian association, was arrested in the Gone With the Wind case and accused of participating in an illegal scheme to collect European subsidies. Mr. Vigorito’s lawyer says he is innocent of any wrongdoing.
As long as wind energy benefits from generous subsidies, sometimes “easy money can be made in the sector and that can attract the unscrupulous,” said Jason Wright, a Milan-based director of Kroll Associates, a risk security investigative firm, which has uncovered evidence of bribery and fraudulent environmental evaluations for Italian wind parks.
The lure is basic: a standard 2 megawatt turbine costs about €2.75 million to build and earns about €275,000 a year for the sale of electricity at the market rate. But that revenue can double to about €500,000 with special state-mandated incentives paid by utilities as a premium for renewable energies.
In many countries, wind producers are receiving feed-in tariffs — special premiums above the market rate as a bonus for renewable energy — or special rates for signing contracts over a period of 15 to 25 years.
Richard Robb, a New York investor in wind parks in France and Germany through his firm Christofferson, Robb & Co., said that even with lackluster winds there was a cushion of revenue for investors because of these tariffs.
In Germany, he said, his wind farm qualified for a feed-in tariff of about €83.6 a megawatt hour while the free market price ranged between €30 to €70 — helping to deliver as much as a 15 percent return. “None of this,” he said, “would have been possible without government subsidies.”
Last year Spanish incentives, or “premium” prices paid to wind producers above market rates, totaled almost €1.2 billion, a cost ultimately borne by consumers.
Lately in the land of Don Quixote, some local Spanish prosecutors have been tilting against some of the turbines scattered among the 737 wind parks that produce 16,740 megawatts of energy, mostly in northeastern Castile and León and Galicia. In Galicia, the former head of industry and energy is facing charges of influence trafficking for granting approvals for seven wind parks developed by his brother-in-law.
In the Canary Islands, where there are 44 parks, two investigations led to arrests of public officials and developers on charges of influence trafficking and bribery. The key to cracking those cases was thousands of wiretaps conducted by Guardia Civil investigators.
They were listening to conversations involving Santa Lucía wind developers and municipal officials accused of concocting a secret deal to swap private land near the beach of Pozo Izquierdo for municipal land — because subsidies were more likely to be granted for wind parks on public lands. At stake was up to €40 million from a fund that doles out E.U. aid to regions in Spain’s outer territories.
Silverio Matos, the mayor of Santa Lucía, who is accused of abuse of public office and insider dealing, has insisted he is the innocent victim of political persecution. Judicial proceedings are expecting to resume in January.
Similar investigations are taking place in Sicily, the birthplace of wind energy in Italy. In the Gone With the Wind operation, the authorities uncovered a complicated scheme to harvest E.U. aid, according to Col. Mario Imparato of the Guardia di Finanza. A banking official was part of the plot, he said, verifying documents for subsidies. The scheme involved an elaborate web of wind companies; one would successfully apply for E.U. funds, use a portion for construction and then send the rest to a company outside Italy, Colonel Imparato said. The foreign companies would then shift money to another company to help it qualify for a larger flow of E.U. subsidies.
A separate investigation, labeled Operation Aeolus, in western Sicily, resulted in the arrests of seven people this year who will face trial in January. In that case, prosecutors allege that organized crime had simply adapted old-fashioned techniques like kickbacks and bribery to make money from new energy, including giving one council member €75,000 and a Mercedes to vote in favor of a wind park.
“Cash is king,” said Andrew Campanelli, a forensics investigator for Deloitte Financial Advisory Services in New York. “In a down economy, individuals might be more inclined to need more cash. They might look at green energy as a mechanism to use ill-gotten funds.”
Friday, December 11, 2009
United Technologies Buys Large Stake in Struggling Wind Company
United Technologies, a global industrial heavyweight, will invest $270 million for a 49.5 percent stake in Clipper Windpower, a struggling California-based turbine maker.
The deal, announced this week, marks a change in the ownership structure for one of the few major American-owned turbine makers. (Another is General Electric.)
United Technologies, a Hartford-based parent company to businesses such as jet engine maker Pratt & Whitney and elevator maker Otis, has recently shown interest in alternative energy. For example, it has licensed its molten salt storage technology to solar power plant builder SolarReserve.
In a statement on Wednesday, United Technologies said that it “expects to work closely with Clipper Windpower to improve the company’s core technology, manufacturing, product quality, and supply management capabilities.”
The agreement, the company added, “allows U.T.C. to expand its power generation portfolio and enter the high-growth wind power segment.”
Clipper, which is listed on London’s A.I.M. stock exchange, began to look for investors earlier this year as the global recession took its toll and customers delayed turbine orders. Millions of dollars spent fixing defects in some older turbines further sapped Clipper’s cash flow. Its share price rose by close to 20 percent on Thursday, after the deal was announced.
Douglas Pertz, Clipper’s chief executive, said in an interview on Friday that he expects to see the market revive in the latter half of 2010. (On Thursday, G.E. announced a $1.4 billion deal to supply turbines to what would be the nation’s largest wind farm, in Oregon.)
United Technologies has agreed not to acquire additional shares of Clipper for two years following the close of the deal.
Mr. Pertz argued that there are similarities between General Electric and United Technologies — as well as a bit of history.
Clipper’s chairman, James Dehlsen, founded one of the United States’ early wind turbine makers, Zond, in 1980, and subsequently sold it to Enron. When Enron collapsed earlier this decade, General Electric acquired its wind division and subsequently turned the unit into the nation’s biggest turbine manufacturer. (Mr. Dehlsen started Clipper in 2001.)
“G.E. bought a company that was probably half a billion dollars in sales at the time and they have grown it into a $6 billion business,” said Mr. Pertz in a telephone interview Friday. “United Technologies, I would suggest to you, is like the G.E. of old.”
While Clipper focuses on its 2.5-megawatt Liberty model, the company will continue work in the United Kingdom on the development of the world’s largest windmill, a 10-megawatt, 574-foot-tall offshore turbine dubbed Project Britannia.
The Crown Estate, which manages royal property for Queen Elizabeth II, has bought the prototype of the turbine.
