Country can breathe sigh of relief. We’re still stuck with him…

March 4, 2013 by Amy · Comments Off
Filed under: Archive, HB 1365, New Energy Economy 

By William Yeatman and Amy Oliver Cooke

As Coloradans we thought we might have to apologize to the rest of the country if President Barack Obama nominated former one-term Colorado Governor Bill Ritter to head the Energy Department. If the President wanted to make electricity costs skyrocket and the eco-left community happy, Ritter was his guy, but the President didn’t pick him.

Today, the Denver Post’s Allison Sherry broke the news that MIT physicist Ernest Moniz got the nod and the environmental community is none too pleased according to Mother Nature Network:

Despite his dense résumé and desire to cut emissions, however, Moniz can be a polarizing figure in scientific and environmental circles. Few experts deny the value of a scientist as DOE chief, but many fans of renewable energy worry about Moniz’s gusto for natural gas and nuclear power — not to mention his financial ties to the energy industry.

‘We’re concerned that, as energy secretary, Ernest Moniz may take a politically expedient view of harmful fracking and divert resources from solar, geothermal and other renewable energy sources vital to avoiding climate disaster,’ Bill Snape of the Center for Biological Diversity said in a recent press release. ‘We’re also concerned that Moniz would be in a position to delay research into the dangers fracking poses to our air, water and climate.’

And the Washington Post reports:

But over the past couple of weeks, many environmentalists and some prominent renewable energy experts have tried to block the nomination of Moniz because of an MIT report supporting “fracking” — as hydraulic fracturing is commonly known — and because major oil and gas companies, including BP, Shell, ENI and Saudi Aramco, provided as much as $25 million each to the MIT Energy Initiative. Other research money came from a foundation bankrolled by shale gas giant Chesapeake Energy.

‘We would stress to Mr. Moniz that an ‘all of the above’ energy policy only means ‘more of the same,’ and we urge him to leave dangerous nuclear energy and toxic fracking behind while focusing on safe, clean energy sources like wind and solar,’ Sierra Club executive director Michael Brune said in a statement Monday.

The Sierra Club doesn’t have much credibility because financially it was sleeping with the enemy, having taken $26 million from Chesapeake Energy to destroy the market for coal.  One place they enjoyed great success was in Colorado with HB 1365, the fuel switching bill and cornerstone of Ritter’s “New Energy Economy.”

Governor Ritter coined the term New Energy Economy for his signature agenda. In practice, his New Energy Economy entails three policies: (1) a Soviet-style green energy production quota; (2) subsidies for green energy producers; and (3) a mandate for fuel switching from coal to natural gas. Renewable energy is more expensive than conventional energy, and natural gas is twice as expensive as coal in Colorado, so these policies inherently inflated the cost of electricity.

Last month, the Independence Institute published the first ever line item expensing of Ritter’s energy policies, and the results were shocking. In 2012, the New Energy Economy cost Xcel Energy (the state’s largest investor-owned utility) ratepayers $484 million, or 18 percent of retail electricity sales.

This princely sum purchased the equivalent of 402 megawatts of reliable capacity generation. By comparison, Xcel had a surplus generating capacity (beyond its reserve margin) in 2012 of 700 megawatts—almost 75 percent more than the New Energy Economy contribution. Thanks to Governor Ritter’s energy policies, Xcel ratepayers in Colorado last year paid almost half a billion dollars for energy they didn’t need.

In addition to implementing expensive energy policies, Governor Ritter also has experience picking losers in the energy industry. In May 2009, Governor Ritter hand-delivered to Secretary Chu a letter in support of a $300 million loan guarantee for Colorado-based Abound Solar, a thin-filmed solar panel manufacturer. In the letter Ritter claimed Abound would “triple production capacity within 12 months, develop a second manufacturing facility within 18 months and hire an additional 1,000 employees.”

Taxpayer money couldn’t keep Abound afloat, which never reached production capacity. After its solar panels suffered repeated failures, including catching fire, Abound declared bankruptcy in early 2012 leaving taxpayers on the hook for nearly $70 million and even more at the state and local level. A former employee explained, “our solar modules worked so long as you didn’t put them in the sun.”

Abound Solar wasn’t the only pound-foolish Stimulus spending associated with Governor Ritter. During his administration, the Colorado Energy Office’s coffers swelled with almost $33 million in stimulus subsidies for weatherization efforts. According to a recent report by the Colorado Office of State Audits, the Ritter administration failed to even maintain an annual budget for the program. As a result, the audit was unable to demonstrate whether the money had been spent in a cost effective manor. All told, the auditor found that the energy agency could not properly account for almost $127 million in spending during the Ritter administration.

