Entries in wind subsidies (2)

1/22/12 How is this news to anyone? Why are we not surprised? 


via The New York Times, www.nytimes.com

By Erick Litchtblau

January 12, 2012

Amid the revolving door of congressmen-turned-lobbyists, there is nothing particularly remarkable about Mr. Delahunt’s transition, except for one thing. While in Congress, he personally earmarked $1.7 million for the same energy project.

So today, his firm, the Delahunt Group, stands to collect $90,000 or more for six months of work from the town of Hull, on Massachusetts Bay, with 80 percent of it coming from the pot of money he created through a pair of Energy Department grants in his final term in office, records and interviews show.

WASHINGTON — Soon after he retired last year as one of the leading liberals in Congress, former Representative William D. Delahunt of Massachusetts started his own lobbying firm with an office on the 16th floor of a Boston skyscraper. One of his first clients was a small coastal town that has agreed to pay him $15,000 a month for help in developing a wind energy project.

Amid the revolving door of congressmen-turned-lobbyists, there is nothing particularly remarkable about Mr. Delahunt’s transition, except for one thing. While in Congress, he personally earmarked $1.7 million for the same energy project.

So today, his firm, the Delahunt Group, stands to collect $90,000 or more for six months of work from the town of Hull, on Massachusetts Bay, with 80 percent of it coming from the pot of money he created through a pair of Energy Department grants in his final term in office, records and interviews show.

Experts in federal earmarking — a practice of financing pet projects that has been forsaken by many members of Congress as a toxic symbol of political abuse — said they could not recall a case in which a former lawmaker stood to benefit so directly from an earmark he had authorized. Mr. Delahunt’s firm is seeking a review of the arrangement from the Energy Department.

Mr. Delahunt’s work for the town raises legal and ethical questions, mainly because of federal restrictions on the use of federal funds for lobbying, several legal experts said.

Beyond the town of Hull, Mr. Delahunt’s clients include at least three others who received millions of dollars in federal aid with his direct assistance while he was in Congress, records show.

Mr. Delahunt declined repeated requests for an interview last week. In a statement released through his office on Friday, he also declined to respond to specific questions about his work, but said: “I want to be clear — I have no federal lobbying relationship with any past or current client. I have not lobbied anyone in Washington since leaving Congress.

“Further, while in Congress, I had no conversations with anybody regarding any future consulting contract,” he said, “and I am extremely proud of our work and the assistance we were able to bring to many communities throughout our district.” Federal law prohibits former congressmen from lobbying some ex-colleagues for one year after leaving office.

Mr. Delahunt was a natural choice for the job, said Philip E. Lemnios, town manager for Hull, because he was familiar with the stalled project and did impressive work getting the seed money for it while in Congress. The town now hopes to get $60 million or more in federal, state and private funds for four offshore wind turbines that might someday power the entire town and serve as a model for other towns.

“Obviously he’s got connections into the federal government that we don’t have,” Mr. Lemnios said in an interview. “We’re hoping he can open doors at the federal level that we could never open.”

An affable New Englander known for close ties with Republicans as well as fellow Democrats, Mr. Delahunt, 70, has quickly established himself as a go-to lobbyist in the Boston-Washington corridor.

He has capitalized on relationships he developed with many Massachusetts groups in his 14 years representing one of the state’s most affluent districts, which includes Cape Cod and Martha’s Vineyard.

The Mashpee Wampanoag tribe, for instance, paid the Delahunt Group at least $40,000 to lobby for approval of a casino. Mr. Delahunt had secured Congressional earmarks for the tribe totaling $400,000 in 2008 and 2009 for a substance abuse program and other projects, the records show.

The city of Quincy, Mass., meanwhile, brought on Mr. Delahunt last year to help deal with federal officials on a downtown redevelopment program. In 2008, Mr. Delahunt secured nearly $2.4 million in earmarks for the city on a separate tidal restoration project.

And a fishermen’s group on the elbow of Cape Cod hired Mr. Delahunt to navigate regulatory issues; he had helped the group get a low-interest, $500,000 federal loan in 2010, records show. The group, which thanked Mr. Delahunt, then a congressman, for his help getting the loan, used the money to renovate a historic coastal home as its headquarters.

“Bill was an ally of small boat fishermen in Massachusetts, absolutely,” said John Pappalardo, chief executive of the group, the Cape Cod Commercial Hook Fishermen’s Association.

After Mr. Delahunt left Congress, the fishermen’s group hired him “to get the lay of the land politically” about possible changes in federal and regional fishing policies, Mr. Pappalardo said. The group paid the Delahunt Group $14,000 last year for its work, according to lobbying records filed in Massachusetts.

