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“Merkley, Wyden Announce Nearly $150 Million in Recovery Act Funding for Oregon Wind Farms
Sep-01-2009
http://www.salem-news.com/articles/september012009/wind_farms_9-1-09.php
One wonders who got our money this time.”

It certainly wasn’t the people of Oregon yet they have to tolerate those grotesque windmills and give the socialist ventures their hard-earned tax-money. Well, at least Wyden got his son in the door of his venture buddy D.E. Shaw.

How many jobs from Oregon’s green energy incentives? No one knows

March 13, 2011,

Labor leader Tom Chamberlain decided some basic research was in order before the Oregon AFL-CIO could lend its support to the state’s increasingly expensive subsidies for green energy projects.

“We wanted to know what we were getting for the money,” he says. “How many jobs? What do they pay? Like any tax incentive program, you want to make sure you’re getting bang for your buck.”

Instead of numbers, Chamberlain says, he got the equivalent of a blank stare from the Department of Energy, which administers and approves the subsidies.

That was two years ago.

Today, little has changed. Despite claims by supporters that the subsidies have led to “thousands” of jobs, no one can say with any certainty what impact the Business Energy Tax Credit, or BETC, has had on the state’s stubbornly high unemployment rate.

To get a better handle on the link between the incentives and jobs, The Oregonian examined Energy Department records, talked to economists and looked at individual projects that received the incentives. Among the conclusions:

The Cost of Green

Green energy isn’t just a moral imperative, politicians say. It creates jobs. But how much do Oregon’s green energy subsidies really cost? And what do we get for our money?
Reporters Ted Sickinger and Harry Esteve have examined those questions over the last several months, plowing through records, interviewing experts in government and business, and analyzing what they found.

This series builds on their earlier reporting the past two years.

Day 1: The world’s largest wind farm gets $1.2 billion in subsidies and will generate 35 jobs.

Day 2: No one can say how many jobs Oregon’s energy tax credits have created.

Day 3: Bipartisan support makes rollbacks of the subsidies unlikely. With the exception of solar equipment manufacturing companies, such as SolarWorld and Sanyo, the state has no firm data on the number of jobs that can be attributed to the subsidies.

The subsidized cost of each job varies dramatically. For example, Horizon Wind Energy received $11 million in tax credits for an eastern Oregon wind farm that, after construction, created 36 full-time maintenance and operation jobs. Solaicx, a Portland solar manufacturer, got $9 million in tax credits and employs 127 full-time staff.

In some cases, the state has spent millions of tax dollars and gotten only a handful — or no — jobs in return because the companies didn’t perform as billed, were sold and shut down, or went bankrupt and folded.

Examples include Cascade Grains, a biofuel start-up that received $12 million in state subsidies before going bankrupt and out of business, and Reklaim Technologies, which got $3.4 million in state subsidies to recycle tires into oil. After two years, the recycling plant employs eight people, according to the Port of Morrow, and has yet to deliver a marketable product.

The examples above include only state incentives. Green energy projects often qualify for much bigger federal grants and tax breaks as well, vastly increasing the subsidized cost per job.

Scrutiny of Oregon’s tax credits intensified in recent years because their cost to the state has skyrocketed.

Since 2007, state spending on the incentives has gone from about $30 million a year to nearly $150 million a year.

Much of the increase results from an aggressive expansion of the incentives four years ago. In 2007, at the urging of then-Gov. Ted Kulongoski, the Legislature allowed wind and solar companies to claim credits for half their project costs, a tax break of up to $20 million for manufacturing plants and $10 million for wind projects. The rules were written loosely enough that many companies qualified for multiple tax credits.

What was once a small conservation program became one of Kulongoski’s top economic development strategies. He and other supporters of the expansion said it would lead to a new wave of industry and jobs in Oregon, helping the state pull itself out of its economic tailspin.

