THE GREAT GORDOON WANTS AMERICAN TAXPAYERS TO ENRICH AND PROTECT FOREIGN COMPANIES
Another Tasty Cape Wind Morsel - Cho on This
Who would be foolish enough to believe Jim Gordon now? After thrashing around in Nantucket Sound and the halls of state and federal power Gordon, now known in some quarters as the Great Gordoon, GG for short, has left behind a wake of broken promises, unrealistic projections and political rubble. Since at least 1999 he has been digging a mine shaft into the bedrock of renewable energy in America. So far all he has to show for his efforts is a shaft.
The list of Gordoon's promises and claims is impressive and so far worthless:
- Cape Wind will save every New England electric customer money. In fact Cape Wind's electricty will cost more than double the current market rate per kilowatt and it will increase every year at a compounding 3.5%.
- Cape Wind will cost $650 million to build. This price escalated to $900 million, then to $1.5 billion, then to $2.2 billion and now to $2.6 billion. The actual cost in today's dollars is likely now over $3 billion. When he had a firm contract price proposal at $2.1 billion - $2.2 billion from one of the world's most reputable and competent contractors Gordoon was publicly declaring that Cape Wind would cost $1.5 billion. That contractor is now long gone from the Cape Wind project.
- Cape Wind will spur the development of the offshore wind industry in America. To date Cape Wind is the only offshore wind project to have completed the federal application process. The ambitious wind project touted for the Chesapeake Bay, Delamarva, has been shelved, as have commercial scale wind projects announced for the Gulf of Mexico, the Long Island area and even British Columbia. The cost of the power to be produced is the reason ususally cited.
- General Electric will supply the turbines. The original Cape Wind plan specified 170 units made by Danish wind giant Vestas. Then Gordoon switched to 130 larger G.E. turbines and stuck to this claim for three years after G.E. had announced it was leaving the offshore wind market, that the turbines GG claimed he would use had been discontinued. Now he has identified Siemens as the preferred supplier.
- Cape Wind will create hundreds of clean energy manufacturing jobs. This claim was made with the city of New Bedford, Massachusetts as the alleged recipient of the jobs, then Quincy, Massachusetts and now probably somewhere in Rhode Island - maybe.
- Lehman Brothers will be the lead bank for Cape Wind. Then Lehman failed.
- Barclay's will be the lead bank for Cape Wind. But, Barclay's never completed a loan agreement with GG, nor did they ever pull together a financing syndicate. GG's point man from Lehman's, Teddy Roosevelt IV moved from Lehman's to Barclay's but seems to have been unable to deliver for GG.
- Bank of Tokyo/Mitsubishi will be the lead bank for Cape Wind. As with the first two lead bank announcements, the press release comes from the offices of Cape Wind Associates, not the bank. Whatever agreement underlies the press release, GG still has no money to proceed with Cape Wind. And, GG has never explained why he has selected and then abandoned two other lead banks.
- Cape Wind has selected Mass Tank to build its monopiles. Once again GG made a grand announcement with his usual flourish. This was to signal an ambitious partnership between Mass Tank and the German company EEW, with a manufacturing facility in Massachusetts. Now GG is claiming that he discovered that Mass Tank is too small to do the work, but he has no difficulty in dumping them and dealing directly with EEW.
- Cape Wind will receive of federal loan guarantee. We shall see.
At the very beginning of his campaign to promote Cape Wind the Great Gordoon assured one and all that its power would be needed to satisfy New England's rising demand for electricity. And, we were advised that Gordoon, with his years of experience in such matters, was a credible source for this claim. But, this writer was in attendance at a recent Restructuring Round Table in Boston, Stephen Rourke who is in charge of System planning for Independent System Operator (ISO) New England said that ISO N.E. is projecting a decline in electric demand throughout New England for several years to come --- a decline of 2.5% annually. Should we believe the Great Gordoon or Mr. Rourke.In fact, ISO N.E. in January dated January 3,. 2013 to the Federal Energy Regulatory Commission advised against admitting cape Wind to the forward capacity market (auction) commencing on July 1, 2015 and ending on June 31, 2016. ISO N.E. stated that it believes Cape Wind will not be in commercial in operation in time to participate for that period.Therefore, comes the question: why support what so many do not want and what appears to be unnecessary?
The history of Cape Wind and a possible loan guarantee issued by the U.S. Department of Energy is every bit as convoluted as Cape Wind's history of baseless announcements. What is known is that two years ago, using his considerable influence Democrat fund raiser and lobbyist Gerry Harrington arranged a White House meeting at which no less a personage than Senator John Kerry personally menaced DOE Secretary Dr. Stephen Chu, telling Dr. Chu, this loan guarantee is going to happen. Kerry actually lives in a multi-million dollar town house across the street from GG's multi-million dollar town house on Boston's Beacon Hill. GG himself was at the White House meeting - so was Harrington.
As things stand now Cape Wind will use equipment entirely built outside the United States. Having made grandiose claims about the project's local economic benefits, claims no doubt inspired by the ever scheming Gordoon, Massachusetts Governor Deval Patrick must now face the fact that he, as so many before him, has been had. Rosey claims have thorns in the land of Gordoon. Now, trapped by its own history of some spectacularly bad, large loan guarantees to the likes of Solyndra and under severe scrutiny by Congress, DOE is being pummeled into submission in behalf of this one energy developer....and his foreign suppliers.
Our Department of Energy faces three questions they have as yet been unable to answer satisfactorally:
- Is the Cape Wind Project a good candidiate for a loan guarantee? If it is such a good opportunity for lenders, why is there a request for this loan guarantee? What risks do the lenders see - is Gordoon himself a risk? Is offshore wind too expensive and too unreliable?
- Why should Americans be told they will cover the risks taken by a Japanese bank and European manufacturers? How does this benefit Americans other than GG and his cohorts?
- What about those pesky lawsuits? Would it not be wise to make the loan decision after they have been settled? What reputable lender makes huge loans when the borrower is facing the potential of massive judgments against him or even the revocation of his project permits?
The Obama administration has already suffered embarassment over the Cape Wind loan guarantee issue. It was not long after the fanfare of Interior Secretary Salazar's approval of the project that the DOE withdrew Cape Wind from their list of applications. What has changed in the past two years to make Cape Wind a good bet? Actually, a lot has changed, but not for the better. We have heard so many glowing promises from GG. We have no results to show that he ever intended to keep his word or even that he could if he wanted to. So, if a man's word is no good, how good will his contract be?
COPYRIGHT 2013 by Peter A. Kenney