Abengoa – monoblogue

Rooftop solar companies will only play if the game is stacked in their favor

Commentary by Marita Noon

The past couple of weeks have highlighted the folly of the energy policies favored by left-leaning advocacy agencies that, rather than allowing consumers and markets to choose, require government mandates and subsidies. Three major, but very different, solar entities – that would not exist without such political preference – are now facing demise. Even with the benefit of tax credits, low-interest loans, and cash grants that state and federal governments have bestowed on them, the solar industry is struggling.

We’ve seen Abengoa – which I’ve followed for years – file for bankruptcy.

Ivanpah, the world’s biggest solar power tower project in the California desert, is threatened with closure due to underperformance.

Then there is SunEdison, the biggest renewable energy developer in the world. It’s on the verge of bankruptcy as its stock price plunged from more than $30 to below $.50 – a more than 90 percent drop in the past year.

All of these recent failures magnify the solar industry’s black eye that first swelled up nearly five years ago with the Solyndra bankruptcy.

Worried about self-preservation, and acting in its own best interest – rather than that of consumers specifically, and America in general – industry groups have sprung up to defend the favored-status energy policies and attack anyone who disagrees with the incentive-payment business model. Two such groups are TASC and TUSK – both of which are founded and funded by solar panel powerhouses SolarCity and SunRun with involvement from smaller solar companies (SolarCity recently parted ways with TASC).

The Alliance for Solar Choice (TASC) is run by the lead lobbyists for the two big companies – both have obvious Democrat Party connections.

Bryan Miller is Senior Vice President, Public Policy & Power Markets at Sunrun (a position he took in January 2013) and is President and co-chair of TASC (May 2013). His LinkedIn page shows that he’s worked for the National Finance Committee for Obama for America and was Finance Coordinator/Field Organizer for Clinton-Gore ’96. He’s also served as s senior political appointee in the Obama Administration and ran an unsuccessful 2008 bid for election to Florida’s House of Representatives, District 83.

Co-chair John Stanton is Executive Vice President, Policy & Markets at SolarCity. In that role, he, according to the company website, “oversees SolarCity’s work with international, federal, state and local government organizations on a wide range of policy issues.” Previously, Stanton was Executive Vice President and General Counsel for the Solar Energy Industries Association (SEIA) – the national trade association for industries that support the development of solar power – with which he oversaw legal and government affairs for the association. There he played a pivotal role in the 8-year extension of the solar investment tax credit. He was also legislative counsel for the Environmental Protection Agency under the Clinton administration.

A news report about the founding of TASC states: “First and foremost, the group will work to protect net-energy metering (NEM) rules in the 43 states that have them.”

On March 25, the Wall Street Journal reported: “two dozen states are weighing changes to their incentives for rooftop solar…incentive payments have been the backbone of home solar firms’ business model.” In the past several months, Nevada and Hawaii have ended their NEM programs. TASC has responded with lawsuits. In Hawaii, TASC’s case has already been dismissed with a report stating: the judge’s “ruling in favor of the Defendants has eviscerated TASC’s claims.” Last year, Louisiana capped its “among the most generous in the country” solar tax credit. Arizona Public Service was the trailblazer in modifying generous solar policies when, in 2013, the Arizona Corporation Commission approved a fixed charge for solar customers.

As one of the first states to challenge the generous NEM policies, Arizona is still a battleground. That’s where TASC formed another group: TUSK – which stands for Tell Utilities Solar won’t be Killed. Lobbyist and former U.S. Congressman Barry Goldwater, Jr. was brought in to give a Republican face to the industry’s advocacy. TUSK even has an elephant, the Republican mascot, as part of its logo. The TUSK home page states: “Republicans want the freedom to make the best choice and the competition to drive down rates” – true, but a core value of the Republican Party is allowing the free markets to work rather than governments picking winners and losers.

While registered in Arizona, TUSK has recently been active in other states – including Nevada, Oklahoma, and Michigan.

The reoccurring theme in the TASC/TUSK campaign is to connect the word “kill” with “solar” – though the NEM modification efforts don’t intend to kill solar. Instead, they aim to adjust the “incentive payments” to make them more equitable. However, without the favors, as was seen in Nevada, rooftop solar isn’t economical on its own. Companies refuse to play when the game is not stacked in their favor.