Yet until two years ago, THE STATE KEPT NO RECORDS OF JOBS ASSOCIATED WITH THE SUBSIDIES. In 2009, the Energy Department began asking for job information on the application forms. But few applicants included the information, causing the department to rewrite the forms with more explicit directions on how to calculate job numbers, says Diana Enright, spokeswoman for the department.

“It’s something new to think of this as a jobs program,” Enright says. “We’re learning as we go along what questions to ask.”

The exception has been solar manufacturing plants. Business Oregon, the state’s economic development agency, has closely tracked those jobs since 2009, says agency director Tim McCabe.

A spreadsheet provided by McCabe lists 1,482 jobs at three plants — 1,140 at SolarWorld and the remainder at Solaicx and Sanyo. Another 500 jobs are expected when SoloPower opens its flexible solar panel factory in Wilsonville, and another 94 when Solexent opens a promised plant in Gresham. Combined, the five companies are on track to receive about $180 million in state tax subsidies and even more in federal subsidies.

McCabe’s office produced a study for the Legislature that estimates the spinoff effect of the new solar plants at 7,000 additional jobs in the state. It used a modeling tool called “Implan” to assess the full impact of the incentives. Implan is widely used to calculate the multiplier effect of new jobs in the economy.

“Certain industries bring in more money than others and spend more money than others,” McCabe says. “Manufacturing has a substantial multiplier effect.”

Tying the tax incentives to job creation becomes more problematic, however, in other parts of the green economy. Oregon gives incentives based on how much it costs to build a solar factory or a wind farm — not on how many people get jobs as a result.

Wind farms are massively expensive facilities to build, but they employ few people once they’re up and running. They also have a smaller indirect economic impact than manufacturing plants. They buy few supplies, produce a smaller pool of wages to wash through the economy, and generate less personal income tax revenue for the state.

Consider the giant SHEPHERDS FLAT WIND FARM in eastern Oregon. The project’s developer has applied for and been pre-certified by the Department of Energy for three business energy tax credits totaling $30 MILLION. BUT it is only projected to create 35 permanent jobs.

Contrast that with SoloPower’s projection of 500 jobs for its $20 million tax credit.

The goal of Oregon’s green energy incentives has become somewhat nebulous, says Tim Duy, an economist at the University of Oregon. There is a kind of BLIND FAITH AMONG POLICY MAKERS, he says, that if Oregon develops the green energy cluster, and develops a brand as the green energy state, that untold riches will flow in the future.

That may or may not pay off, Duy says. Green jobs are mobile, easily poached by other states or countries dangling richer incentives or cheaper labor costs.

Technology and markets change, bankrupting some companies that Oregon has heavily subsidized.

Every dollar that Oregon taxpayers spend on the energy subsidies is a dollar they don’t have to spend elsewhere, Duy notes. That forgone spending would have its own economic impact, creating jobs, wages and taxes.

“We’re not asking the questions about the economic efficiency of the tax credits,” Duy says. “Those questions are being swept under the rug or ignored. My sense is that we’ll do anything for green energy in this state and we’re not doing a cost benefit analysis of what we’re getting out of it.”

McCabe, the state economic development director, says it might be time to take a new look at the incentives and link them more closely to companies that would have a bigger impact on the state economy.

DON’T TIE THE TAX BREAKS TO A SPECIFIC INDUSTRY, he says. Among the companies he suggests that might move here with the right incentives would be clothing manufacturers and food processors.

“I would change it,” he says. “Make it a broader-based incentive that’s tied to wages and to jobs.” http://www.oregonlive.com/politics/index.ssf/2011/03/how_many_jobs_from_oregons_gre.html

A few comments:

“I just returned from camping in the Columbia River Gorge, and the visual pollution in the form of Windmills, the noise they generate and their blinking red lights at night has made it less much less attractive than any development could have. We can’t build on or develop our property, yet we subsidize the construction of ugly windmills that look far worse than any clear-cut made in the forest by the Timber Industry. We are defiantly not better off, nor has any of this infrastructure development been an improvement, or noble in its accomplishments.”