The deal, announced this week, marks a change in the ownership structure for one of the few major American-owned turbine makers. (Another is General Electric.)
United Technologies, a Hartford-based parent company to businesses such as jet engine maker Pratt & Whitney and elevator maker Otis, has recently shown interest in alternative energy. For example, it has licensed its molten salt storage technology to solar power plant builder SolarReserve.
In a statement on Wednesday, United Technologies said that it “expects to work closely with Clipper Windpower to improve the company’s core technology, manufacturing, product quality, and supply management capabilities.”
The agreement, the company added, “allows U.T.C. to expand its power generation portfolio and enter the high-growth wind power segment.”
Clipper, which is listed on London’s A.I.M. stock exchange, began to look for investors earlier this year as the global recession took its toll and customers delayed turbine orders. Millions of dollars spent fixing defects in some older turbines further sapped Clipper’s cash flow. Its share price rose by close to 20 percent on Thursday, after the deal was announced.
Douglas Pertz, Clipper’s chief executive, said in an interview on Friday that he expects to see the market revive in the latter half of 2010. (On Thursday, G.E. announced a $1.4 billion deal to supply turbines to what would be the nation’s largest wind farm, in Oregon.)
United Technologies has agreed not to acquire additional shares of Clipper for two years following the close of the deal.
Mr. Pertz argued that there are similarities between General Electric and United Technologies — as well as a bit of history.
Clipper’s chairman, James Dehlsen, founded one of the United States’ early wind turbine makers, Zond, in 1980, and subsequently sold it to Enron. When Enron collapsed earlier this decade, General Electric acquired its wind division and subsequently turned the unit into the nation’s biggest turbine manufacturer. (Mr. Dehlsen started Clipper in 2001.)
“G.E. bought a company that was probably half a billion dollars in sales at the time and they have grown it into a $6 billion business,” said Mr. Pertz in a telephone interview Friday. “United Technologies, I would suggest to you, is like the G.E. of old.”
While Clipper focuses on its 2.5-megawatt Liberty model, the company will continue work in the United Kingdom on the development of the world’s largest windmill, a 10-megawatt, 574-foot-tall offshore turbine dubbed Project Britannia.
The Crown Estate, which manages royal property for Queen Elizabeth II, has bought the prototype of the turbine.
Judge halts town vote on wind energy deal
A judge has temporarily barred a Steuben County Town Board from voting to settle a lawsuit by a wind power developer after concerns were raised that lame-duck board members wanted to strike a last-minute deal with the company.
The order by state Supreme Court Justice Stephen Lindley, signed Monday, short-circuited a special board meeting Monday night at which a majority of the Prattsburgh Town Board may have been prepared to settle the lawsuit.
The order was sought by two other board members who are not in favor of the wind project as currently proposed.
Ecogen Wind LLC sued Prattsburgh's board members in early November, saying the board had improperly withheld approval of a proposal to locate 16 electricity-generating wind turbines in the town. The lawsuit was filed days after voters in the hilly Steuben County community had ousted the supervisor and a board member who favored the Ecogen plan, choosing instead candidates who were skeptical of the proposal.
Ecogen's legal papers made clear they feared that the incoming board, where skeptics will outnumber project advocates 4-1, would permanently nix the project.
According to papers filed with Lindley this week by board members Steven Kula and Charles Shick, Ecogen worked out a settlement with pro-project forces on the town board and sought to have the agreement approved Monday night.
"I'm afraid this whole thing was an opportunity for the existing Town Board and the wind company to settle this matter before the (newly) elected board was seated," Kula said.
He said the proposed settlement would allow the wind development to go forward on Ecogen's terms, and was "hugely detrimental" to town residents.
Kula and Shick argued that the town was obligated to hire a separate attorney to represent them in the Ecogen suit, and persuaded the judge to block any board vote on the lawsuit until full consideration could be given to that request.
The board is to discuss the separate-lawyer issue at a special meeting next Monday evening, Kula said. Lindley has scheduled a hearing Tuesday morning to consider whether to continue his ban on a Town Board vote.
Ecogen filed a similar legal action against the neighboring town of Italy, Yates County, where the company wants to build 17 turbines. That town's board voted in October to reject the Ecogen project.
Turbines in the two towns would be 415 feet high and could generate up to 76 megawatts of electricity.
The order by state Supreme Court Justice Stephen Lindley, signed Monday, short-circuited a special board meeting Monday night at which a majority of the Prattsburgh Town Board may have been prepared to settle the lawsuit.
The order was sought by two other board members who are not in favor of the wind project as currently proposed.
Ecogen Wind LLC sued Prattsburgh's board members in early November, saying the board had improperly withheld approval of a proposal to locate 16 electricity-generating wind turbines in the town. The lawsuit was filed days after voters in the hilly Steuben County community had ousted the supervisor and a board member who favored the Ecogen plan, choosing instead candidates who were skeptical of the proposal.
Ecogen's legal papers made clear they feared that the incoming board, where skeptics will outnumber project advocates 4-1, would permanently nix the project.
According to papers filed with Lindley this week by board members Steven Kula and Charles Shick, Ecogen worked out a settlement with pro-project forces on the town board and sought to have the agreement approved Monday night.
"I'm afraid this whole thing was an opportunity for the existing Town Board and the wind company to settle this matter before the (newly) elected board was seated," Kula said.
He said the proposed settlement would allow the wind development to go forward on Ecogen's terms, and was "hugely detrimental" to town residents.
Kula and Shick argued that the town was obligated to hire a separate attorney to represent them in the Ecogen suit, and persuaded the judge to block any board vote on the lawsuit until full consideration could be given to that request.
The board is to discuss the separate-lawyer issue at a special meeting next Monday evening, Kula said. Lindley has scheduled a hearing Tuesday morning to consider whether to continue his ban on a Town Board vote.
Ecogen filed a similar legal action against the neighboring town of Italy, Yates County, where the company wants to build 17 turbines. That town's board voted in October to reject the Ecogen project.
Turbines in the two towns would be 415 feet high and could generate up to 76 megawatts of electricity.
