Energy crony capitalism: More power over your power

Sen Doug Whitsett

by Sen. Doug Whitsett

The United States government guaranteed more than half a billion dollars in loans for the solar-panel manufacturer. Those loans were made during Obama’s $787 billion 2009 American Recovery and Reinvestment Act [“the Stimulus”] spending spree.

Solyndra’s new, and previously commercially untested, cylindrical photo-voltaic technology was subsequently alleged to be only about 8.5 percent efficient. That lack of effectiveness means that as many as 12 of their solar panels were required to produce the amount of electricity the company claimed each solar panel would generate.

Regrettably for the United States taxpayer, the alleged gross inefficiency was not made public until after the loans were guaranteed, and until after the company’s massive desert generation plants were under construction. Solyndra filed for bankruptcy protection two years later, in 2011.

U.S. taxpayers have still not been repaid for the more than half-billion dollar loan guarantee losses. The likelihood of ever being repaid a single dollar appears dismal.

The inefficiency of solar generation is not limited to the failed Solyndra technology.

According to the Oregon Public Utility Commission, more than a thousand solar installations in the state have been funded by Energy Trust of Oregon (ETO). The average efficiency of those solar installations is only about 12 percent. In that statewide experiment, paid for with other peoples’ money, about eight solar panels are required to actually generate the capacity claimed for a single solar panel.

The ETO is funded by a surcharge on utility ratepayers’ bills. That $165 million annual hidden tax on renewable energy is raised by the three percent “public purpose charge” found as a line item charge on your investor-owned utility bills.

Speculating with other peoples’ money, in high risk investments, appears to be much less stressful than risking your own money. The Obama administration has taken that speculation to a new art form.

Even after it was apparent that Solyndra was in deep financial trouble in 2010, the Obama administration made a five times-larger loan guarantee to Aboengoa SA. That Spanish international energy company received total loan guarantees exceeding $2.65 billion to build massive solar installations in Arizona and the Mojave Desert.

Obama said “it is good news that we’ve attracted a company to our shores to build a plant and create jobs right here in America.”

Utilities are often forced, by state and federal laws, to buy solar power, in order to meet their government-mandated renewable energy requirements. California and Arizona utilities signed long-term contracts to purchase Abengoa-generated solar power. They undoubtedly paid significantly more than average market prices for their government-mandated purchase of renewable power.

Those higher prices are always passed on to utility ratepayers because they are considered “prudently incurred costs” that utilities are allowed to recover from their customers. The costs are only “prudent” because they are mandated by government laws and regulations.

Nevertheless, even with a government-mandated captive market, it appears Abengoa has been in deep financial distress for more than a year. Its stock prices had plummeted by half since last April.

Abengoa’s stock price fell another 50 percent November 25 on the day the Company filed for preliminary credit protection. That action is generally considered to be the first step in bankruptcy proceedings.

The value of the company’s corporate bonds have apparently fallen to near junk-bond status. They were recently valued at about 12 cents on the Euro.

It now appears that US taxpayers may soon be “on the hook” for another $2.5 billion in failed renewable energy loans.

The fact of the matter is that the inefficient and costly generation of electricity by photo-voltaic panels is not an economically viable energy alternative. Nor will it become cost effective using currently available technology.

Massive government subsides through loan guarantees, accelerated depreciation, utility bill surcharges, feed-in tariffs and both refundable tax credits for facility construction and tax credits for the energy produced have not changed that reality. Even the government-forced purchase of solar power, at significantly more than market rates, cannot sustain these bad investments.

Prudent free market capitalists normally will not support such investments. They recognize that virtually all of the value of such companies is dependent upon the value of ongoing government subsidies and tax credits.

They know that both the fabrication and the dissolution of those subsidies are a function of government, over which they have little control. Those who do choose to invest understand the importance of maintaining close and favored relationships with the politicians and bureaucrats who create and distribute the subsides, credits and other “incentives.”

Energy prices should be established by allowing the free market to select the least-cost, cleanest form of energy production. Today, that source is abundant, inexpensive and clean-burning natural gas.

The market-driven escalation of natural gas usage has been the primary factor in reducing U.S. greenhouse gas emissions to pre-1990 levels. In fact, it has reduced our national share of global greenhouse gas emissions by nearly half.

So why are our government leaders so intent on replacing successful free-market competition with regulatory controls designed to advance certain favored industries?

Our state and federal government leaders are not ignorant people. However, many of them do have a shared agenda. Their apparent purpose is to advance international socialism by promoting and employing the fear of global climate change.

The United Nations (UN) is their vehicle of choice to establish a one world socialist government. The scope of that international effort was first introduced at the 1992 Rio Earth Summit.

Since then, similar conferences have been held all over the world in promotion of the same goals.

Their focus is to convince the people they must abandon capitalism, as well as foregoing many of their inherent freedoms, in order to avoid “dangerous anthropogenic interference with the climate system.” That international anti-capitalism coalition now counts nearly 200 parties.

An Annual Conferences of Parties (COPs) has been convened to advance the global anti-capitalism agenda. COP21 is the 2015 Paris Climate Conference currently being attended by an expected 25,000 official delegates. They include UN agencies, non-government organizations, intergovernmental organizations and leaders of world governments, including our President and representatives of Governor Kate Brown’s office.

COP21 is structured to be the international tipping point to adopt global socialism. For the first time in over 20 years of COP’s and other United Nations negotiations, this year’s agenda aims at achieving a universal and legally binding agreement on “climate.” That agreement is designed and intended to ring a global “death knell” for free market capitalism.

Ironically, their methodology of choice employs blatant crony capitalism, including subsidies and tax credits such as those made available for Solyndra, Abengoa SA and Solarcity. It should be no surprise that many such international companies are strong supporters of the climate change agenda, as well as the politicians and bureaucrats who have created and sustained the international scheme.

Senator Doug Whitsett is the Republican state senator representing Senate District 28 – Klamath Falls