Taxpayer-Funded Wind Farms Prompt Concern from Democrats and Republicans; Jobs for China?

December 28, 2009 - 10:29 AM
Two New York Democrats – Sen. Chuck Schumer and Rep. Eric Massa – are among the lawmakers criticizing specific wind projects that are getting hundreds of millions in taxpayer subsidies.

The New Mexico National Guard's wind turbine at the Guard's headquarters compound in Santa Fe, N.M. The Guard is making energy conservation the focus of a mission for all its units statewide. (AP Photo/Sue Major Holmes)

(CNSNews.com) – Wind-power projects funded in part by the $787-billion Recovery Act (stimulus law) are coming under scrutiny at a time when President Obama and other Democrats have promoted alternative forms of energy production.
 
Two New York Democrats – Sen. Chuck Schumer and Rep. Eric Massa – are among the lawmakers criticizing specific wind-power projects that are getting hundreds of millions in taxpayer subsidies.  
 
A “definitive agreement” was reached on one of those projects two weeks ago, according to a Dec. 20 news release from the Austin, Texas-based Cielo Wind Power. The deal is between Cielo, U.S. Renewable Energy Group and China-based Shenyang Power Group.
 
The $1.5 billion project – which is getting $450 million in stimulus funds – is supposed to create 2,000 to 3,000 jobs. The problem is, most of those jobs will be in China, Sen. Schumer said, because that’s where the wind turbines will be constructed. Another 300 temporary jobs will be created in Texas.
 
“I’m all for investing in clean energy, but we should be investing in the United States, not China,” Schumer wrote in a Nov. 5 letter to Energy Secretary Steven Chu. “The goal of the stimulus was to spur job creation here, not overseas. This project should not receive a dime of stimulus funds unless it relies on U.S.-manufactured products,” the senator wrote.
 
The Cielo wind farm in West Texas is supposed to cover 36,000 acres and generate enough electricity to power up to 180,000 American homes each year.
 
Cielo Wind Power President Walt Hornaday, in a Nov. 10 statement, insisted that the project will grow the U.S. economy and would not be possible without federal assistance.
 
“A project of this scale will not only create hundreds of on-site construction and operational jobs, but it will also benefit a network of engineers, suppliers, and contractors all around the U.S. who will see hundreds of millions of dollars in additional work,” Hornaday said.
 
“Cielo plans to draw on the same American contractors from North Dakota to New York and New Mexico to California who have contributed to its past 10 wind projects. This planned project is an economic development lifeline to the wind industry during tough economic times.”
 
Hornaday did not deny Schumer’s assertions that most of the jobs would be created in China. However, a Cielo staff member told CNSNews.com last week that none of the stimulus funds (taxpayer money) would be used to pay workers in China. However, the spokesman declined to say any more about the project than has already been discussed in news releases.
 
Sen. Christopher “Kit” Bond (R-Mo.) also wrote a letter to Energy Secretary Chu: “There is bipartisan concern that the Obama administration is using U.S. taxpayer dollars to fund green jobs in China and other foreign countries,” Bond wrote on Nov. 12. “As U.S. unemployment tops 10% during this time of economic distress for America’s families and workers, we must ensure that our government is not using American taxpayer dollars to create more green jobs in China than in the U.S.”
 
On another front, a Newton, Mass.-based company called First Wind reportedly is getting $115 million in stimulus funds to build wind farms in Cohocton, N.Y. and near Danforth, Maine.
 
Rep. Eric Massa (D-N.Y.) whose district includes Cohocton, had problems with U.S. tax dollars going to what he called “shell companies” for First Wind.
 
In a September letter to President Obama, Massa noted that First Wind is under investigation by the New York Attorney General’s office for alleged corruption. The actual appropriation is going to Canandaigua Power Partners and Canandaigua Power Partners II, subsidiaries of First Wind.
 
“This is one of the most volatile issues in Western New York, and the award of $74.6 million dollars to corrupt companies that have changed names time and again, forming new LLCs and new Inc.s but maintaining their business model of lie, cheat, and corrupt at the expense of taxpayers, has stirred great unrest in New York’s 29th Congressional District,” Massa wrote to the president.
 
Massa spokesman Jared Smith did not return phone calls last week.
 
On July 15, New York Attorney General Andrew Cuomo announced an investigation into the wind power industry. He cited First Wind as one of the two companies from which he had subpoenaed documents.
 
The other was the Essex, Conn.-based Noble Environmental Power. The investigation was to determine “whether companies developing wind farms improperly sought or obtained land-use agreements with citizens and public officials; whether improper benefits were given to public officials to influence their actions, and whether they entered into anti-competitive agreements or practices.”
 
“The use of wind power, like all renewable energy sources, should be encouraged to help clean our air and end our reliance on fossil fuels,” Cuomo said when he announced the probe. “However, public integrity remains a top priority of my office and if dirty tricks are used to facilitate even clean-energy projects, my office will put a stop to it.”
 
The First Wind projects already are up and running. The Cohocton plant began operating in late January, and by the end of September it had produced 133,370 megawatt hours of electricity for the region, First Wind Chief Executive Officer Paul Gaynor said in October.
 
Gaynor also said the New York attorney general is not currently investigating the company. “In fact, we have been advised by the attorney general’s office that we are not under investigation,” Gaynor wrote. “First Wind is proud to be one of the first two companies in New York to have signed a code of conduct with the New York Attorney General that establishes for the first time an industry-wide framework for wind development in New York.”
 
In October, Cuomo announced a new “Wind Industry Ethics Code” and established a multi-agency task force to enforce the rules.
 
An Oct. 30 release from Cuomo’s office said, “Both Noble and First Wind fully cooperated in the inquiry, and their assistance was instrumental in developing the Code of Conduct that is being announced today.”