Fascinating Insight into the Corporate State
This story is from the WSJ, and gets extra bonus points for including the poster-boy of the corporate state, Jeffrey Immelt
Treasury and OMB singled out an 845-megawatt wind farm that the Energy Department had guaranteed in Oregon called Shepherds Flat, a $1.9 billion installation of 338 General Electric turbines. Combining the stimulus and other federal and state subsidies, the total taxpayer cost is about $1.2 billion, while sponsors GE and Caithness Energy LLC had invested equity of merely about 11%. The memo also notes the wind farm could sell power at "above-market rates" because of Oregon's renewable portfolio standard mandate, which requires utilities to buy a certain annual amount of wind, solar, etc.
But then GE said it was considering "going to the private market for financing out of frustration with the review process." Anything but that. The memo dryly observes that "the alternative of private financing would not make the project financially non-viable."
Oh, and while Shepherds Flat might result in about 18 million fewer tons of carbon through 2033, "reductions would have to be valued at nearly $130 per ton CO2 for the climate benefits to equal the subsidies (more than 6 times the primary estimate used by the government in evaluating rules)."
So here we have the government already paying for 65% of a project that doesn't even meet its normal cost-benefit test, and then the White House has to referee when one of the largest corporations in the world (GE) importunes the Administration to move faster by threatening to find a private financial substitute like any other business. Remind us again why taxpayers should pay for this kind of corporate welfare?
First, the moment GE said that this could be financed privately, the Feds should have said "then what the f*ck are you talking to us for? Get out of here." By the way, privately probably does not mean privately -- it probably means going to private banks or investors who in turn access many of the same taxpayer funds.
Second, its amazing that the threat to finance this privately rather than sponging off taxpayer funds is treated as a threat by the Obama Administration. They desperately want to "take credit" for the project and can only do so by spending our money (this is the same impulse that propels politicians who have never given a dime to charity to want to spend taxpayer money in order to be called "caring.")