Ritter told the Fort Collins Coloradoan that the scathing audit accusing the agency under his watch of shoddy management practices was not the reason the President passed over him for Energy Secretary.

The former Governor is especially proud of the job creation associated with the New Energy Economy. To be sure, throwing taxpayer money at any industry would create jobs. The problem occurs when the public money spigot runs dry. In this context, an October 22, 2012 top fold, front page headline in the Denver Post is illuminating: “New energy” loses power; A series of setbacks cost over 1,000 jobs and threatens the state’s status in the industry. To put it another way, in the two years since Ritter left office, his New Energy Economy has atrophied in lockstep with the reduction in public funding.

Ritter has taken to proselytizing for the gospel of expensive energy. He founded the Center for the New Energy Economy, the purpose of which is to, “provide policy makers, governors, planners and other decision makers with a road map that will accelerate the nationwide development of a New Energy Economy.” He even brought with him the former head of the beleaguered energy office Tom Plant to work for him as a “policy advisor.”

So far Ritter’s bad energy policy has remained largely within the Centennial State, and, for now, that’s where it will stay. With the choice of Moniz, the rest of the country can breathe a sigh of relief. For Coloradans, we’re still stuck with him.

William Yeatman is the Assistant Director of the Center for Energy and Environment at the Competitive Enterprise Institute and a policy analyst for the Independence Institute in Denver, Colorado. Amy Oliver Cooke is the Director of the Energy Policy Center for the Independence Institute

Solyndra: Is an apology too much to ask?

September 21, 2011 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

Please send out an APB for common decency because it’s gone, along with the $535 million in taxpayer-guaranteed money that the Obama administration wagered on the California-based solar start-up Solyndra. The high-priced, pet green project – the centerpiece of the president’s green jobs initiative – went belly up, and the F.B.I. raided the homes of top executives.

It gets worse. Turns out that Solyndra major investor George Kaiser along with other top executives and board members donated more than $87,000 to propel Barack Obama to the White House. And Kaiser et al were frequent visitors to 1600 Pennsylvania Avenue including March 2009, just one week before the Department of Energy (DOE) approved the ill-fated loan.

It gets worse. With help from the DOE, Solyndra avoided bankruptcy earlier this year, which could have saved taxpayers millions. Despite warnings from the Office of Management and Budget (OMB), the beleaguered solar company was allowed to renegotiate its loan and put taxpayers in a subordinate position.  When the liquidation is said and done, it’s likely that taxpayers won’t get much.

It’s no wonder that Pew Research Center found that 86 percent of Americans are either frustrated or angry with the federal government. Solyndra gives them 535 million more reasons.

You’d think someone would have the common decency to apologize. Don’t hold you’re your breath waiting for one. The reaction from all the players ranges from defensive to offensive, from cavalier to incredible. No responsibility. No display of remorse.

Half a billion dollars of incompetence, crony capitalism and moral corruption and taxpayers can’t get even get an apology, much less an explanation of how Solyndra burned through all that money.

The White House

In 2009 the White House fast tracked the $535 million taxpayer-guaranteed loan to Solyndra, the first “green jobs” loan under the Obama Administration’s American Recovery and Reinvestment Act (ARRA).

On May 26, 2010, President Obama made a much-publicized visit to Solyndra and boasted, “Less than a year ago, we were standing on what was an empty lot. But through the Recovery Act, this company received a loan to expand its operations. This new factory is the result of those loans.”

Today, the lot may not be vacant but the building is, as all 1,100 employees have been laid off.

On September 1, when the White House press corps queried Press Secretary Jay Carney about Solyndra’s bankruptcy, Carney explained “that’s just the way the that business works.”

Two weeks later, Carney suggested that Obama hadn’t been briefed about questions surrounding Solyndra. It stretches the limits of reality to believe that the White House, which was so involved in the approval, now isn’t briefing the President on the Solyndra scandal.

When asked if the president was embarrassed, Carney responded that the administration remained committed to renewable energy. That’s not an answer; it’s a platitude. If the president isn’t embarrassed, he is either not telling the truth or he has no conscience. Neither is particularly attractive.

Congressional Democrats

The reaction from some congressional Democrats who sit on the Committee on Energy and Commerce has been equally cavalier. Michigan Congressman John Dingell said, “I’m still waiting to see something that makes me concerned…”

Green zealot Ed Markey of Massachusetts claimed he’d rather be investigating oil and gas companies and voted against a subpoena to find out what happened to taxpayer money. And Colorado Congresswoman Diana DeGette’s statement tried to implicate the Bush administration.

