Most people
know very little about the true economics in the solar and wind industry. Even
less understand the cryptic disclosures in an SEC filing of reports from FERC.
Yet the financial inventors are brilliant in concealing the simple business
model that is supposed to generate earning from real economic activity. Let’s be
generous and report on the public relations announcement, 5
Slides That Show Why SunEdison Bought First Wind. Reading such glowing
projections might attract investors into the SunEdison,
TerraForm Power Up Solar ETFs.
“SunEdison is among the largest holdings in
both the Guggenheim Solar ETFs (TAN ) and the Market Vectors Solar ETF (KWT ),
which climbed 5.1% and 3.8% respectively.
These two solar ETFs are alone in giving
meaningful weight to TerraForm, SunEdison’s partner
“yieldco” that went public in July, according to
research firm XTF.”
Are you
ready for some government and private sector newspeak? Note the following
appears on the website of NREL - a national laboratory of the U.S. Department of
Energy, Office of Energy Efficiency and Renewable Energy, operated by the
Alliance for Sustainable Energy, LLC. - A
Deeper Look into Yieldco Structuring.
“A yieldco is a dividend growth-oriented
public company, created by a parent company (e.g., SunEdison), that bundles
renewable and/or conventional long-term contracted operating assets in order to
generate predictable cash flows. Yieldcos allocate cash available for
distribution (CAFD) each year or quarter to shareholders in the form of
dividends. This investment can be attractive to shareholders because they can
expect low-risk returns (or yields) that are projected to increase over
time.”
Surely you
got that these “yieldco” are even better than derivatives,
RIGHT???
Before you
call your broker, review a recent edition of the BATR RealPolitik Newsletter on
the topic - Another
Green Energy Fraud. When Bloomberg announces that SunEdison,
TerraForm to Acquire First Wind for $2.4 Billion, they are not disclosing
the entire story.
“Expected to close in the first
quarter, the purchase will consist of a $1.9 billion upfront payment and $510
million dependent on First Wind completing backlog projects.
TerraForm will add 521 megawatts of First
Wind projects to its portfolio under the deal, with 1.6 gigawatts of projects
expected to be developed by SunEdison and dropped down into TerraForm in 2016
and 2017, the companies said in the statement.”
The sorted history of First
Wind strikes a record of questionable financial dealing, concealed debt
obligations, flipping LLC ownership and holding company discrepancies. It came
as no surprise that First Winds bizarre attempt to sell off their self
proclaimed core projects fell flat. A local Bangor Maine newspaper has taken the
lead on real investigative reporting. First
Wind sale means end of $333 million partnership with Emera is but one in a
series of damaging evidence on the shady business practices of First
Wind.
“Ending a partnership challenged twice
before state regulators and in court, Nova Scotia-based Emera has sold its
interest in a $333 million joint venture with First Wind, which was purchased
Monday by a Missouri-based renewable power developer.
Emera announced Monday that it has agreed to
sell its interest in Northeast Wind Partners back to First Wind for $223
million.
The deal would end a legal
challenge to that partnership, which Houlton Water Co. and a group representing
industrial power users argued violated the intent of New England’s deregulation
of its electricity market. But that money may be directed at other power
generation resources in the region after the completion of the larger deal
between First Wind and SunEdison subsidiary TerraForm Power.”
Ask yourself, why would a newly
capitalized company want to acquire a debt ridden albatross like First
Wind? When SunEdison
Spin-Off TerraForm Power Scores Hot IPO came to market, a smell of a Wall
Street bailout using another shell public company reeks. Since First Wind failed
in their own IPO
offering, just maybe a careful examination into the filings of these
companies is warranted.
“TerraForm Power Inc. (NASDAQ: TERP),
another spin-off from SunEdison Inc. (NYSE: SUNE), offered 20.1 million shares
and raised about $500 million in its IPO, valuing the company at around $2.4
billion. SunEdison will retain nearly 95% of the voting power in the company.
The IPO’s underwriters have a 30-day option on another 3 million
shares.”
Next review
the SECURITIES AND EXCHANGE COMMISSION Forum K-8 #001-36542 for TERRAFORM
POWER, INC. and check out the full company description on TERRAFORM
POWER, INC. (TERP) IPO.
Selling
shares of public companies to pension funds for eventual shorting from the house
accounts of underwriting firms is a favorite strategy that if caught, only gets
a slap on the wrist.
The lack of
disclosure of ALL the debt for projects that cannot even satisfy minimum
interest payments must less retiring the actual obligations, is indicative of an
industry that is based upon fraud and uncompetitive costs.
Wind
proponents want you to believe that Wind
Power Forecasting in U.S. Electricity Markets are based upon true figures of
literal production that goes into the grid for actual consumer use. Nothing
could be further from the truth. Sun Edison is no virgin to the mega corporation
ownership game. Having started in 1959 as the Monsanto Electronic Materials
Company, a business unit of Monsanto Company, their SEC
filing is a wealth of information on connections to the usual suspects
behind the renewable energy Wall Street schemes.
Renewal
Energy World explains, SunEdison
Launches Yieldco to Unearth, Leverage Solar Asset Values, and sure sounds
like a lot of financial trickery.
“Here's why SunEdison and the
rest of the industry is so keen to pursue
new finance options. Back in its 3Q13
financial results SunEdison calculated its current business model of
building and selling solar projects yields about $0.74/Watt -- but those assets'
true value could jump as high as $1.97/W if the company can find ways to
enumerate and apply various methods: lower the cost of capital, apply various
underwriting assumptions, and factor in residual value in power purchase
agreements. That's a startling 2.6× increase in potential value creation that
SunEdison thinks it can unlock, and creating a yieldco structure to attract
interest from the broader investor community is a big part of the
answer.”
Birds of a
feather flock together and care nothing about all the fowl kill is a bad deal
for investors and electric rate payers.
James Hall –
December 10, 2014
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