TASC and TUSK are just two of the ways the rooftop solar industry – also known as a “coalition of rent seekers and welfare queens,” as Louisiana’s largest conservative blog, The Hayride, called them in the midst of that state’s solar wars – is trying to protect its preferential policies. It has other tricks in its playbook.

In addition to the specific industry groups like TASC, TUSK and SEIA, third party organizations like the Energy and Policy Institute (EPI) are engaged to intimidate public officials and academics. EPI, run by Gabe Elsner, is considered a dark money group with no legal existence. It can be assumed to be an extension of what is known as the Checks & Balances Project (CB&P) – which was founded to investigate organizations and policymakers that do not support government programs and subsidies for renewable energy. CB&P has received funding from SolarCity. Elsner joined CB&P in 2011 – where he served as Director – and then, two years later, left to found EPI – which C&BP calls: “a pro-clean energy website.” EPI produces material to attack established energy interests and discredit anyone who doesn’t support rooftop solar subsidies. I have been a target of Elsner’s efforts.

Then there is the Solar Foundation – closely allied with SEIA and government solar advocacy programs – which publishes a yearly report on solar employment trends across the country. Solar employers self-report the jobs numbers via phone/email surveys and the numbers are, then, extrapolated to estimate industry jobs nationwide. Though the reports achieve questionable results, threats of job loss have proven to be an effective way to pressure state and federal lawmakers to continue the industry’s favorable policies – such as NEM.

Together, these groups have a coordinated campaign to produce public opinion polling that is used to convince politicians of NEM’s public support. Such cases can be found in Maine, Nevada, New Hampshire, Colorado, and Kansas. They gather signatures from solar advocates and use them to influence legislators and commissioners. They engage in regulatory and rate proceedings – often creating, as I’ve experienced, an overwhelming presence with mob-like support from tee-shirt-wearing, sign-waving advocates. They run ads calling attempts to modify solar’s generous NEM policies a “tax” on solar and, as previously mentioned, attack utilities for trying to “kill solar.” If this combined campaign isn’t fruitful, and NEM policies are changed, lawsuits, such as those in Hawaii and Nevada, are filed.

This policy protection process may seem no different from those engaged by any industry – as most have trade associations and advocacy groups that promote their cause. Remember “Beef, it’s what’s for dinner” and “Pork, the other white meat”? Few are truly independent and self-preservation is a natural instinct.

Yes, even the fossil fuel industry has, for example, the American Petroleum Institute, the Independent Petroleum Association of America, the National Mining Association, and the American Coalition for Clean Coal Electricity. And there are advocacy groups who support various limited-government, free-market positions, as Miller recently accused.

The difference is that fossil fuels provide, and have been providing, America with efficient, effective, and economical energy. Its abundance has lowered costs for consumers and increased America’s energy security. Advocates are not fighting for special favors that allow this natural resource to survive, but are rather attempting to push back on new rules and regulations aimed at driving it out of business.

By comparison, the solar advocacy efforts are, as acknowledged by TASC: “First and foremost, the group will work to protect net-energy metering (NEM) rules,” as without them – and the other politically correct policies – rooftop solar energy doesn’t make economic sense. Because rooftop solar power isn’t efficient or effective, its major selling point is supposed savings that are achieved for a few, while costing all tax- and rate-payers.

With the potential of a change in political winds – remember the solar supporters all seem to be left-leaning, big government believers who want higher energy prices – the campaign for America’s energy future is embedded in the presidential election.

Will big government pick the winners and losers, or will free markets allow the survival of the best energy sources for individual circumstances?

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column. Follow her @EnergyRabbit.

Trying to make winners out of losers

Commentary by Marita Noon

By now, most people probably know about one of Secretary Hillary Clinton’s biggest campaign gaffes to date: “we’re going to put a lot of coal miners and coal companies out of business.” As soon as I heard it, I tweeted: “Imagine a presidential candidate running for office based on putting people out of work?”

I wasn’t the only one shocked by the uncharacteristic clarity of her statement. Lacking the usual political-speak, her comments were all the more surprising in that they were not made at a fundraiser in billionaire environmental donor Tom Steyer’s posh San Francisco living room. They were made in Ohio – coal country, where coal production in 2015 was down 22 percent – at a nationally televised CNN town hall and just hours before the important state’s primary election.

