Five Local Stories To Do Now On The Green Stimulus

Russ Choma

• Email: russ.choma@gmail.com• Web: russchoma.com• Twitter: russchoma

• http://investigativereportingworkshop.org• Founded in Spring 2008 by Charles Lewis and

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•Gamesa•Iberdrola•Vestas•Siemens•Suzlon

Restarting the American Economy

The Takeaway• Foreign Involvement: – At one point, 80 percent of the grants were going to

foreign-owned companies.– Today, about 55 percent of the grants are going to foreign-

owned companies, 65 percent of turbines are foreign built (2,760/4,232)

• How Stimulative Was All This?– 21 of the first 28 wind farms were substantially

constructed before the program was ever opened.– Ten were constructed before the stimulus was ever passed

($582 million worth of grants.)– At least one was generating electricity before Obama was

ever elected.

Biggest Piece of “Green” Law Ever(except for China)

• $72 billion in direct investments and $22 billion in tax incentives for renewable energy, smart grid/transmission, energy efficiency, green vehicles, and green job training.

• Good starting point: http://www.energy.gov/recovery/funding.htm

• Designed for applicants, but provide the most comprehensive list of funding programs, including names and titles that can be used to search on.

Big Two

• Section 1603: A cash grant-in-lieu of tax credits, equal to 30 percent of the cost of investing in a new renewable energy facility.

• 45C Tax Credit: Tax credit worth 30 percent of the cost of investing in a new clean energy manufacturing facility.

• Not the only two:– Weatherization– Research grants

Resources• Recovery.gov• ProPublica’s “Eye On The Stimulus”:

http://www.propublica.org/ion/stimulus• USASpending.gov • Renewable funding:

http://www.energy.gov/recovery/renewablefunding.htm• State and local programs:

http://www.energy.gov/recovery/statefunding.htm• “Show Me The Money; The Law of the Stimulus”: One of

many primers to help fill in the background on all the funding opportunities and who can go for them. http://www.stoel.com/ShowMeTheMoney

Failure of the Press• “Blown Away” was a story in plain sight.

– DOE & Treasury very publicly announced the first $1 billion and our most prestigious publications covered it. But mostly with out much context or analysis and an over-reliance on administration and industry sources.

– NYT on Sept. 1:• “Iberdrola, the Spanish energy giant, emerged on Tuesday

as the early winner … Roughly $295 million of the $502 million in grants on Tuesday went to five wind-power projects run by a unit of Iberdrola.”

• Steven Chu, from the press release: “These grants will help America’s businesses launch clean energy projects, putting Americans back to work in good construction and manufacturing jobs.”

• Rob Gramlich, AWEA’s senior VP of public policy (and registered lobbyist): “…said he had seen ‘business activity picking up and turbine and parts orders being sent all the way up the value chain.”

Green Energy Story In General

• Casual use of “green” – there are many who count nuclear as green energy because it has a low carbon footprint… is it?

• Near automatic acceptance of a narrative of a “green” economic revolution and the miracles it can bring.– Not to say it isn’t possible, but we are very far

behind and on a very slow pace.• Over-promising:

– “To tell someone who has been making auto transmissions that they can make a gearbox for a wind turbine … is foolish. (The idea that) every automotive stamper can enter the industry – it just isn’t going to happen… it's not for everybody.” – John Colm, president GLWN

Why?

• Hope Swallowed By Hype– The inherent bias is that we all really want to

believe in this…– http://www.youtube.com/watch?v=Q6XF-gc-

4VE• Sheer size/technical aspects– Dealing with the federal bureaucracy can be

intimidating or overwhelming.– Inclination to accept official or authoritative

sounding word.– Editors don’t want to deal with it

• Inaccurate Data– Jobs created… saved… or supported.– “David” in Wisconsin

Deliberate Obscuring

• Enormous political stakes + lots of questions = ANGER

• Followed by deliberate obfuscation:– “It’s not a grant.”– Chu 9/1/2009: “These grants will help

American businesses…”

More Deliberate Obscuring

• Matt Rogers, senior advisor to the secretary:– Jan. 2010 to ABC: “Every

dollar – every dollar is going to create jobs for American workers here in the United States.”

– March 4, 2010 to a Senate committee: “100 percent of those funds go to U.S. projects, so the reporting has been more than a little misleading.”

March 10, 2009, Vancouver, Was.By flickr user Nate Sandel

June 1, 2009

June 19, 2009

Meadow Lake Wind Farm$113 million in stimulus

More Obscuring• “As a result of this first round of funding, more

than 2,000 Americans will have access to jobs in the renewable energy industry – both in construction and in manufacturing.” DOE Press release, 9/1/2009

• How can you count jobs on projects that were done before the stimulus was ever passed?– Matt Rogers, 9/2010: ““I think it’s the simplest thing.