“The people who claimed to be protecting Oregon and promoting sustainability have ruined the natural beauty of the Columbia Gorge. I can’t imagine what it’s like to live there and constantly be reminded of how Oregon officials duped the taxpayers into selling-out homeowners there.”

“Horizon Wind is trying to build a big Wind Farm in Union County. They are threatening the local city counsels. They tell them they have two weeks to agree to a SIP and a Memo of Agreement or they will get NOTHING from the state suppliments. The Memo of Agreement says they will verbally support the Wind Farm, say the SIP pays off for all their concerns about damages, and that they will have no future claim to damages from views, wildlife damage, property value losses, health problems of citizens, etc., etc. So long to Free Speech. Our tax dollars are being used to buy gag orders from local governments that are supposed to be protecting the citizens. Check out the City of Union Wind Farm Committee and click on the MOA. It will curl your hair that our tax dollars are being used to force local governments to give up their role of protecting the citizens. This particular city had a vote and the people voted over two to one against having the wind farm built. So much for elected officials representing the people who elected them! Even worse, when, not if they are voted out, the newly elected officials will have their hands tied and they too will be unable to speak for the citizens. THIS HAS TO BE ILLEGAL!!!! Havent these people heard of FREE SPEECH!!!!”

“I am guessing that Horizon Wind is talking about the Elkhorn Wind Farm when they claim 35 jobs. I live here and there are only 2 full time positions at that wind farm. They have some contractors, but it is flat out a lie to say they are employing 35 people full time . If they are, they live somewhere else as they are not here in Union County. It would not be the first time that Horizon Wind has chosen to distort the truth. They said they would not build wind towers within 3 mileas of a sage-grouse lek at the Elkhorn site in their application. Now, in their application to build another adjoining Antelope Ridge Wind farm, they are saying they should be able to build a bunch of wind turbins within 2 miles of the lek as it is already compromised by, guess what, the wind turbines they built there when they built the Elkhorn Wind Farm. Gosh, lets reinforce them for lying to the Energy Facility Siting Counsel by letting them finish destroying this nesting site for a bird that is already endangered.”

“There is a bill in Salem that would require information to be posted online about the BETC and other economic development tax incentives. It’s HB 2825 and it has bipartisan support, and it has a hearing this Thursday. If this bill passes, the dept. of Energy would have to send info to the state transparency website that says who gets the credit, how much they get, what they promised (jobs or energy production) and what was actually produced. We need to know what kind of return on investment we are getting for our tax dollars. I wrote about this a little and other transparency issues here “- http://www.blueoregon.com/2011/02/major-advances-oregon-transparency-and-many-challenges-too/

Because photovoltaic technology is advancing so rapidly, it also means that a factory you build today could be obsolete within 2 or 3 years. It is not unreasonable to assume that solar manufacturing jobs subsidized with government funds may thus only have a lifespan of 2-3 years.

“I think another big problem, however, is that photovoltaics are not a full-fledged energy source, because of their intermittency. I can imagine that within a few years production of photovoltaic panels will vastly outstrip demand, and we will see inventory pile up, prices plummet, and factories go out of business.”

“A whole lot of emotional fertilizer. The end result is the the common citizens is forced to pay higher power fees for these feel good projects. If all these green energy projects are so neat why in the Hell do they need tax credits? More BS from our incompetent legislature. What happens when the wind don’t blow and the sun doesn’t shine?”

“So it’s only after the fact that someone does an actual cost benefit analysis? I only have one thing to say about this, “follow the money!” Figure out not only who got the benefits of the tax credits, but did they influence in any way the politicians who voted for them ie; massive campaign donations or issue advertising that supports candidates position? After all if they weren’t paid off then the only other option is they aren’t smart enough to continue to represent the citizens who voted for them because they couldn’t do a cost benefit analysis before they spend taxpayer money. They certainly didn’t in quite a few of the reported benefits wasted in this article for wind farms...stupid or paid off, what other choice is there?”