Better Plan, Wisconsin

NOTE FROM THE BPWI RESEARCH NERD: Folks in Rock County are quite familiar with the wind developers mentioned in the article below. They had big plans for a major wind project in the Towns of Magnolia, Spring Valley and Union. They began by signing up landowners to long term contracts and working the community to pit neighbor against neighbor.

The project that was the subject of this audit is located just a few miles south of the Wisconsin-Illinois border.

CLEAN-ENERGY DEVELOPERS REAPED EXCESS U.S. AID, AUDITORS SAY

SOURCE: Bloomberg.com

By Jim Efstathiou Jr. - Oct 26, 2011

The Obama administration overpaid renewable power developers in a federal grant program, including $2.08 million distributed to a unit of Acciona SA (ANA), a Spanish maker of wind turbines, according to government investigators.

The excess payment to EcoGrove Wind LLC, a unit of Acciona, was uncovered in an audit by the U.S. Treasury Department’s inspector general. EcoGrove received a $67.9 million grant in October 2009 for a wind farm in Illinois through a program to promote clean power created in the economic stimulus bill that year.

President Barack Obama’s administration already faces congressional inquiries over the Energy Department’s $535 million loan guarantee to Solyndra LLC, a maker of solar panels that filed for bankruptcy on Sept. 6. The audits raise questions about the Treasury’s management of a separate grant program that has awarded $9.2 billion to wind, solar and geothermal projects as of Sept. 11.

“A significant number of them no doubt have inflated costs,” William Short, an industry consultant and former investment banker with Kidder Peabody & Co., said in an interview. “The road to Hell is paved with good intentions. This one’s a superhighway.”

The grants, covering 30 percent of a project’s cost, are based on what companies claim as the expense of developing a power source. Inspectors found overpayments in four of the five grants they have audited so far. Aside from Acciona, the discrepancies totaled $43,137. The excessive payments may climb as the inspector general investigates more of the 19,875 grants awarded.

‘Abusive Action’

The Treasury grants offer a benefit that leads some project developers to “engage in abusive action,” according to George Schutzer, a partner specializing in tax law with Patton Boggs LLP in Washington. Schutzer said he has advised clients seeking grants against being overly aggressive in their claims.

“It’s on the list of the things the Treasury Department is clearly looking at,” Schutzer said in an interview.

The audits by Eric Thorson, the Treasury’s inspector general, have focused on whether projects were eligible for the grants they received and whether the amounts awarded were appropriate, Richard Delmar, counsel to Thorson, said in an e- mail. The office plans to issue reports on nine additional grants next year, Delmar said.

The audits, which began in February 2010, involve visits to the headquarters of companies that received the so-called 1603 grants, and to project sites, Delmar said.

Planned Report

“We do plan to assess common and/or pervasive issues identified through these individual audits in the aggregate as part of a planned report on Treasury’s administration of the 1603 Program and make recommendations as necessary,” Delmar said.

There isn’t a deadline for completion of the “overall program assessment,” he said.

In Acciona’s EcoGrove project, investigators questioned five items including $5.3 million for interest on a late payment related to a turbine supply agreement with another unit of the company. Ineligible costs totaling $6.93 million led to the government overpayment of $2.08 million, Marla Freedman, assistant inspector general, said in a Sept. 19 report.

“People want to make sure they don’t leave money on the table, but you’ve got to strike that balance between what is permissible and what goes too far,” Jeffrey Davis, a tax partner with Mayer Brown LLP in Washington, said in an interview.

Furniture, Spare Parts

The Treasury Department agreed with the inspector general that Madrid-based Acciona should return $35,479 for costs associated with transmission lines, office furniture and expendable spare parts, according to the report. The Treasury hasn’t determined whether the interest penalty is eligible for the grant.

The company said including the interest payment in the cost of the project is “common industry practice” in construction of wind farms, according to the report.

“I don’t think there’s any padding” of costs, Amy Berry, a spokeswoman for Acciona, said in an interview. “You’re talking about companies that have a lot more on the line than a couple million back from U.S. Treasury. Obviously the consequences are huge if we don’t do it right.”

Small Staff

Six months after Obama signed the stimulus measure, the inspector general said managers at the Treasury Department had failed to explain what staffing would be needed to evaluate “the potentially thousands of applications of varying complexity for awards under this program,” according to an Aug. 5, 2009, report.

