Gov. Ted Kulongoski ordered a hurry-up review Tuesday of Oregon's incentives for renewable energy companies in the face of ongoing criticism of the tax breaks. ...The governor's request comes on the heels of an investigation by The Oregonian that revealed state officials downplayed the estimated cost of the incentives before they were expanded by the 2007 Legislature at Kulongoski's urging.

State officials deliberately underestimated the cost of Gov. Ted Kulongoski's plan to lure green energy companies to Oregon with big taxpayer subsidies, resulting in a program that cost 40 times more than unsuspecting lawmakers were told, an investigation by The Oregonian shows. Records also show that the program, a favorite of Kulongoski's known as the Business Energy Tax Credit, has given millions of dollars to failed companies while voters are being asked to raise income taxes because the state budget doesn't have enough to pay for schools and other programs.

When three Eastern Oregon wind farms got big federal grants last week, the news brought a debate that has been simmering at the state level to a boil. Because wind farms are expensive, wind power company officials say, they need all the help they can get. But some say the recent grants serve as a high-profile reminder that Oregon doesn't need to spend more to woo wind farms. "Oregon is far more generous than other states," in terms of renewable energy credits, said Jody Wiser, chairwoman of Tax Fairness Oregon. "And it's not driving more building in Oregon; it's just giving money away."

So many businesses are getting tax subsidies under Oregon's effort to promote alternative energy that the state now estimates it will spend $167 million on them in 2009-11, up from $68 million it gave out in similar tax breaks in 2007-09. The higher spending demonstrates the increasing popularity of Oregon's Business Energy Tax Credit. But it comes at time when other state programs face cutbacks, and that's giving some lawmakers heartburn.

Oregon lawmakers tried to save millions of taxpayer dollars by trimming state subsidies enjoyed by wind energy farms, but Gov. Ted Kulongoski said today he plans to veto that effort. In doing so, the governor signaled he has little tolerance for any retreat on his vision for the state as a national center for alternative energy -- recession or no. ...Sen. Ginny Burdick, D-Portland, who led the effort to rein in wind farm tax credits, said ...the tax breaks go too far and cost too much.

Putting up towers and turbines, building roads between them and hooking them to the power grid can be expensive. Offering a little leeway on the front end in the form of tax relief - up to about $10 million until recently - has helped Oregon bring in the farms during the past decade.

A state program that subsidizes green energy projects got trimmed Friday when lawmakers gave final approval to a bill that reduces tax credits for Oregon wind farms. Gov. Ted Kulongoski hasn't decided on the bill. His aide said he doesn't want to roll back Oregon's incentives for alternative energy because they have delivered "tremendous economic returns." At the same time, he recognizes that the state needs all the money it can get in the next two years.

In the waning, let's-make-a-deal days of the 2009 Oregon Legislature, clean-energy advocates, utilities and industry trade groups have been wrangling over three bills that could significantly modify renewable energy legislation implemented just two years ago.

The success of a bill that would slow wind farm development in Oregon seems assured in Salem this week, slowed only by disagreements as to the extent of cuts to the green energy tax subsidy. ...Hunt said the changes would save the state nearly $70 million over the next six years.

Given a chance to put a bill on Gov. Ted Kulongoski's desk that would cut Oregon's generous wind tax credits, the state House of Representatives paused today. Now a bill that would cut Oregon's Business Energy Tax Credits goes to a conference committee.

When the government's $787 billion economic stimulus package became law last month, the Bonneville Power Administration was one of the many beneficiaries. The federal utility wasted no time making use of its share, rolling out plans for a major transmission project ...The project now aims to provide service for 873 megawatts of energy - about 700 megawatts of that from wind power. That wouldn't have been the case seven years ago, he said.