$3.7M loan earmarked to power wind hub
Confident that the large wind-farm projects pending in Ohio will win state approval, Hardin County officials say they have positioned their region to be the center of it all.
Hardin County commissioners and the Ohio Department of Development announced yesterday that a $3.7 million stimulus loan will help pay for a distribution center for massive wind-turbine parts expected to roll into Ohio.
The State Controlling Board still must approve the loan, which eventually will be forgiven if certain conditions are met.
The hub will be built along short-line railroad tracks just outside the village of Dunkirk near Rt. 81, about 75 miles northwest of Columbus.
The developer, American Rail Center and its owner, James Jacobs, will pay for the remainder of the $4.9 million project. Officials are promising 25 permanent jobs at first, with the expectation of more in later phases.
Four wind-farm applications are pending with the Ohio Power Siting Board. Two of them are planned for Hardin County, including what would be by far the largest, with a projected 200 turbines spread across 20,000 acres.
Wind turbines can be nearly 500 feet tall. Having facilities that can handle the transport of the large and heavy components is critical, said Tim Mayly, Hardin County's coordinator of renewable energy.
At first, the hub will serve as a distribution center, where the turbine parts will come in by rail and then be loaded onto tractor-trailers and trucked to the wind farms, Mayly said.
The long-term goal is to manufacture and assemble the parts on site, he said.
The transport of the large steel turbines will require road improvements along certain routes, which have yet to be determined, he added.
Tom Stacy is a Logan County landowner who was among the first western Ohio residents to oppose the plans for wind farms in Ohio. He said he doubts that the 25 jobs promised as part of this package will be permanent because even if the Hardin County projects are approved, those 235 turbines could be built and erected in less than two years.
"This is analogous to building a bridge to nowhere," Stacy said. "If the state wants to build a bridge with $3.7 million, they should consider building a bridge to a balanced budget and lower tax rates for all industries, businesses and residents."
But John Hohn, vice president of economic development for the Hardin County Chamber & Business Alliance, said the loan deal positions the county as a leader in wind energy.
Hardin County commissioners and the Ohio Department of Development announced yesterday that a $3.7 million stimulus loan will help pay for a distribution center for massive wind-turbine parts expected to roll into Ohio.
The State Controlling Board still must approve the loan, which eventually will be forgiven if certain conditions are met.
The hub will be built along short-line railroad tracks just outside the village of Dunkirk near Rt. 81, about 75 miles northwest of Columbus.
The developer, American Rail Center and its owner, James Jacobs, will pay for the remainder of the $4.9 million project. Officials are promising 25 permanent jobs at first, with the expectation of more in later phases.
Four wind-farm applications are pending with the Ohio Power Siting Board. Two of them are planned for Hardin County, including what would be by far the largest, with a projected 200 turbines spread across 20,000 acres.
Wind turbines can be nearly 500 feet tall. Having facilities that can handle the transport of the large and heavy components is critical, said Tim Mayly, Hardin County's coordinator of renewable energy.
At first, the hub will serve as a distribution center, where the turbine parts will come in by rail and then be loaded onto tractor-trailers and trucked to the wind farms, Mayly said.
The long-term goal is to manufacture and assemble the parts on site, he said.
The transport of the large steel turbines will require road improvements along certain routes, which have yet to be determined, he added.
Tom Stacy is a Logan County landowner who was among the first western Ohio residents to oppose the plans for wind farms in Ohio. He said he doubts that the 25 jobs promised as part of this package will be permanent because even if the Hardin County projects are approved, those 235 turbines could be built and erected in less than two years.
"This is analogous to building a bridge to nowhere," Stacy said. "If the state wants to build a bridge with $3.7 million, they should consider building a bridge to a balanced budget and lower tax rates for all industries, businesses and residents."
But John Hohn, vice president of economic development for the Hardin County Chamber & Business Alliance, said the loan deal positions the county as a leader in wind energy.
Thursday, December 10, 2009
Wind-farm law irks new officials
HAMMOND — Future municipal officers of the town of Hammond are shaking their heads about the outgoing Town Council's decision to adopt a law regulating commercial wind farms, saying the board knew that the Hammond voting public was not comfortable with it.
Ronald W. Bertram, who will take over the supervisor position from Janie G. Hollister, and Dr. James R. Tague, who will fill one of two expiring council seats, said the development was disturbing.
"I'm a little disappointed," Mr. Bertram said. "The voting public expressed a view of not being happy with the law as it is. I thought we'd be taking a look at it, and would come up with a compromise that was more acceptable to everyone."
The incoming supervisor said that once the new board takes office, it may have to seek legal counsel on how best to deal with the new law.
"I think the law, in its present form, is a good starting point. But it doesn't cover all of the issues that have been raised," Mr. Bertram said. "I would assume the law could be amended. Until I'm in office, and can seek legal counsel, I honestly don't know what the best course of action is. We will be happy to seek legal advice whether to repeal it or to amend it, and keep working on it."
Concerned Residents of Hammond already has filed a lawsuit, on Tuesday in state Supreme Court. The lawsuit cites State Environmental Quality Review Act violations, as well as violations of the Open Meetings Law and conflicts of interest. Plaintiffs are Pamela Winchester, James W. Brown, Roseanne E. Whittier, William C. Tanner and Christopher J. McRoberts.
The lawsuit cites the Hammond Town Council, including Mrs. Hollister and councilmen Ronald E. Tulley II, James C. Pitcher, Russell Stewart and James E. Langtry, and Code Enforcement Officer James R. Gleason.
Dr. Tague echoed the sentiments of Mr. Bertram, saying he feels the board's decision only hurts the town.
"My big feeling is that they knew the voting population did not approve of the wind law in its present state. I felt that we would be given the opportunity to work on trying to write a wind law that was appropriate. Because of their actions, it hurts the town of Hammond," Dr. Tague said. "It's why we were elected. They knew that, and went ahead anyway. It's an extremely self-serving action."
The Town Council will hold its final regularly scheduled meeting of 2009 at 7:30 p.m. Monday at the town offices.