The Treasury Department responded that “the current team of four is adequate.”

“Just for just practical matters, we have a program to administer,” Ellen Neubauer, grants program manager for the Treasury, said in a Sept. 21 interview. “We have a large number of applications, a relatively small staff. We sort of have to set some parameters on what we’re going to examine more closely and what we’re not.”

The program has led to $31.1 billion in public and private investment in clean-energy projects that have the capacity to generate 13.6 gigawatts of electricity, about the same amount as 13 nuclear reactors, according to the Treasury.

Treasury Comment

“Treasury’s team works closely with a larger team of reviewers to carefully evaluate each application to ensure that the amount of money awarded is correct,” Sandra Salstrom, a department spokeswoman, said today in an e-mail. “In all instances where funds are found to be paid improperly, Treasury will work aggressively to recoup them.”

In the first five audits, investigators questioned $2.12 million of $306.4 million awarded in grants, or 0.69 percent. In the case of two wind farms developed by EON AG, inspectors reversed initial decisions questioning $1 million in grant awards related to spare parts after Treasury Department officials said the costs were eligible under tax law.

“The auditors that come out aren’t always the subject- matter experts when it comes to tax policy,” Matt Tulis, a spokesman for EON, said in an interview.

Credits Turned Grants

The incentives began under President George W. Bush as a tax credit companies could use to offset profit by investing in renewable energy projects. The 2008 financial crisis dried up company profits and opportunities to use the tax credit, resulting in the move to convert the benefit to grants.

“Our experience shows that it’s difficult getting financing for the projects,” Schutzer, the tax lawyer, said. “That makes the grant or the credit upfront so valuable. I would bet that the rate of mis-claimed charitable deductions is a good bit higher than the rate of abuse you’d find with the grants.”

The grant program, which was set to expire last year, received a one-year extension in December. A second continuation is unlikely, Bill Wicker, a spokesman for the Senate Energy and Natural Resources Committee, said in a Sept. 12 e-mail.

“Given the considerable fiscal challenges confronting Congress, renewing this program seems to be a steep hill to climb,” he said.

NEXT STORY:

BAT FATALITIES AT WIND FARMS: CURTAILMENT A MORE COMMON PRACTICE

by Bill Opalka,

Source www.renewablesbiz.com

October 26, 2011

The recent discovery of a dead endangered bat at a Pennsylvania wind site led to the immediate shutdown of night-time operations of a wind facility. The practice has become more widespread I recent years.

Unlike a few years ago, the wind industry has been armed with studies and procedures that lead to immediate actions to prevent further fatalities, which have been deployed in sensitive areas populate by migrating birds and bats.

On September 27, Duke Energy Corporation notified the U.S. Fish and Wildlife Service that a dead Indiana bat, a state and federally protected species, had been found at its 35-turbine, North Allegheny Wind facility.

The facility, located in Cambria and Blair Counties in Pennsylvania, has been in operation since September 2009, and the bat carcass was located during voluntary post-construction mortality monitoring, FWS said.

Duke Energy stopped operating the wind farm at night “to prevent additional mortalities of Indiana bats,” spokesman Greg Efthimiou said.

Efthimiou said the company will continue to switch off the farm a half hour before sunset and a half hour after sunrise until mid-November, when the migration season of the endangered Indiana bat generally ends.

The ridge is in the section of the Appalachian Mountains that extends into West Virginia, where the issue of bat mortality first gained prominence a few years ago.

The bat carcass was discovered by a contracted technician and brought to the office at the end of the day per Duke standard procedures.

Duke immediately curtailed night-time operations of the turbines at the North Allegheny facility, and reported the incident to the Pennsylvania Game Commission and the Service. The FWS said it is currently reviewing the incident.

A project in West Virginia was itself endangered when the Beech Ridge project avoided denial of its permit when wind developer Invenergy and the Animal Welfare Institute reached a proposed settlement in federal court. The developers sought an “incidental take permit” from the U.S. Fish and Wildlife Service, recognition that some fatalities will occur from an otherwise lawful activity.

The actual settlement that was agreed upon allows the turbines to be in 24 hour operation between mid-November and April 1 when the bats are hibernating. For the remaining months the turbines may only operate in the daylight hours.