In response, Christian Palich, President of the Ohio Coal Association sent this: “Hillary Clinton’s callous statements about coal miners, struggling under the weight of a hostile administration, are reprehensible and will not be forgotten. The way Secretary Clinton spoke so nonchalantly about destroying the way of life for America’s coal families was chilling. Come tomorrow, or next November, Ohioans in coal country will vote to keep their jobs and not for the unemployment line.”

US News reports that Democrats in the coal states of Wyoming, West Virginia, Kentucky, and Ohio have tried to “distance themselves from Clinton’s comments.” Former Ohio Governor Ted Strickland, a Clinton ally who handily won his party’s primary election for Senator, called her slip, “unartful.” Senator Joe Manchin (D-WV), who, last April, endorsed Clinton, took issue with her comments and contacted her campaign.

Facing the backlash, and in damage-control mode, Clinton sent a letter to Manchin: “Simply put, I was mistaken.”

But was she? I don’t think so.

Though her comments may have been “unartful” and, arguably, poorly timed, I believe they reflect private conversations and campaign strategy. It may be no coincidence that rumors of President Obama’s tepid support for Clinton – though the White House denies endorsing her – surfaced after her killing coal comments.

First, it is clear that Clinton needs President Obama’s endorsement. She needs him to generate excitement for her lackluster campaign – something Democrat voters are not feeling for her as they did for him. She needs his campaign machine to get out the votes.

But, he needs her just as much – his legacy hangs on her election. Because so much of what he’s done has been by executive action, his legacy can just as easily be undone – as every remaining Republican candidate would likely do. Obama is, reportedly, committed to “a hard campaign of legacy preservation.” He is ready to “raise money to fill Democratic coffers and target the key communities that would make up a winning coalition for the party, including blacks, Latinos, educated single women and young voters, to encourage them to go to the polls.”

Following the voluntary climate agreement in Paris, Politico stated: “Barack Obama wants to be remembered as the president who saved the world from climate change.” For this legacy to stick, all of his anti-fossil fuel policies must stay intact. To get his endorsement, a Democrat presidential candidate must embrace what he started and promise to “build upon President Obama’s legacy of environmental protections and climate action,” as Clinton has.

While Obama frequently claims to support an “all of the above” energy policy, actions speak louder than words. From his 2009 stimulus bill throwing billions at speculative green energy projects, his killing coal efforts, his stand that we can’t drill our way to low gas prices, his rejection of the Keystone pipeline, and his threat to veto a bill to lift the oil export ban – just to name a few – he obviously meant “none of the below.”

The White House denies a “war on coal.” In December, after the Paris climate agreement was signed, former Deputy Assistant to the President for Energy and Climate Change, Heather Zichal, defended Obama’s green platform: “Nobody’s screaming that their energy bills are on fire; jobs have not been lost.”

Bill Bissett, President of the Kentucky Coal Association called Zichal’s comments: “insulting and inaccurate.” He told me: “The Obama Administration and its allies have an intentional blind spot to the economic and social damage that their anti-coal policies are causing in the United States and especially in coal country. The top coal producing states in our nation not only benefit from the extraction of coal, but all of us benefit greatly from having low kilowatt-per-hour rates. But that economic advantage is eroding as Obama does everything in his power, and against the will of Congress, to move the United States away from coal production and use.” He added: “More than 8,000 Kentucky coal miners have lost their jobs since Obama took office and countless other Kentuckians have lost their livelihoods through indirect and induced job loss due to his anti-coal agenda. And, yes, our electricity rates are increasing in Kentucky as our country moves away from coal.”

“Ms. Zichal and the administration can spin it any way they like but no one outside of their fringe enviro friends is clamoring for their energy policies,” said Mike Duncan, President of the American Coalition for Clean Coal Electricity.

While much of the electricity price increases associated with the Obama Administration will only be seen later, the fact is, according to an Energy Information Agency data set, the increase in retail electricity prices since 2008 is 12.8 percent.