Ronald W. Bertram, who will take over the supervisor position from Janie G. Hollister, and Dr. James R. Tague, who will fill one of two expiring council seats, said the development was disturbing.
"I'm a little disappointed," Mr. Bertram said. "The voting public expressed a view of not being happy with the law as it is. I thought we'd be taking a look at it, and would come up with a compromise that was more acceptable to everyone."
The incoming supervisor said that once the new board takes office, it may have to seek legal counsel on how best to deal with the new law.
"I think the law, in its present form, is a good starting point. But it doesn't cover all of the issues that have been raised," Mr. Bertram said. "I would assume the law could be amended. Until I'm in office, and can seek legal counsel, I honestly don't know what the best course of action is. We will be happy to seek legal advice whether to repeal it or to amend it, and keep working on it."
Concerned Residents of Hammond already has filed a lawsuit, on Tuesday in state Supreme Court. The lawsuit cites State Environmental Quality Review Act violations, as well as violations of the Open Meetings Law and conflicts of interest. Plaintiffs are Pamela Winchester, James W. Brown, Roseanne E. Whittier, William C. Tanner and Christopher J. McRoberts.
The lawsuit cites the Hammond Town Council, including Mrs. Hollister and councilmen Ronald E. Tulley II, James C. Pitcher, Russell Stewart and James E. Langtry, and Code Enforcement Officer James R. Gleason.
Dr. Tague echoed the sentiments of Mr. Bertram, saying he feels the board's decision only hurts the town.
"My big feeling is that they knew the voting population did not approve of the wind law in its present state. I felt that we would be given the opportunity to work on trying to write a wind law that was appropriate. Because of their actions, it hurts the town of Hammond," Dr. Tague said. "It's why we were elected. They knew that, and went ahead anyway. It's an extremely self-serving action."
The Town Council will hold its final regularly scheduled meeting of 2009 at 7:30 p.m. Monday at the town offices.
Wind farm deal pares tax income
The fine print of the novel payment-in-lieu-of-taxes agreement proposed for Galloo Island Wind Farm gives the developer stability in tax payments over 20 years, making it easier to attract investors.
But the bottom line means about $5.3 million less in taxes for the coffers of the town of Hounsfield, Sackets Harbor Central School District and Jefferson County.
The three taxing jurisdictions will receive base payments totaling about $54.7 million over the term of the proposed PILOT. If a normal 15-year PILOT were applied with five years of full taxation afterward, the jurisdictions would net about $60 million.
To ensure development, having a set amount in tax payments for the entire investment period "would be a big key" to attracting investors, William J. Walsh, director of the Joseph I. Lubin School of Accounting at the Whitman School of Management at Syracuse University.
"In New York, we have very, very high property taxes to begin with," he said. "If you combine that incentive — the ideal location for wind turbines — with the reduced taxes, and say, 'We'll match the low property taxes in other places,' that's an incentive that has worked in the past."
A standard PILOT agreement is 15 years and allows companies to pay in steps toward its full taxation. There are five years at 25 percent of full taxation, five years at 50 percent and five at 75 percent. Those payments fluctuate based on the tax rates in each jurisdiction, adding uncertainty for investors.
Granting the wind farm isn't the question — a project that size is entitled to a standard PILOT under the state's general municipal law. But the variations the proposed PILOT includes ensure the wind farm's financial feasibility by adding stability over the developer's 20-year investment term.
The proposed PILOT would last 20 years, while a standard PILOT lasts 15. And a standard PILOT divides the payments based on the proportional distribution of property taxes among the county, town of Hounsfield and Sackets Harbor Central School District. But under the proposed PILOT, the money would be divided with 15 percent going to the town, 50 percent to the school and 35 percent to the county.
In 2009, Hounsfield residents paid about 6.7 percent of their taxes to the town, 58.8 percent to the school and 34.6 percent to the county.
Estimates show that during the 20 years of the proposed PILOT, the town will collect about $8.2 million, the school will get $27.4 million and the county will gather about $19.2 million. The combined standard 15-year PILOT plus five years at full taxation would bring about $4 million to the town, $35.3 million to the school and $20.8 million to the county.
Under an estimated assessment of $400 million using 2010 rolls, the development would pay about $4.8 million in property taxes.
"The theory is that in order to encourage development, you give the developers a break from paying property taxes," Mr. Walsh, accounting professor, said. "If you give the upfront break to encourage development, the county may get more than its money back over a period of time."
The lost property taxes can be offset by more jobs — and therefore, income and taxes — in a region or high sales tax earnings from a development, he said.
The proposed PILOT covers just the turbines and infrastructure on Galloo Island plus the underwater transmission line that would inside the town of Hounsfield. The rest of the 50.6-mile line will pay full property taxes, but ask for a sale-leaseback agreement with JCIDA for a break on sales and mortgage recording taxes.
Representatives of Galloo Island Wind Farm developer Upstate NY Power Corp. and the Jefferson County Industrial Development Agency told county legislators Nov. 24 that without a PILOT, the project would not be built.
"They'll simply take their money and go away," JCIDA Chief Executive Officer Donald C. Alexander said. "Without the PILOT, we'll lose all the money."
Across the state, wind farm PILOTs have been based on a payment per megawatt of installed capacity. The payments usually range from about $6,000 to $8,000 per megawatt.
Under the proposed Galloo Island PILOT, Upstate NY Power would make a base payment of $8,500 per megawatt. On a 252-megawatt project, that totals $2.14 million. That increases 2.5 percent each year. But the developer would also pay a supplemental amount if wholesale electric power rates reach certain thresholds.
The supplemental payments would add $107,100 if the average annual price of power in the region exceeded $75 per megawatt, increase $214,200 if the average price exceeded $100 and add $321,300 if the price exceeded $125 per megawatt.
During development of the PILOT, JCIDA consultant Mark E. Quallen said projections for the next 15 years showed the prices could regularly beat the threshold, creating additional PILOT revenue.
Other IDAs are studying the Galloo Island PILOT.
"This is the richest PILOT they have encountered," Mr. Alexander said. "It is being used as the example in two or three other areas of the state."