In other locations, bat and bird monitoring has led to wind curtailment. Not the most lucrative solution, as curtailment cuts into wind plant revenue, but it helps avoid a PR disaster-in-the making.

In response to a questionnaire submitted by Union Township to wind developers regarding the noise made by wind turbines the developers defended their noise specifications with statements that indicated they may have opened "some medical books" to get an answer. Those who are currently unable to sleep because of turbine noise in Fond du Lac county might take issue with this armchair diagnosis provided by a wind farm salesman. Our Grade For His Response?

A big, red F.

Here is the response: "Turbines are sited to have maximum sound level of 45dBA, well below levels causing physical harm. Medical books on sound indicate sound levels above 80-90dBA cause physical (health) effects. The possible effects to a person's health due to "annoyance" are impossible to study in a scientific way, as these are often mostly psychosomatic, and are not caused by wind turbines as much as the individuals' obsession with a new item in their environment."

Community noise experts Kamperman and James took issue with this and published a formal response to the questionnaire, highlighting major deficiencies in the wind developers' statements, including:

* The tone and context of the statement implies that 45 dBA is fully compatible with the quiet rural community setting.

* No acknowledgement is made of the dramatic change this will be for the noise environment of nearby families.

* No mention is made of how the wind facility, once in operation, will raise evening and nighttime background sound levels from the existing background levels of 20 to 30 dBA to 45 dBA.

* There is no disclosure of the considerable low frequency content of the wind turbine sound; in fact, there are often claims to the contrary.

* They fail to warn that the home construction techniques used for modern wood frame homes result in walls and roofs that cannot block out a wind turbine's low frequencies.

* They do not disclose that the International Standards Organization (ISO) in ISO 1996-1971 recommends 25 dBA as the maximum night-time limit for rural communities. Sound levels of 40
dBA and above are only appropriate in suburban communities during the day and urban communities during day and night. There are no communities where 45 dBA is considered acceptable at night.

* Making statements outside their area of competence, wind industry advocates, without medical qualifications, label complaints of health effects as "psychosomatic" in a pejorative manner that implies the complaints can be discounted because they are not "really medical" conditions. Such a response cannot be considered to be based in fact.

TO READ MORE ABOUT NOISE AND SITING OF WIND TURBINES, DOWNLOAD THE FULL KAMPERMAN AND JAMES "HOW-TO" GUIDE BY CLICKING HERE

NOTE FROM THE BPWI RESEARCH NERD: Developers and Wind Lobbyists alike compare the sound of industrial wind turbines to that of a refrigerator. The source of this statement seems to come from Tom Gray, a lobbyist for the American Wind Energy Association, and he can't seem to decide how far from the refrigerator you need to be in order to make the comparison, as illustrated by the video below.

UPDATE ON THE ICE THROW FROM AN INDUSTRIAL WIND TURBINE

(Click here to read it at its source)

Residents complained when the 260ft wind generator began hurling shards of ice, some measuring two feet long, after the cold snap over the weekend.

Operators Cornwall Light and Power turned off the machine in Kings Dyke, Whittlesey, Cambs, which is situated next to several homes and an industrial estate.

The energy company has also opened an investigation amid fears that the ice could have caused serious injury to people living and working near the turbine.

Tyson Clark, who owns a carpet showroom next to the generator, said he called Cornwall Light and Power demanding that it be turned off when lumps of ice started falling on his premises.

He told his local newspaper, the Wisbech Standard: "We have been told the turbine will stay off until the company has some satisfactory answers to why it happened."

The turbine was restarted a day later but had to be switched off again after more people complained.

Peter Randall, who runs a nearby welding company, said: "We were assured that ice could only cause a problem in severe weather conditions like those in Scotland, and two days later we got javelins thrown at us.

"I am worried about the safety of my family and everyone in the area, we should not have to put up with this."

The £2million turbine was criticised by many local residents when it was erected.

Whittlesey county councillor Ronald Speechley said: "It's worrying. Ice froze on the blades and, when it started moving, it started throwing it all over.

"It could be very dangerous."

A spokesman for Cornwall Light and Power said: "Following reports of ice shedding on Saturday, we shut down our wind turbine at Whittlesey.

"Our people have visited the site and nearby residents, and we have agreed that the turbine will not generate until we are fully satisfied that there is no risk of ice shedding."