“He was sort of like an emissary,” Mr. Pappalardo said in an interview.

With nearly 400 former members of Congress hired as lobbyists or corporate “consultants” in the last decade, it has become commonplace for ex-members to work for groups or industries that they had helped get financing while in office.

For example, former Senator Rick Santorum of Pennsylvania, who is seeking the Republican nomination for president, has drawn criticism over possible conflicts stemming from his earmarks. After leaving the Senate, he was paid $65,000 in consulting fees from a lobbying shop that represented clients he had helped with earmarks.

Mr. Delahunt’s financial connections to the energy project are much more direct, however.

“That’s not something I’ve ever heard of,” Kenneth A. Gross, a Washington lawyer who specializes in political ethics issues, said when asked about a former congressman receiving fees from earmarks he appropriated.

Several issues could influence whether the unusual arrangement was considered illegal or unethical, Mr. Gross and other ethics lawyers said.

Questions include whether Mr. Delahunt knew that he might go work for the town at the time he requested the earmarks; whether federal funds were being used to “lobby” Congress in violation of federal restrictions; which federal officials Mr. Delahunt’s firm contacted as part of its work; and whether those contacts fell within the one-year “cooling off” period.

Barney Keller, communications director for the Club for Growth, an influential conservative group in Washington that tracks earmarks, said: “I cannot recall such an obvious example of a member of Congress allocating money that went directly into his own pocket. It speaks to why members of Congress shouldn’t be using earmarks.”

Mr. Delahunt, a former district attorney who was known in Congress for embracing liberal causes, also became known over his time in Washington for bringing home federal money. He was particularly active in 2009, ranking in the top fifth of all House members, with more than $46 million in earmarks, including the Hull and Mashpee tribe grants, according to data from the Center for Responsive Politics, a nonprofit research group in Washington.

On retiring in early 2011, he told home-state reporters that he was hesitant to go the typical route of lobbying. But within a few months he did just that, starting the Delahunt Group, where he serves as chairman. He brought in three top congressional aides to help lead it and set up four offices in Massachusetts and Washington, and joined with a national law firm and another lobbying shop as well.

“This is nowhere as stressful as being a congressman,” he told The Cape Cod Times last June as he showed off the firm’s new office on the cape.

But he rejected any suggestion that he was cashing in on his time in Congress. “To say that former members wouldn’t use the skill set they developed, particularly if they are passionate about the interests of their clients, I really think is wrong-headed,” he told the newspaper.

But concerns about possible financial conflicts have already slowed the Delahunt Group’s work on the wind energy project in Hull.

Executives at Mr. Delahunt’s firm have been working informally on the energy project for several months, attending meetings and offering guidance, and they are expected to meet with “key federal and state officials” and provide advice on securing grants for the project, according to a draft of the $15,000-a-month contract.

But the town and the Delahunt Group have delayed signing a formal contract for at least a few weeks. They want to first make certain that Energy Department officials have no concerns about Mr. Delahunt’s unusual dual roles in earmarking the money for the project and now getting paid as a consultant to work on it, according to Mr. Lemnios, the Hull town manager, and Mark Forest, the Delahunt Group’s executive director.

“So far, they don’t have an issue with it,” Mr. Lemnios said. “But it would be a natural thing for people to think there might be a conflict of interest, and if people do have questions about a conflict, we want to be able to address that.”

8/6/11 A look at the numbers....



August 6, 2011

U.S. government support for renewable energy may plunge from record levels, setting back the use of wind and solar power before they can compete on their own with oil, gas and coal.

Direct spending, tax breaks and research funding pushed federal renewable-energy subsidies to $14.7 billion in 2010, according to Alan Beamon, director of the Energy Information Administration’s Office of Electric, Coal, Nuclear and Renewables Analysis. Project developers are lining up for subsidies approved in the 2009 stimulus bill as incentives expire and the deficit-reduction deal dims prospects for future backing of solar panels and wind farms.

“The debt agreement, which is focused on cuts only and not revenue increases, makes it more likely that this infant sector gets strangled before it matures,” Daniel J. Weiss, a senior fellow at the Center for American Progress, a Washington policy group that advises Democrats, said in an interview with Bloomberg Government.

The deal on a debt-limit increase that Congress and President Barack Obama struck to avert a U.S. default would result in at least $2.1 trillion in spending cuts, according to the Congressional Budget Office. Additional savings of at least $1.2 trillion would come from enactment of a deficit-reduction bill or from automatic spending cuts if Congress fails to accept a package framed by a 12-member panel.