The proposed PILOT would stretch over 20 years because that is the reported length of financing for the project. In year 21, the project enters the tax rolls.
"The project will be viable on its own to pay full taxes without paying on the large debt load," Mr. Alexander said.
If the county approves the departure from the standard PILOT, the JCIDA board will vote on the measure. But the negotiations on issues that could be related to the final PILOT agreement will continue. The JCIDA board will later approve the final agreement, but only if Upstate NY Power, JCIDA and taxing jurisdictions hammer out a decommissioning agreement, project development agreement and other issues.
"The IDA board will vote again on the final PILOT," Mr. Alexander said. "But we can only go so far without an enabling resolution."
But the bottom line means about $5.3 million less in taxes for the coffers of the town of Hounsfield, Sackets Harbor Central School District and Jefferson County.
The three taxing jurisdictions will receive base payments totaling about $54.7 million over the term of the proposed PILOT. If a normal 15-year PILOT were applied with five years of full taxation afterward, the jurisdictions would net about $60 million.
To ensure development, having a set amount in tax payments for the entire investment period "would be a big key" to attracting investors, William J. Walsh, director of the Joseph I. Lubin School of Accounting at the Whitman School of Management at Syracuse University.
"In New York, we have very, very high property taxes to begin with," he said. "If you combine that incentive — the ideal location for wind turbines — with the reduced taxes, and say, 'We'll match the low property taxes in other places,' that's an incentive that has worked in the past."
A standard PILOT agreement is 15 years and allows companies to pay in steps toward its full taxation. There are five years at 25 percent of full taxation, five years at 50 percent and five at 75 percent. Those payments fluctuate based on the tax rates in each jurisdiction, adding uncertainty for investors.
Granting the wind farm isn't the question — a project that size is entitled to a standard PILOT under the state's general municipal law. But the variations the proposed PILOT includes ensure the wind farm's financial feasibility by adding stability over the developer's 20-year investment term.
The proposed PILOT would last 20 years, while a standard PILOT lasts 15. And a standard PILOT divides the payments based on the proportional distribution of property taxes among the county, town of Hounsfield and Sackets Harbor Central School District. But under the proposed PILOT, the money would be divided with 15 percent going to the town, 50 percent to the school and 35 percent to the county.
In 2009, Hounsfield residents paid about 6.7 percent of their taxes to the town, 58.8 percent to the school and 34.6 percent to the county.
Estimates show that during the 20 years of the proposed PILOT, the town will collect about $8.2 million, the school will get $27.4 million and the county will gather about $19.2 million. The combined standard 15-year PILOT plus five years at full taxation would bring about $4 million to the town, $35.3 million to the school and $20.8 million to the county.
Under an estimated assessment of $400 million using 2010 rolls, the development would pay about $4.8 million in property taxes.
"The theory is that in order to encourage development, you give the developers a break from paying property taxes," Mr. Walsh, accounting professor, said. "If you give the upfront break to encourage development, the county may get more than its money back over a period of time."
The lost property taxes can be offset by more jobs — and therefore, income and taxes — in a region or high sales tax earnings from a development, he said.
The proposed PILOT covers just the turbines and infrastructure on Galloo Island plus the underwater transmission line that would inside the town of Hounsfield. The rest of the 50.6-mile line will pay full property taxes, but ask for a sale-leaseback agreement with JCIDA for a break on sales and mortgage recording taxes.
Representatives of Galloo Island Wind Farm developer Upstate NY Power Corp. and the Jefferson County Industrial Development Agency told county legislators Nov. 24 that without a PILOT, the project would not be built.
"They'll simply take their money and go away," JCIDA Chief Executive Officer Donald C. Alexander said. "Without the PILOT, we'll lose all the money."
Across the state, wind farm PILOTs have been based on a payment per megawatt of installed capacity. The payments usually range from about $6,000 to $8,000 per megawatt.
Under the proposed Galloo Island PILOT, Upstate NY Power would make a base payment of $8,500 per megawatt. On a 252-megawatt project, that totals $2.14 million. That increases 2.5 percent each year. But the developer would also pay a supplemental amount if wholesale electric power rates reach certain thresholds.
The supplemental payments would add $107,100 if the average annual price of power in the region exceeded $75 per megawatt, increase $214,200 if the average price exceeded $100 and add $321,300 if the price exceeded $125 per megawatt.
During development of the PILOT, JCIDA consultant Mark E. Quallen said projections for the next 15 years showed the prices could regularly beat the threshold, creating additional PILOT revenue.
Other IDAs are studying the Galloo Island PILOT.
"This is the richest PILOT they have encountered," Mr. Alexander said. "It is being used as the example in two or three other areas of the state."
The proposed PILOT would stretch over 20 years because that is the reported length of financing for the project. In year 21, the project enters the tax rolls.
"The project will be viable on its own to pay full taxes without paying on the large debt load," Mr. Alexander said.
If the county approves the departure from the standard PILOT, the JCIDA board will vote on the measure. But the negotiations on issues that could be related to the final PILOT agreement will continue. The JCIDA board will later approve the final agreement, but only if Upstate NY Power, JCIDA and taxing jurisdictions hammer out a decommissioning agreement, project development agreement and other issues.
"The IDA board will vote again on the final PILOT," Mr. Alexander said. "But we can only go so far without an enabling resolution."
United Technology flies to the rescue of Clipper Windpower
United Technology Corporation, the maker of Sikorsky helicopters, has flown to the rescue of Clipper Windpower and secured the future of the giant Britannia turbine being developed in the north-east of England.
UTC, which also makes Pratt & Witney aero engines, has spent £126m buying a 49.5% stake in loss-making Clipper, which is listed on London's junior Aim market but has most of its sales in the US.
Clipper recently won a grant from energy secretary Ed Miliband to build a factory to construct the 70 metre (230ft) Britannia mega-blades for use in the North Sea wind market but, like Vestas and other manufacturers, has been struggling with cash shortages.
Clipper more than doubled its sales but made a net loss of $120.2m (£75m) in the first six months of the year. Management has made clear in recent months it is searching for a new backer to secure the company's long-term future.