You can talk to the 40(,000) to 50,000 people who have been working on these projects since they were passed, and ask if they are pleased (with the stimulus.)”

Section 1603 (in brief)• Investment tax credit – 30 percent of your investment.

Stimulus changes it to cash.• Requirements:

– Own a renewable energy facility in the U.S.– Fill out application correctly.

• Within 60 days, the DOE reviews application to establish you have a renewable energy facility – sends to Treasury.

• Within seven days of notification, money is direct deposited in your account.

• As of May 27: $3.2 billion has been awarded to 558 projects in 43 states.

Projects by State(Top 24 – all others, less than 10)

Awards By State

Projects By Type

*Includes: Landfill, Fuel Cell, Combined Heat & Power, Hydropower, Trash

Look Beyond Big Wind• 1,074 non-wind farms to write about• Each grant is a story itself –

– Local person/business, getting sizable chunk of taxpayer dollars (1,092 are more than $5,000, representing an investment of at least $16,670)

– 1,117 projects in a nation of 309 million people.• The more local you can get, the more relevant

– Unlike 100,000 square acre wind farm … these are short-term projects that use local workers, create local technical knowledge and are much more likely to have been conceived recently (ie, actual product of the stimulus)

– A chance to get a sense of what sort of green activity there actually is.

More Than a List

• Even if stimulus or investigative reporting isn’t your specialty, consider this data an introduction to a set of stories you don’t have time to look for yourself.

STORY IDEA #1: Notable Locals• Each has its significance – to the community, to green

energy.• Pacific Missile Range Facility at Barking Sands, Hawaii -

$900k– When the military adopts, it’s a huge institutional endorsement.

• Colleges and Universities: Early adopters– ASU received $2.5 million for three projects, including a building

you’ll be in, the Global Institute of Sustainability building.• Schools: $3.2 million for 15 schools

– School budgets are ALWAYS contentious, maintenance costs are major. Is this a success? A waste?

• Oddballs:– Bob’s Big Boy: hamburgers, solar panels

Oddballs

• Pet Tender’s Country Cattery, in Missouri• Cutthroat Clams – “family run clam farm” in

Florida• Laran Bronze – foundry in Pennslyvania • Bill & Ted’s Excellent AD Venture – advertising

company in California• Dartmouth Sports Dome Realty Trust – indoor

sports fields in Dartmouth, Mass.

STORY IDEA #2: Patterns• Department stores:– Kohl’s: 10 projects, $5 million.– Wal-Mart: Five projects, at least $4.1 million– Staples: One project, $3 million– Marshalls: One project, $821k– Sports Authority: One project, $536k– TJ Maxx: One project, $249k– Best Buy Stores, $16k for small wind

• Why?– Not their main business, was the threshold lowered?– Why Kohl’s? Why not Whole Foods?

• Cost vs. marketing

STORY IDEA: Patterns• Animal Care:

– Pet Tender’s Country Cattery, in Mo.

– DogBoy DogRanch, Austin, Texas– Firehall 4 Animal Hospital, Ga.– Niceville Animal Clinic, Fla.

• Why?– Is there something inherent about

the business? – All southern, high cooling costs?– Marketing to clientele – people

who splurge on pets, like green?

Dog Boy’s Dog Ranch Expansion

STORY IDEA: Patterns• Farms:– At least 54, of all types: dairy, orchard, vegetable, etc.

• Real estate management:– At least 13 apartment complexes, countless commercial

office properties– Attracting tenants? Like offering free cable/internet?

Commercial clients do like LEED certified buildings.– Managing utility costs?– Senior living complexes – what do residents think?

• Car washes:– At least seven – Six solar electricity, one solar thermal.– Arizona, Virginia, Maryland, New Jersey and

Massachusetts

Look for Geographic Patterns

Story Idea #3: The Legacy• Point of the stimulus was more than just jobs on

the site, it’s supposed to transform economies:– Rogers: “One of the things this has helped do is make

a national network of installers and mostly small businesses in local markets who can actually operate profitably.”

• Story idea: Localize the story on foreign companies… – Not the big wind farms, but the small local projects…

Not who is the giant Danish company, but who is the electrician?

The Legacy• Go beyond the immediate impact of the jobs

on these projects.• What has it meant in the long run.• Localize the question of, “How stimulative was

this?”• Is there a new local mini-industry?

Borrego Solar

• National company focuses on financing, engineering, building small solar arrays.

• Partnered with Reading Electric to install 5mw of solar at 32 businesses in southeast Pennsylvania.– Misco, chemical company in Bern Township, Pa.– Silberline, paint company in Tamaqua, Pa.