Direct Pressure

“The potential lapse of key subsidies at the end of 2011 puts the pressure all the more directly on the clean-energy sector to drive down costs and become more competitive between now and then,” according to a Dec. 13 report by Bloomberg New Energy Finance.

The Treasury Department has paid out $7.78 billion in grants to developers of wind, solar, biomass and geothermal energy under an incentive that was created in the stimulus bill and lapses at the end of the year. Tax credits for wind, solar and geothermal projects end in 2012 and 2016.

“I will be working hard to preserve renewable energy incentives, but it will be more difficult to do so going forward, and that is one reason I opposed the deficit deal,” Senator Robert Menendez, a New Jersey Democrat, said in an e- mail. “Oil company incentives do not sunset, but renewable incentives do.”

Government aid for renewable energy is up from $5.12 billion in 2007, according to the EIA. Subsidies are expected to decline beginning this year, and will fall 77 percent by 2016 from the record in 2010, according to the White House Office of Management and Budget.

Tax Credits

The expiring grants from the Treasury filled a void in project financing that followed the collapse of Lehman Brothers Holdings Inc. three years ago. The grants were offered after the recession sapped demand in the tax equity market, where tax credits earned by solar and wind project developers could be sold to companies seeking to reduce their tax burden.

The tax credits also will expire unless Congress approves an extension. The production tax credit, used mainly by wind- farm developers, runs out at the end of 2012. The investment tax credit, which goes primarily to solar and geothermal projects, ends in 2016.

“The truth is that paying equity subsidies for green energy is expensive,” Kevin Book, managing director at ClearView Energy Partners LLC, a Washington-based policy analysis firm, said in an interview. “Who will be the strong voice to defend credits, and which credits get defended?”

Other subsidies for energy, which go both to renewable sources and oil and gas, may also be targeted by the congressional debt-reduction panel.

Tax Code

Written into the federal tax code are benefits valued at $24.2 billion for renewable energy and efficiency incentives through 2014, compared with an estimated $17.9 billion for the oil, gas, and coal industries, according to a December report by the congressional Joint Committee on Taxation.

“We’ve only just started supporting renewable energy,” Ellen Vancko, manager of the Nuclear Energy and Climate Change Project at the Cambridge, Massachusetts-based Union of Concerned Scientists, said in an interview. “We need to allow these technologies to mature so they don’t need subsidies.”

Globally, government spending on renewable energy peaked last year at $74.5 billion and will decline to $68 billion this year before dropping to $21.4 billion in 2013, according to New Energy Finance.

In the U.S., the 2009 stimulus bill provided $65 billion for clean energy, including loan guarantees for solar and wind power, funding for state programs to help make homes more energy efficient, research into battery-powered cars and trucks and systems to capture carbon dioxide from power-plant emissions. The bill also created the Treasury grant program.

Spent by Mid-2012

By the end of last year, the U.S. had spent 36 percent of the $65 billion, according to Stephen Munro, an analyst with New Energy Finance in Washington. By mid-2012, all the money should be spent.

About $34 billion in stimulus funds will be spent on clean energy this year, up from $13 billion in 2010, Munro said. The remainder, about $18 billion, will be delivered by July 2012 as continued disbursements for Treasury grants and accelerated depreciation for renewable technologies, he said.

Projects that begin construction this year can qualify for a Treasury grant. Payments under the program, made when the renewable power source goes into service, are expected to reach a high of $4.26 billion this year and end in 2016 with $620 million in outlays, according to the White House Office of Management and Budget.

The grant program was extended through this year in a December 2010 tax deal.

‘Political Football’

“The Treasury grants are very vulnerable in the current fiscal mood and the production tax credit has always been a political football,” said Nathanael Greene, director of renewable energy policy at the Natural Resources Defense Council in New York. “Wind energy has the most at stake right now. Expiry of the credits would put a lot of people on the street.”

The stimulus bill also included $6 billion for Department of Energy loan guarantees to back renewable projects, a figure later reduced to $2.5 billion. The department said in May it stopped work on a loan guarantee for Cape Wind off of Massachusetts because there wasn’t enough money for all applicants. The first U.S. offshore wind farm is projected to cost $2.6 billion. Funding for the loan guarantee program fell to $170 million in the current budget.

About 75,000 jobs in the U.S. are in the wind-power industry, according to Denise Bode, chief executive officer of the American Wind Energy Association, a trade group in Washington.

Current wind “projects are safe, and prospects for extension of the program beyond 2012 are as good as ever,” Bode said in an e-mail. “I had a front-row seat to tax reform in the mid-1980s, and I feel confident that wind incentives will survive this process.”