Shares in Clipper soared nearly 20% this morning, to 174p, amid relief and excitement about UTC seen by many as the strongest possible partner given its $64bn (£39.3bn) capitalisation. UTC, based in Hertford, New York, has a fuel-cell business but no other real investment or track record in wind or other renewable energy.
Douglas Pertz, Clipper's chief executive, described the UTC investment as "transformational" and said it would give a platform for expansion. "Our relationship with UTC will enable Clipper to access UTC's support and expertise in areas of manufacturing, product quality and other industrial processes, while providing Clipper with equity financing to deliver our longer-term strategic goals," he said.
"Following this transaction, we believe there is a tremendous opportunity for Clipper to grow its market share and take its world-class technology to new markets."
But not everyone was convinced the future is bright enough yet for Clipper. Analysts at investment bank Piper Jaffray warned: "Today's placing clearly gives the company a cash buffer given that it remains loss-making – the company had a $103m cash burn in the first half of this year. However, technology issues remain and reliance on customer prepayments remains a key risk to the business model."
UTC, which also makes Pratt & Witney aero engines, has spent £126m buying a 49.5% stake in loss-making Clipper, which is listed on London's junior Aim market but has most of its sales in the US.
Clipper recently won a grant from energy secretary Ed Miliband to build a factory to construct the 70 metre (230ft) Britannia mega-blades for use in the North Sea wind market but, like Vestas and other manufacturers, has been struggling with cash shortages.
Clipper more than doubled its sales but made a net loss of $120.2m (£75m) in the first six months of the year. Management has made clear in recent months it is searching for a new backer to secure the company's long-term future.
Shares in Clipper soared nearly 20% this morning, to 174p, amid relief and excitement about UTC seen by many as the strongest possible partner given its $64bn (£39.3bn) capitalisation. UTC, based in Hertford, New York, has a fuel-cell business but no other real investment or track record in wind or other renewable energy.
Douglas Pertz, Clipper's chief executive, described the UTC investment as "transformational" and said it would give a platform for expansion. "Our relationship with UTC will enable Clipper to access UTC's support and expertise in areas of manufacturing, product quality and other industrial processes, while providing Clipper with equity financing to deliver our longer-term strategic goals," he said.
"Following this transaction, we believe there is a tremendous opportunity for Clipper to grow its market share and take its world-class technology to new markets."
But not everyone was convinced the future is bright enough yet for Clipper. Analysts at investment bank Piper Jaffray warned: "Today's placing clearly gives the company a cash buffer given that it remains loss-making – the company had a $103m cash burn in the first half of this year. However, technology issues remain and reliance on customer prepayments remains a key risk to the business model."
Wednesday, December 09, 2009
Court halts wind farm action
Prattsburgh
A state Supreme Court restraining order will delay any action on a wind farm dispute in the town of Prattsburgh for at least a week.
Prattsburgh Town Board members were ready Monday to respond to a lawsuit filed by Ecogen on Nov. 16. In the suit, Ecogen alleges the board, specifically councilmen Steve Kula and Chuck Shick, have prevented the developer from moving ahead with a 16-turbine project in the town.
But instead, the board went into executive session after being notified a temporary restraining order had been signed by late Monday afternoon at the request of attorneys for Kula and Shick.
Shick and Kula say they need separate lawyers because they are individually named in the lawsuit. The Town Board is expected to be represented in the lawsuit by town Attorney John Leyden.
The order, signed by state Supreme Court Justice Stephen K. Lindley, in Monroe County, prevents the board from voting on a proposed settlement with Ecogen until further order of the court. The board can ask for more time to deal with Ecogen, according to the order.
The town has until Monday to reply to the preliminary injunction, with the next court date set for Tuesday.
The Prattsburgh board’s concerns about wind farms began last February, when residents in the nearby town of Cohocton complained noise from the operating First Wind turbines sounded like jet engines.
As a result of the nearby noise problem, the board briefly considered a moratorium in April to study the issue, but backed off by a 3-2 vote after Ecogen threatened to sue. Shick and Kula disagreed with the majority of the board and have continued to press for more information on potential noise and safety issues caused by the massive turbines.
Both councilmen repeatedly said the current Ecogen project would be exempt from any new action by the board.
In October, a dispute between town officials and the developer arose over a road use agreement required to construct the turbines. Charging Ecogen had changed the original agreement, the board unanimously agreed to hire an independent engineer to resolve the issue.
Kula said the individual lawsuits are baseless.
“I’ve said this publicly in the past, and I’ll say it again,” Kula said. “I’m willing to settle both lawsuits, both lawsuits, if Ecogen will just meet all the (state Department of Environmental Conservation’s) requirements on noise.”
Also, the recent election of Al Wordingham as supervisor and Anneke Radin-Snaith as councilman is reportedly another reason why Ecogen launched what appears to be a pre-emptive strike against the future town board. Both favor strict regulations for wind turbines and are replacing incumbents who support development.
After the election, Ecogen filed its lawsuit, essentially looking for permission from the court to move head with its development without any further delays.
Leyden said comments made during the campaign about setting up a moratorium on any wind development in the town may have alarmed Ecogen, which has been working on the project for more than eight years.
Ecogen’s lawsuit against the Prattsburgh town board is the second in a month.
In late October, Ecogen sued the neighboring Town of Italy, in Yates County, after board members rejected a plan to build 17 turbines and enacted a moratorium on development.
The Prattsburgh and Italy plans are part of the same project.
The Prattsburgh board will meet at 7 p.m. Monday to discuss the restraining order. The regular board meeting is set for Tuesday night.
A state Supreme Court restraining order will delay any action on a wind farm dispute in the town of Prattsburgh for at least a week.
Prattsburgh Town Board members were ready Monday to respond to a lawsuit filed by Ecogen on Nov. 16. In the suit, Ecogen alleges the board, specifically councilmen Steve Kula and Chuck Shick, have prevented the developer from moving ahead with a 16-turbine project in the town.
But instead, the board went into executive session after being notified a temporary restraining order had been signed by late Monday afternoon at the request of attorneys for Kula and Shick.
