Library filed under Taxes & Subsidies from Oregon
This action was a serious breach of the revenue department's ethical responsibility to act in the best interests of all Oregon taxpayers. The department's involvement in the failures of the BETC program needs further investigation. Taxpayer money should not have been allowed to flow out of state coffers into the BETC program with little to no supervision.
Some of the biggest names in Oregon's renewable energy and forest products industries landed on a list of suspicious state giveaways during an investigative audit of Oregon's Business Energy Tax Credit Program. ...The audit details ongoing and costly failures by staff at the Oregon Department of Energy in applying the most fundamental rules of the program or performing basic due diligence to ensure tax credit applicants qualified for the money and used it as intended.
The government's Energy Information Administration detailed the findings earlier this month in a study that showed falling wind energy production in California, Oregon and Washington state — typically known as a bastion for clean energy development. The agency didn't say how the wind energy slump would affect the electric grid, but it did say it could hinder wind farms from taking advantage of a key federal tax subsidy and harm their economic viability. Clean energy companies rely on the subsidy to fund projects. ...Even small changes in wind speed can dramatically reduce electricity output from wind turbines.
The extent of the investigation is unclear, but a senior auditor from the secretary of state’s office recently requested more than 70 pages of records on privately brokered sales of Oregon business energy tax credits from 2013.
A bill designed to shield Oregon's renewable energy mandates from a potentially game-changing ballot measure sailed through the Senate's Business and Transportation Committee Tuesday, even as opponents called it a back-room deal hatched to benefit industry insiders and ignore average citizens. ...Irene Gilbert said the bill circumvents the opportunity for citizens negatively impacted by the renewable mandates to have a say in what is counted toward meeting them.
The energy department has a task immediately ahead before yet another legislative hearing on the subject: It must tell lawmakers, who represent the Oregonians who underwrite incentive programs such as the BETC, whether Shepherds Flat got a deal too good to be true and whether it knows the right questions are being asked of an energy-producing applicant.
Shepherds Flat's three LLCs share a common parent company, Caithness Shepherd's Flat LLC. Caithness Shepherd's Flat LLC, in turn, is owned by the project developer, Caithness Energy, its turbine supplier, General Electric, and three investors brought in to harvest the project's tax benefits - Google, Itochu and Sumitomo of America. "I don't know how much more common ownership you could have."
The director and staffers at the Oregon Department of Energy faced sharp questions from lawmakers at a Tuesday hearing regarding their approval of three separate $10 million tax credits for the Shepherds Flat wind farm in eastern Oregon.
At the heart of the money problem is the state's decision to award the project three tax credits with a combined value of $30 million rather than the single tax credit worth $10 million to which it was entitled. Shepherds Flat began as one project that subsequently was broken up into three pieces in an attempt to maximize state subsidies.
"If it is true that the state, in one stroke, gave away or simply wasted $20 million, the people of Oregon deserve an explanation and the assurance that we will take steps to change the law so it cannot happen again." ..."Unless someone can show me some additional information," she said, "it's pretty clear that taxpayers got bilked."
In contrast, federal officials didn't seem to have much doubt that the Shepherds Flat project would progress. Still, The Oregonian cited an email from Jim McCrea, a credit adviser in DOE's loan program office, suggesting heavy interest from the White House to make a decision on Shepherds Flat. "Pressure is on real heavy on SF due to interest from VP," McCrea wrote to a contractor in September 2010.
In the end, Caithness sold its three tax credits at a discount to WalMart and Comcast. The extra cash from the sale of the wind farm's second and third tax credit will generate less than 0.7 percent of its price. "These tax credits would not have made a whit of difference in the construction of this project, and yet $20 million would make an extraordinary difference to the people of Oregon," said Lynn Frank, former director of the state Energy Department.
The Oregon Department of Energy ignored its own rules, legislators' intent and taxpayers' interests in reaffirming its decision to define Shepherds Flat wind farm as three separate facilities and provide its owners three separate $10 million tax credits. ..."What is clear, without question, is that they have sought how to qualify it, not how to disqualify it. Any reasonable person looking at the project would have denied the application."
The developer of the mammoth wind farm, New York-based Caithness Energy, went though the legal exercise of subdividing the project on paper to qualify for three separate, $10 million state subsidies. The Energy Department approved them in the last six months, despite sufficient evidence in two of its own analyses to define the wind farm as a single facility, deserving only one tax credit.
The state Department of Energy is reviewing whether a major wind farm in north-central Oregon should have received $30 million in tax credits. Officials decided to re-evaluate their recent approval of the tax breaks for the Shepherd's Flat wind farm after The Oregonian newspaper raised questions about whether it should have qualified for them.
The Oregon Department of Energy said it will reevaluate its recent approval of $30 million in tax credits for the Shepherd's Flat wind farm, a collection of 338 turbines in Gilliam and Morrow counties that bills itself as one of the largest wind farms in the world.
No one has ever before sued the US president over this type of ruling, but Ralls argues that Mr Obama exceeded his powers ... On Friday afternoon, Obama issued an order compelling the company to sell within 90 days four wind farm sites in Oregon, and to clear all its equipment and structures off the sites within 14 days.
Gas prices, the report worries, "may not ultimately rebound to earlier levels as the economy recovers, due to the ongoing development of significant shale gas deposits." The widely held belief that gas will remain cheap for quite some time "puts the near-term comparative economic position of wind energy at some risk, absent further reductions in the price of wind power (and absent supportive policies for wind energy)."
Currently, projects can receive tax credits worth up to 50%. The new legislation scraps this element of the program and instead provides grants. The budget for the entire program is limited to $3 million, which does not make much of a dent when dealing with large projects that can cost millions of dollars.
Oregon's practice of channeling ever higher sums of taxpayer dollars into big wind farms and other green energy projects appears to be coming to an end in favor of thriftier and more targeted conservation incentives.