Office of Management and Budget

The Washington Post reported recently released emails reveal that OMB worried about Solyndra’s finances and how it would impact the 2012 election:

The optics of a Solyndra default will be bad,” the Office of Management and Budget staff member wrote Jan. 31 in an e-mail to a co-worker. “If Solyndra defaults down the road, the optics will be arguably worse later than they would be today. . . . In addition, the timing will likely coincide with the 2012 campaign season heating up…

Although [political] optics are generally out of our lane, it may be worthwhile for the Director to privately make this point to the Secretary,” the staffer wrote.

The staffer wrote that allowing Solyndra to shutter its plant in January could let the Obama administration “get some credit for fiscal discipline” and save taxpayer money.

DOE

Jonathan Silver, Executive Director of the Department of Energy Loans Programs Office said in congressional testimony that he wasn’t there when the loan was approved but understood the process to be quite “exhaustive.”

Although I was not at the Department when the Solyndra loan guarantee was considered or issued, it is my understanding that the transaction went through nearly three years of rigorous and exhaustive internal and external due diligence before any taxpayer funds were put at risk.

The process was so exhaustive that the DOE’s credit committee voted against the loan two weeks before President Bush left office.

Then Silver employed the adolescent excuse of “we weren’t the only ones who liked them.”

The federal government was not alone in its assessment of Solyndra’s potential. Some of America’s most sophisticated professional investors collectively invested nearly a billion dollars in the company after conducting extensive due diligence of their own —almost all of it invested before a single dollar of taxpayer funds was provided to the company.

The mother in me wants to ask, if your friends jump off a cliff would you do that too? Of course, in this case I already know the answer.

Solar Industry

In a prepared statement about the Solyndra scandal, Solar Energy Association President and CEO Rhone Resch doesn’t even mention taxpayers’ $535 million.  He’s much more concerned with protecting his heavily subsidized industry:

The loss of any manufacturing jobs – in solar or otherwise – is disappointing, but it is important to look at an industry’s health more broadly rather than through the narrow lens of one company’s success or failure.

Today, the solar industry is one of the fastest growing industries in the United States, employing nearly 100,000 Americans at more than 5,500 companies across the supply chain in every region of the country.

What we are seeing in solar happens in every industry that is maturing and growing more competitive. You’re going to see winners emerge who find innovative ways to offer consumers the most competitively priced products.

The last twelve months have seen one of the most dramatic price drops in the history of the solar market. Already in 2011, the cost of solar PV panels has come down by 30 percent.

Competition in the solar industry is good for American consumers. It means that costs are coming down and solar is increasingly affordable for more and more Americans every day.

Everything that Resch said would be true if solar existed in a market, but it doesn’t.  The only reason prices may be falling is that government subsidizes consumers’ solar panel purchases.

That Resch uses the language of free markets to advance his taxpayer-subsidized industry is utterly offensive especially to industries that actually compete and actually provide lower prices due to that competition.

Media

The media has served as a green lap dog, and the DOE reminded reporters and media outlets of it by sending out a list of articles that provided positive spin for Solyndra including, “’Fremont’s Solyndra goes from stealth to solar star!’ exulted the San Jose Mercury News in 2008” and “the San Francisco Chronicle wrote ‘A bright idea for solar power.’”

Reacting to the DOE, NBC Bay Area News claimed to be “Looking Critically at Our Own Solyndra Coverage.” What did the news outlet find? Scouring years worth of news archives, the news outlet found (drum roll please) a story from May 26, 2010 where it quoted “a Fremont Tea Party official who thought the government should not give Solyndra a loan.”

An a second story reported that “the San Francisco Natural Herb company next door to Solyndra, suggesting Obama stop by and visit a traditional company that has been manufacturing in the “tried and true” method.”

Citing these two examples, NBC Bay Area claims “its own coverage, lands in the middle.”  Lap dog or watch dog? You be the judge.

The Professional Left

Center for American Action Fund, a far left DC based think tank, issued its own analysis of “Attacks on Solyndra” and claimed the DOE loan program “creates” jobs, the 1,100 workers at Solyndra notwithstanding. Then it downplayed the actual dollar amount while reminding “progressives” not to worry because more taxpayer money is used to cover any losses.

  • Solyndra’s $535 million guarantee represents just 1.4 percent of DOE’s total portfolio.
  • DOE has set aside $2.5 billion to cover any losses resulting from loan defaults to help protect and decrease risk to taxpayers

Solyndra Executives

Crickets.

Half a billion dollars of taxpayer money is gone, and no one involved shows a modicum of concern for those who paid the bill. Apparently an apology is just too much. Solyndra provides another 535 million reasons to distrust Big Government and its enablers.

This column appeared originally in Townhall Finance on September 17, 2011.