Shick and Kula say they need separate lawyers because they are individually named in the lawsuit. The Town Board is expected to be represented in the lawsuit by town Attorney John Leyden.
The order, signed by state Supreme Court Justice Stephen K. Lindley, in Monroe County, prevents the board from voting on a proposed settlement with Ecogen until further order of the court. The board can ask for more time to deal with Ecogen, according to the order.
The town has until Monday to reply to the preliminary injunction, with the next court date set for Tuesday.
The Prattsburgh board’s concerns about wind farms began last February, when residents in the nearby town of Cohocton complained noise from the operating First Wind turbines sounded like jet engines.
As a result of the nearby noise problem, the board briefly considered a moratorium in April to study the issue, but backed off by a 3-2 vote after Ecogen threatened to sue. Shick and Kula disagreed with the majority of the board and have continued to press for more information on potential noise and safety issues caused by the massive turbines.
Both councilmen repeatedly said the current Ecogen project would be exempt from any new action by the board.
In October, a dispute between town officials and the developer arose over a road use agreement required to construct the turbines. Charging Ecogen had changed the original agreement, the board unanimously agreed to hire an independent engineer to resolve the issue.
Kula said the individual lawsuits are baseless.
“I’ve said this publicly in the past, and I’ll say it again,” Kula said. “I’m willing to settle both lawsuits, both lawsuits, if Ecogen will just meet all the (state Department of Environmental Conservation’s) requirements on noise.”
Also, the recent election of Al Wordingham as supervisor and Anneke Radin-Snaith as councilman is reportedly another reason why Ecogen launched what appears to be a pre-emptive strike against the future town board. Both favor strict regulations for wind turbines and are replacing incumbents who support development.
After the election, Ecogen filed its lawsuit, essentially looking for permission from the court to move head with its development without any further delays.
Leyden said comments made during the campaign about setting up a moratorium on any wind development in the town may have alarmed Ecogen, which has been working on the project for more than eight years.
Ecogen’s lawsuit against the Prattsburgh town board is the second in a month.
In late October, Ecogen sued the neighboring Town of Italy, in Yates County, after board members rejected a plan to build 17 turbines and enacted a moratorium on development.
The Prattsburgh and Italy plans are part of the same project.
The Prattsburgh board will meet at 7 p.m. Monday to discuss the restraining order. The regular board meeting is set for Tuesday night.
Hammond Wind Law Challenged in Court
HAMMOND — The anti-wind farm group Concerned Residents of Hammond has quickly challenged the legality of the wind law a lame-duck Hammond Town Council passed Monday. The decision to pass the law brought a swift response in a lawsuit filed Tuesday afternoon in the St. Lawrence County clerk’s office, Canton, by the residents group.
“We fully expected this action by the present board,” said Mary D. Hamilton, the group’s president. “We were hoping the outgoing supervisor and councilmen would have better understood the November election results. If this board truly had the best interests of the residents of Hammond in mind, they would have allowed the incoming board members the opportunity for input on this issue and would have ceased this process and cooperated to allow that to happen.”
The state Supreme Court lawsuit challenges the Hammond Town Council’s completion of the state Environmental Quality Review assessment, which was completed in its entirety at a special meeting Monday. It also cites conflicts of interest, saying council members who didn’t vote nevertheless participated in the environmental assessment, and accuses the council of several violations of the state Open Meetings Law, including failing to provide copies of the law, conducting town business before meetings were convened and material alterations to the law after the public hearing was completed.
The suit seeks a temporary restraining order and an order of preliminary injunction for Local Law No. 1. Plaintiffs are Pamela Winchester, James W. Brown, Roseanne E. Whittier, William C. Tanner and Christopher J. McRoberts. The lawsuit cites as defendants the Hammond Town Council, including Supervisor Janie G. Hollister and councilmen Ronald E. Tulley II, James C. Pitcher, Russell Stewart and James E. Langtry, and Code Enforcement Officer James R. Gleason.
The wind law was passed 3-0 Monday at the special meeting, supported by Mrs. Hollister, Mr. Tulley and Mr. Langtry. Local Law No. 2, which exempts wind towers from the town’s site plan and subdivision review, also was passed by an identical vote. Mr. Pitcher and Mr. Stewart, though present, recused themselves from the vote, having already signed land leases with a wind company.
“The decision of the outgoing Town Board to push through this law at the eleventh hour suggests that Iberdrola, Atlantic Wind or some other commercial wind company is likely waiting in the wings to seek a permit as soon as the law is passed,” reads the lawsuit. “Why else would the current Town Board take this action with three weeks remaining in the year and its term of office?” Furthermore, the lawsuit states, “In addition, the Wind Law in its current form does not adequately protect the environment or the health and safety of the Hammond community.”
“The Town itself identified numerous areas of potential environmental concerns which are memorialized in section 4 of the Wind Law, including drainage problems, noise and light pollution, and electromagnetic interference with communication signals. This demonstrates that the Town itself acknowledges that there are significant potential dangers. However, the Wind Law provides no standards to address many of these problems.”
Mrs. Hamilton defended the group’s quick decision to file its action. “They ramrodded this through before the end of the year,” she said. “Who knows what’s next? They still have three more weeks. We had no choice.”
The Town Council will hold its final meeting of 2009 at 7:30 p.m. Monday in the Hammond town offices.
“We fully expected this action by the present board,” said Mary D. Hamilton, the group’s president. “We were hoping the outgoing supervisor and councilmen would have better understood the November election results. If this board truly had the best interests of the residents of Hammond in mind, they would have allowed the incoming board members the opportunity for input on this issue and would have ceased this process and cooperated to allow that to happen.”
The state Supreme Court lawsuit challenges the Hammond Town Council’s completion of the state Environmental Quality Review assessment, which was completed in its entirety at a special meeting Monday. It also cites conflicts of interest, saying council members who didn’t vote nevertheless participated in the environmental assessment, and accuses the council of several violations of the state Open Meetings Law, including failing to provide copies of the law, conducting town business before meetings were convened and material alterations to the law after the public hearing was completed.