• Where are the rest? Why don’t they have grants?

Searching For Detail

• Use Google!• Even more than most areas, anything related

to energy is probably online.– Incentives• Federal aren’t the only one

– Permitting– State and federal filings:• PUC• Renewable energy filings

Knollwood Energy

Knollwood Energy

• Who are they?• Founded in 2006• Not installers or engineeers:– “Our expertise is in the renewable energy credit

market.”

• Helped with at least three in Pennsylvania:– Marigold Knob Farm– Dave & Vicki Stewart (farm)– Farmer Jon's Produce

Bonus story? The Legacy• For green to be successful in the long run it’s got to help the bottom

line– Misco, the chemical company:

• 13,000 solar panels, 30 percent of their electricity.• “Misco said it's an expensive undertaking, but it'll pay for itself after about ten

years.”• Does it improve the way business is done?

– Silberline, the paint company: • 871 solar panels, will reduce carbon footprint by 230 tons per year.• Effort to meet “Core Global Values”• “We are pleased to demonstrate our efforts toward Environmental

Stewardship through this investment in renewable solar power”, says Lisa Jane Scheller, President and CEO.

• Now that we’re 18 months in, we can start asking those questions.– Especially for businesses with smaller profit margins.

48c Tax Credits (in brief)• Actual tax credit,

announced in January

• Competitive selection

• $2.3 billion, at least 38 states, 185 projects

• Matched by up to $5.4 billion

• Many got some coverage, but not always good.

State Amount

California $235,500,989

Michigan $225,801,351

Tennessee $200,390,169

Ohio $124,981,680

Connecticut $120,911,520

Oregon $87,243,801

Colorado $75,239,310

Texas $68,504,131

South Carolina $53,653,500

Kentucky $53,364,900

STORY IDEA #4: Fine Print

• Ingeteam:– Spanish manufacturing company– Feb. 15 Milwaukee Journal-Sentinel Article: “About 270 manufacturing jobs will be created by

the plant, said Greater Milwaukee Committee President Julia Taylor. Building the plant will bring construction jobs as well, said Patrick Curley, chief of staff to Milwaukee Mayor Tom Barrett.”

– But when?• Time frame

– One year to meet qualifications to be certified– Deadline to open: January 2014

STORY IDEA #5: Not Done Deals

• Vela Gear Systems: Indianapolis, Ind. – $11.6 million– Startup, CEO wants to locate in Indiana, taking

advantage of infrastructure and region’s history of making transmissions – auto and otherwise.

– No employees, no financing, no location.– Loan guarantee pending.– Lag-time in startup

Bonus Story? Local Incentives• Many of these projects hinge on getting more help – beyond the

stimulus.• Database of State Incentives for Renewables & Efficiency:

http://www.dsireusa.org/• Pennsylvania model:

– Gamesa (Spanish) only foreign manufacturer able to produce towers, nacelles and blades in the U.S.

– State focused on supply chain.– Feb. 19, state gave out $22.8 million in federal stimulus dollars to

three wind farms … if they bought Gamesa turbines.• What’s your state/city doing – is it competitive? Balance benefits to

company with benefits to residents? Are there guarantees? • Example: Ingeteam• Example: Nordex in Jonesboro, Ark.• TIFs

Bonus Story?Meeting RES Requirements

• RES: renewable energy standard, RPS: renewable portfolio standard

• Congress considering a federal requirement• Many states already have one– Some 1603 projects being used to meet

requirements, like the Garnet wind project in Palm Springs

– To meet state standards, even small out-of-state projects are being certified

STORY IDEA: Ethics• Wind farms/solar arrays/biofuel/landfills are not

universally loved, especially in more populated areas – varying levels of concern, legitimate and not, particularly quality of life issues

• How do you win over the local authorities? – The same way it happens with other deals –

sometimes fair, sometimes not.• New York State code of ethics• Treat these companies the same way you’d treat

Massey if they showed up to open a mine, or BP if they arrived to set up a drilling rig.

Tip: Don’t Skip the Background Check

• Lots of money attracts people with checkered pasts and no experience.

• Atlantic City Press 1/2/2010: “Financial incentives bring renewable energy business- but not experience.”

• Secretary of State Websites, corporation look-ups– Brief history of business, key executives, ownership,

subsidiaries, linked companies, etc.• ProPublica: “How to run a background check on companies

awarded stimulus contracts”– Criminal/Tax issues– Bans on contracting– Workplace safety records– Environmental record– Lobbying records– http://www.propublica.org/feature/how-to-run-a-background-

check-on-companies-awarded-stimulus-contracts-520

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• rchoma@investigativereportingworkshop.org• Twitter: russchoma• Website: www.russchoma.com