Oregon taxpayers are shelling out tens of millions of dollars to subsidize green energy projects, making the state a magnet for solar and wind companies. But an investigation by The Oregonian shows that the money also is going to risky ventures with questionable environmental benefits and to prosperous companies that need no incentives but are cashing in anyway. ..."It's gotten out of hand," says Chuck Sheketoff, director of the Oregon Center for Public Policy, which studies the impact of state tax policies on low-income residents. "It's being scammed. It's not serving its purpose."

Umatilla and Morrow county residents will get their first look at possible property tax exemptions for wind farms at public meetings Friday. The property tax exemptions are called strategic investment programs, or SIP, and provide an incentive for large capital investments - in this case the Echo wind farm. ...The proposed SIP provides the advantage of a flat tax rate for the companies involved with the wind farm and a stable 15-year funding base for the two counties.

While other Portland greenies and politicians are going gaga for wind power, the former Irvington Elementary School teacher argues the state is throwing away tax breaks to lure windmills that provide few permanent jobs and would locate here anyway. "This is an astounding trick that's being played on taxpayers," said Wiser, volunteer leader of the group Tax Fairness Oregon.

In a public hearing Wednesday, the Morrow County Court approved of a special tax schedule for the Willow Creek Wind Farm, which is building 48 wind turbines in Morrow and Gilliam counties. The program, known as a Strategic Investment Program (SIP), allows the energy company to pay the majority of its property taxes spread out over 15 years rather than the first six, which is the norm under tax schedules. Paul Woodin, the executive director of the community renewable energy association, said that without the SIP, Oregon would be one of the most expensive places to site a wind farm.

Tax breaks and cash rebates have done what the most gung-ho green talk has not: ignited a solar power boom in Oregon. Oregon officials expect the amount of solar power in the state to jump more than eightfold this year as businesses, nonprofits and government agencies install rooftop and ground-mounted photovoltaic systems at record rates. The surge is courtesy of the taxpayer, who foots the bill in this effort to go green. ...Skeptics don't like the size of the subsidies, which are expected to reduce the state budget by almost $96 million annually by 2013 -- money that otherwise would be available for schools, health care and other government-funded services. Besides, they note, even such furious development isn't going to make solar energy a significant part of the state's overall power supplies anytime soon. "It's window dressing," said Jeff King, a senior resource analyst with the Northwest Power and Conservation Council who tracks the region's power supplies and finds solar just a blip.

The Bonneville Power Administration has initiated a rate case to set the price for balancing services for wind generation because of the rising expense of integrating increasingly large amounts of the intermittent resource in its control area. ... The agency must also be able to absorb the highest hour of expected generation because it runs the risk that its existing resources cannot absorb the added energy. In the case of hydro or pumped storage, the agency would have to spill water rather than use it to generate power or use it at a less efficient time. Therefore, the agency will have to assess a sink charge.

Parents saving for college, mobile home owners facing eviction, and businesses that generate or use alternative energy are among the beneficiaries of a wide-ranging tax break bill signed by Gov. Ted Kulongoski on Tuesday......The energy initiative, which ranks as the biggest tax break in the bill, will expand the credit for businesses to build wind farms, use solar or otherwise boost the use of clean energy. Now the credit is 35 percent of costs, with a cap of $3.5 million. The new law increases the credit to 50 percent, with a $10 million cap. It's estimated to cost the state at least $6 million a year by 2009-11.

The most expensive of the tax breaks would reimburse businesses for half the cost of wind farms, biofuel plants and other renewable energy plants or equipment. Deckert said that break will create good jobs and make Oregon more prosperous.

A fortified Oregon business energy tax credit (BETC), which raises the maximum write-off for renewables from 35 percent on $10 million projects to 50 percent on $20 million projects, is all but certain to pass into law as HB 2811 before legislators head home from Salem. But a new BETC won't do businesses much good unless lawmakers also close a loophole that devalues tax credits in years such as 2007, when the state will pay out a business tax kicker. As things stand, the kicker lessens corporate tax burdens and, in turn, eats into the value of the credits for would-be buyers - costly both in millions of dollars to the economy and megawatts gone undeveloped.