The suit seeks a temporary restraining order and an order of preliminary injunction for Local Law No. 1. Plaintiffs are Pamela Winchester, James W. Brown, Roseanne E. Whittier, William C. Tanner and Christopher J. McRoberts. The lawsuit cites as defendants the Hammond Town Council, including Supervisor Janie G. Hollister and councilmen Ronald E. Tulley II, James C. Pitcher, Russell Stewart and James E. Langtry, and Code Enforcement Officer James R. Gleason.
The wind law was passed 3-0 Monday at the special meeting, supported by Mrs. Hollister, Mr. Tulley and Mr. Langtry. Local Law No. 2, which exempts wind towers from the town’s site plan and subdivision review, also was passed by an identical vote. Mr. Pitcher and Mr. Stewart, though present, recused themselves from the vote, having already signed land leases with a wind company.
“The decision of the outgoing Town Board to push through this law at the eleventh hour suggests that Iberdrola, Atlantic Wind or some other commercial wind company is likely waiting in the wings to seek a permit as soon as the law is passed,” reads the lawsuit. “Why else would the current Town Board take this action with three weeks remaining in the year and its term of office?” Furthermore, the lawsuit states, “In addition, the Wind Law in its current form does not adequately protect the environment or the health and safety of the Hammond community.”
“The Town itself identified numerous areas of potential environmental concerns which are memorialized in section 4 of the Wind Law, including drainage problems, noise and light pollution, and electromagnetic interference with communication signals. This demonstrates that the Town itself acknowledges that there are significant potential dangers. However, the Wind Law provides no standards to address many of these problems.”
Mrs. Hamilton defended the group’s quick decision to file its action. “They ramrodded this through before the end of the year,” she said. “Who knows what’s next? They still have three more weeks. We had no choice.”
The Town Council will hold its final meeting of 2009 at 7:30 p.m. Monday in the Hammond town offices.
Animal Welfare Institute, et.al. v. Beech Ridge Energy LLC: District Court opinion
Federal district court Judge Roger Titus of the U.S. District Court for the District of Maryland issued a comprehensive ruling that an industrial wind energy facility in Greenbrier County, West Virginia will kill and injure endangered Indiana bats, in violation of the Endangered Species Act (ESA). The court concluded that “the development of wind energy can and should be encouraged, but wind turbines must be good neighbors.” This is the first federal court ruling in the country finding a wind power project in violation of federal environmental law. Judge Titus' opinion and order on this matter can be downloaded by clicking the links at the bottom of this page.
Opinion%5B1%5D.pdf
Opinion%5B1%5D.pdf
First Wind offers plan for second Maui site
Newton, Mass.-based First Wind is planning a second wind farm on the slopes of Kaheawa in the West Maui Mountains.
First Wind has submitted an environmental impact statement to the state for approval of a 21-megawatt wind farm on about 135 acres next to its existing one at Kaheawa Pastures above Maalaea.
The first project, built in the summer of 2006, is a 30-megawatt project using 20 General Electric turbines (generating 1.5 megawatts each). Together, Kaheawa I and II would generate 51 megawatts of wind power.
"Again, we're committed to helping Hawaii decrease its reliance on fossil fuels," said First Wind spokeswoman Noe Kalipi. "Maui has a robust wind resource, and we'd like to utilize that to provide clean energy."
The company hopes to get Kaheawa II up and running next year, said Kalipi, but must obtain permits and complete a habitat conservation plan.
The conservation plan addresses how First Wind would mitigate the wind farm's impact on three threatened or endangered bird and one bat species.
Kaheawa II plans to install 14 General Electric wind turbines (generating 1.5 megawatts each), plus build an electrical substation connecting to the Maui Electric Co. transmission system.
A purchase power agreement is being negotiated with MECO.
The project is expected to provide an estimated 70,000 megawatt-hours of electricity a year to MECO, enough to power about 7,700 average Maui homes (using 750 kilowatt-hours per month).
Like Kaheawa I, Kaheawa II will also come with a battery energy storage system, which would allow excess power to be stored overnight for use during peak periods.
The life span of the wind farm is about 20 years.
First Wind is also hoping to break ground on a 30-megawatt wind farm in Kahuku on Oahu's North Shore next spring.
The company has a purchase-power agreement in place with Hawaiian Electric Co. awaiting approval from the state Public Utilities Commission.
The Big Island is home to three wind farms at Hawi, Kohala and South Point. On Maui another wind farm is in the works at Ulupalakua Ranch.
First Wind has submitted an environmental impact statement to the state for approval of a 21-megawatt wind farm on about 135 acres next to its existing one at Kaheawa Pastures above Maalaea.
The first project, built in the summer of 2006, is a 30-megawatt project using 20 General Electric turbines (generating 1.5 megawatts each). Together, Kaheawa I and II would generate 51 megawatts of wind power.
"Again, we're committed to helping Hawaii decrease its reliance on fossil fuels," said First Wind spokeswoman Noe Kalipi. "Maui has a robust wind resource, and we'd like to utilize that to provide clean energy."
The company hopes to get Kaheawa II up and running next year, said Kalipi, but must obtain permits and complete a habitat conservation plan.
The conservation plan addresses how First Wind would mitigate the wind farm's impact on three threatened or endangered bird and one bat species.
Kaheawa II plans to install 14 General Electric wind turbines (generating 1.5 megawatts each), plus build an electrical substation connecting to the Maui Electric Co. transmission system.
A purchase power agreement is being negotiated with MECO.
The project is expected to provide an estimated 70,000 megawatt-hours of electricity a year to MECO, enough to power about 7,700 average Maui homes (using 750 kilowatt-hours per month).
Like Kaheawa I, Kaheawa II will also come with a battery energy storage system, which would allow excess power to be stored overnight for use during peak periods.
The life span of the wind farm is about 20 years.
First Wind is also hoping to break ground on a 30-megawatt wind farm in Kahuku on Oahu's North Shore next spring.
The company has a purchase-power agreement in place with Hawaiian Electric Co. awaiting approval from the state Public Utilities Commission.
The Big Island is home to three wind farms at Hawi, Kohala and South Point. On Maui another wind farm is in the works at Ulupalakua Ranch.
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