Clinton’s anti-coal comments got all the press. But she didn’t stop there. Almost under her breath, a few sentences later, she added: “We’ve got to move away from coal and all of the other fossil fuels” – more pandering for Obama’s much needed (and, so far, withheld) endorsement.

But how realistic is the Democrat’s goal of moving away from coal and all the other fossil fuels?

“Unlikely,” according to new research from the University of Chicago. The authors wanted a different answer. Like Clinton, and Obama, they believe fossil fuel use is driving “disruptive climate change” that will lead to “dramatic threats to human well-being” and a “dystopian future.” Reading the 22 pages of the report on their findings, one can almost feel their dismay.

Yet, after discussing “supply theory” – which posits the world will run out of inexpensive fossil fuels – they state: “If the past 35 years is (sic) any guide, not only should we not expect to run out of fossil fuels anytime soon, we should not expect to have less fossil fuels in the future than we do now. In short, the world is likely to be awash in fossil fuels for decades and perhaps even centuries to come.” Complicating matters, the authors acknowledge: “a substantial penetration of electric vehicles would reduce demand for oil. Provided that the supply curve for oil is upward sloping (as it is in almost all markets), this drop in demand would translate to lower oil prices, making gasoline vehicles more attractive.”

Then, on “demand theory” – the economy will stop demanding fossil fuels as alternatives become more cost competitive – they lament: “In the medium-run of the next few decades, none of these alternatives seem to have the potential based on their production costs (that is without the government policies to raise the costs of carbon emissions) to reduce the use of fossil fuels below these projections.” Additionally, they conclude: “Alternative sources of clean energy like solar and wind power, which can be used to both generate electricity and to fuel electric vehicles, have seen substantial progress in reducing costs, but at least in the short- and middle-term, they are unlikely to play a major role in base-load electrical capacity or in replacing petroleum-fueled internal combustion engines.”

While the authors support “activist and aggressive policy choices…to drive reductions in the consumption of fossil fuels and greenhouse gas emissions,” they reluctantly admit the proposed solutions are not apt to be the answer they seek. “Even if countries were to enact policies that raised the cost of fossil fuels, like a carbon tax or cap-and-trade system for carbon emissions, history suggests that technology will work in the opposite direction by reducing costs of extracting fossil fuels and shifting their supply curves out.”

Perhaps, before Clinton – who accuses anyone who doesn’t agree with her climate alarmist view as ignoring the science – makes mistakes, like declaring that she’ll put coal miners and coal companies out of business, she should check the science behind her claims to “move away from coal and all the other fossil fuels.”

Making her March 13 comments seem even more foolish, the following days cast a shadow over the specter of funding more speculative solar power, as she’s proposed to do. Three stimulus-funded solar failures made big headlines.

On Wednesday, March 16, the Wall Street Journal (WSJ) announced that the massive $2.2 billion ($1.5 billion in federal loans according to WSJ, but other research shows more) Ivanpah Solar Electric Generating System may be forced to shut down because it has failed to produce the expected power. What it has produced: “fetched about $200 a mega-watt hour on average during summer months,” while “power from natural-gas plants went for $35 a mega-watt hour on average in California’s wholesale market.”

On the same day, SunEdison’s troubles worsened. After the company acquired stimulus-funded First Wind last year, it became “the leading renewable energy developer in the world.” Now, its “mounting financial woes” resulted in another delay to the filing of its annual reports. The company’s stock, according to WSJ, has “lost 67% over the past three months and 91% over the past year.” It “slid another 16% to $1.73 in premarket trading.”

The next day, March 17, the New York Times declared that Abengoa, the Spanish company hailed as “the world leader in a technology known as solar thermal, with operations from Algeria to Latin America” has gone from “industry darling to financial invalid.” I’ve written repeatedly on Abenoga – which is on the verge of becoming “the largest bankruptcy in Spanish corporate history.” Note: Abengoa was the second largest recipient of U.S. taxpayer dollars – more than $3 billion – from the green energy portion of Obama’s 2009 stimulus package.

It appears Clinton’s energy policies are aimed at trying to make winners out of losers. How can she help it? That is what the Democrat Party is trying to do with her.

Hopefully, voters know better. But then, as the University of Chicago’s study’s closing words remind us: “hope is too infrequently a successful strategy.”