Articles filed under Impact on Economy from New York
A grass roots coalition of nearly 100 citizens from New York, Vermont, and other states have filed a federal Anti-Trust Complaint alleging that an international cartel comprised of foreign and domestic business entities have conspired to eliminate competition in the newly emerging U.S. wind energy sector.
It's a small island. That fact became strikingly clear last week when Martin Cantor, director of the Long Island Economic and Social Policy Institute, hit the road with a report that blasted the economics of LIPA's proposed offshore wind farm. As LIPA chief executive Richard Kessel unsheathed his PR sword (much used of late) to begin parrying the Dowling College-based study, one uncomfortable fact came to light: Cantor for years was Kessel's personal accountant.
The Long Island Power Authority's proposal to build a grid of industrial-strength wind generators a few miles into the ocean off Jones Beach is adrift. It's too expensive, and it should remain at sea.
Critics of the wind farm proposed for the waters off Jones Beach yesterday demanded that the Long Island Power Authority fully disclose the real costs for the project and the impact on electric bills. With outside estimates that the total cost of the wind farm's construction could range from $250 million to more than $1 billion, Suffolk Legis. Wayne Horsley (D-Babylon) and regional economist Martin Cantor said Long Islanders are being left in the dark about the potential costs of the 40-turbine project, which Cantor said could wind up to be "another Shoreham."
The proposal to build a 40-turbine wind farm off the South Shore would enrich its contractor with "extraordinary" returns while "saddling" Long Island ratepayers with a 20-year-plus contract for energy at "excessive" prices, a new study of the project's economics has found. Scheduled to be released this week, the study, by the Long Island Economic & Social Policy Institute at Dowling College, questions the initial $356-million construction cost of the project and suggests LIPA explore the alternative of funding and building the wind farm itself, which it says would be cheaper. "Wind energy makes sense for Long Island, but this contract does not," said the study's author, Mark Greer, a professor of economics at Dowling. Using documents first obtained by Newsday through a Freedom of Information Law request last year, the study's research determined that contractor FPL Energy's proposed construction costs exceed current market estimates for an offshore wind farm by more than $100 million. Greer estimated a realistic construction cost estimate to be around $250 million. In addition, the study determined that the return on investment for the wind farm would be 19 percent to 20 percent - a figure Greer called extraordinary for lower-risk ventures such as wind energy - while providing a shareholder return on investment of 42-45 percent.
And, he offered a glimpse of the future by linking the profusion of energy- generating windmills in Denmark to the potential expansion here - beyond a beginning crop of windmills being set up at the old Bethlehem Steel plant. "I think you're going to see wind energy as a huge market," he said.
Amid references to his hockey team and jokes that fired up the nearly 200 in attendance, billionaire Tom Golisano, owner of the Buffalo Sabres and founder of the successful Paychex company out of Rochester, promoted his newest entrepreneurial endeavor, Empire State Wind Energy, on Monday night at the Albion Senior High School. It wasn't the first occasion politicians and residents of Orleans County had gathered to hear heads of companies pass on details related to the often controversial topic of wind turbines. But, according to Golisano and his business partner Keith Pitman, their plan is different. "I don't want to make the same mistakes as Niagara Falls," Golisano said in reference to what he views as unfair distribution of funds yielded from the Niagara Power Project. "If it's your energy and wind, why give it up? We started this company because we think we have a better idea." According to Golisano and Pitman, that idea includes giving local municipalities more of the profits from wind energy, while leaving an option for ownership. In their view, outside companies work their way into the region, leaving taxpayers with a pittance of what they deserve.
The Long Island Power Authority's wind-farm proposal is about to get some serious new scrutiny - from LIPA itself. At a board of trustees hearing Thursday, LIPA chairman Kevin Law said he intends to conduct thorough economic analysis of the proposal to put 40 wind turbines off the coast of Jones Beach. Law stressed that he, like most Long Islanders, is a strong supporter of renewable energy sources, particularly amid growing concerns about how greenhouse gases contribute to global warming. But he also realizes that Long Island ratepayers have a pricing threshold. "We have an incredible affordability crisis here on Long Island, and we need to do things that make economic sense," he said after the meeting.
The Jordanville Wind Project’s 68 proposed wind turbines, which would stand nearly 400 feet tall, could have a visual impact on southern Herkimer County and as far away as Cooperstown. A debate is emerging among residents about how the sight of the turbines would affect the beauty of the landscape, land values and tourism. Some think the impact will be small or nonexistent, while others believe there could be many downsides. People visit the Cooperstown area not just for the National Baseball Hall of Fame and Museum, other museums and tourist attractions, but also for the scenic views, said Harry Levine of a citizens’ group called Advocates for Springfield. “I think we have to be very careful how we treat this background landscape because it could have a long-term effect on tourism,” Levine said.
Madison County Supervisors are at odds over whether the county should get a portion of the payments that will go to the towns and schools affected by the latest windmill project with Citizens Airtricity Energy LLC. Chairman of the Board Rocky DiVeronica called a special board meeting Wednesday to consider an agreement with Airtricity so the county would get $500 per megawatt of electrical power as a payment in lieu of taxes (PILOT). DiVeronica planned to conduct the meeting behind closed doors in executive session.
Sue Brander of Advocates of Stark and also a wind farm opponent, sees several other economic disadvantages. Brander sees the wind farms as a federal tax scam. She said the federal policies were designed by Jeffry Skilling, the former Chief Financial Officer for Enron, who is now in jail. The 68-turbine project proposed for the Stark, Jordanville, Warren area would cost approximately $136 million. Under the current system, the owner of the project can deduct 64 percent of the investment in two years, which comes out to $96 million. Brander said that Congress needs to review these laws and change them because investment banks, such as Goldman Sachs, are buying them just for the tax write off. She also sees an economic disadvantage for real estate value. Brander said that although some developers and market analysts have said property prices would not go down, properties up for sale around wind farms see less interest than homes away from wind farms. “It is all supply and demand, and people are seeing losses in their real estate value,” said Brander.
Although details are still being worked out and completion of area wind farms isn’t expected untill sometime in 2008, some local officials are looking forward to the economic benefits that these farms could bring to their towns. Rick Bronner, supervisor of the town of Stark, said that county officials are still working out the numbers for the Payment in Lieu of Taxes arrangement, but as of now the towns of Stark and Warren would both receive $97,000 a year in annual payments for the next 15 years for the 68 two megawatt towers that will be built in that area. Also, the Stark and Warren school districts both would receive $340,000 a year, and the county would receive $432,000 a year.
Wind Project are two megawatt turbines, the taxation rate will be $16,000 per turbine. The county’s consultant determined that the full taxation rate per turbine would be $40,000 per megawatt. Therefore, the county’s offer represents an 80 percent tax exemption. This rate of exemption will apply to all wind projects in Herkimer County. The Jordanville Wind project will bring “six to 12 jobs” to the county, according to the Jordanville Wind Project Draft Environmental Impact Statement. By comparison, Wal-Mart brought over 200 jobs and generates over $1 million a year in sales-tax revenues at its distribution center in Schoharie County, which employs many Herkimer County residents.
Reunion has been using the phrase “sweetening the deal.” Is this an admission that the offer hasn’t been or still isn’t sweet enough? Reunion has also been stating, “wait until our application is in” to provide all the financial and environmental details of their offers. What strategy is this? Like the legendary Trojan Horse? Get in, then ravage?
Reunion Power was expected to announce late Wednesday afternoon that it has upped the ante by offering to further subsidize the electricity cost for residents in the town and village of Cherry Valley. East Hill Wind Farm LLC is working with NYSEG Solutions in an effort that will result in the proposed East Hill Wind Farm providing electricity via NYSEG Solutions directly to participating homes in Cherry Valley for 20 years, according to a press release from East Hill Wind Farm LLC. David Little, vice president of development for Reunion Power, stated, “Working cooperatively with the community is extremely important and this agreement would bring one of the many benefits of the wind farm directly to every home in the town and village.”
If Reunion Power’s proposed East Hill Wind Farm is built, the firm said it is willing to reduce all residential electric bills in the town of Cherry Valley by about 50 percent for the next 20 years. Company officials and James DiStefano of NYSEG Solutions unveiled the proposal Wednesday night at a forum held at the Cherry Valley Community Center. David Little, Reunion’s project manager, outlined the offer, which he said is unique in New York state. ``People have asked us if we could help with their electric bills," he said, "and we want to do that."
Reunion Power is expanding the circle of landowners that would directly benefit from 24 turbines it plans on East Hill, offering a “meaningful” sum, not just to hosts, but to “more than two dozen” people whose properties are around the project, according to company Vice President David Little. “I have received a number of calls from folks who are taking an interest in this,” he said. “I’m actually very pleased with the response I’ve gotten so far.” “They’re hedging their bets just in case the ordinance passes,” said Andy Minnig of Advocates for Cherry Valley. One landowner was offered $2,000, according to Minnig, but Little declined to confirm that number, although he did say it is a flat amount, not based on the amount of acreage involved.
PLATTSBURGH — With wind farms due to break ground in Clinton County, there's a lot of money riding on the breeze. But when will the biggest bucks start flowing? The Town of Altona has already banked $68,000 in host-community cash from Noble Environmental Power — that's $1,000 for each wind turbine the company intends to erect in its Altona Wind Park there. That agreement includes $3,000 per tower, as well, said Town Supervisor Larry Ross, which won't be affected by construction delays Noble is experiencing of late. "I believe that's January 1st," Ross said. The towns of Clinton and Ellenburg have those same deals with the wind-energy developer.
Trump has partnered with Bethpage caterer Steve Carl to create Trump on the Ocean, a $40-million upscale catering hall and restaurant on Jones Beach's boardwalk. They will announce the deal this afternoon...... The ballrooms and lobby will feature Atlantic Ocean views - and Trump said he wants them unobstructed, strongly objecting to the proposal for a 40-turbine wind farm three and a half miles off the beach's coast. "I think it's terrible," Trump said, adding that he thought solar and wave energy were better alternatives. "If they want to destroy Jones Beach and the entire Long Island shore, then I think they should build a wind farm."
Eric and Kyle Hosmer of Howard address the Howard Town Board meeting Wednesday night and asked that a letter they read to the board be placed in the official minutes. The request was denied for the time being. As a courtesy, we are printing portions of that letter here.Editor's Note: The complete letter follows.