Exergy's troubles: an ill wind for renewable energy?

Here's a draft of our Sunday editorial on wind power. And here's a link to a Reader's View on wind power, which also will run Sunday, written by Idaho Power planning supply manager Mark Stokes.

Exergy Development Group did everything possible to make itself the corporate face of renewable energy in Idaho.

In 2010, CEO James Carkulis stood beside Gov. Butch Otter and Idaho Power executive Lisa Grow at the dedication of a wind farm near Hagerman, marking the occasion by signing a blade on one of the turbines.

Exergy rode into the world of corporate sponsorship with the speed of a sprint cyclist, underwriting Boise’s Twilight Criterium and inaugural Exergy Tour and sponsoring Kristin Armstrong, Idaho’s two-time Olympic cycling gold medalist.

But a company cannot simultaneously pursue the spotlight and avoid scrutiny.

For Exergy, times have turned, quickly and dramatically.

• Exergy suspended its plans for 116 megawatts of Southern Idaho wind farms — projects that had been “years and millions of dollars in the making,” Carkulis said.

• The company is behind on paying its Exergy Tour bills. Exergy has pledged to make good, and on Thursday, the company paid the city of Boise more than $27,500 for security and other services for the Exergy Tour and Twilight Criterium.

• Now, Virginia-based AES Corp. has filed suit in federal court, claiming Exergy owes up to $37.9 million on turbines the company ordered only four months ago.

In a recent Reader’s View, Carkulis maintains that Exergy remains “financially strong,” and prepared to push forward on projects it considers profitable. He also blames Exergy’s problems on regulatory uncertainty. The Idaho Public Utilities Commission is in the midst of settling a dispute over contracts between utilities and renewable energy producers; the outcome could decide the financial viability of Exergy and fellow producers.

Still, the signs suggest Exergy pushed too hard, spent too much and extended itself too far.

Unfortunately, and perhaps unfairly, this one company’s problems can reflect poorly on an emerging wind sector. Exergy’s implosion is particularly ill-timed — because, while the PUC deliberates, the wind industry also is locked in a public relations showdown.

Here, as before the PUC, one of the sector’s key customers is also one of its harshest skeptics. Idaho Power has taken its regulatory case to its ratepayers, saying federal rules require the company, and its 500,000 customers, to pay too much for electricity that is available only intermittently.

Idaho Power’s public relations campaign says wind power is neither reliable nor cost-effective. By suspending its projects midstream — and by falling in arrears on its bills — Exergy’s problems reinforce the Idaho Power message.

But let’s remember that this is not just about Idaho Power vs. Exergy, or even just traditional utilities vs. renewable companies.

Rural communities stand to gain if companies invest in wind development. For communities in Twin Falls, Lincoln and Bingham counties, Exergy’s project suspension represents lost jobs and lost opportunity.

Idaho, meanwhile, needs to shift its power portfolio toward renewables. If Idaho fails to capitalize on its wind potential, ratepayers will suffer the consequences in the long term.

Exergy’s problems should not be minimized. Neither should they be used to discredit an entire sector. Idaho ratepayers — and Idaho regulators — must take a longer view.

"Exergy's project suspension represents lost jobs....."

Kinda reminds me of Solyndra. Oh wait, Solyndra got a $535 million loan guarantee. Maybe if Exergy got a similar guarantee they would......oh forget it, sorry.

Gee Kevin,

Lost Jobs? You mean like the lost jobs as a result of your hero's decision not to build the Keystone Pipeline? Looking forward to your opinion piece on that.

Number 1

Fastsaluki,
Get your facts straight- Obama has approved Keystone Pipeline.

Also, enjoy your job when the world is completely polluted. Have you seen any of the fracking documentaries? The people with polluted wells have their health ruined, can't sell their houses, and they realize that no amount of money from leasing their land for drilling was worth it.

Tarsands are polluting the crap out of the Athabasca River and poisoning wildlife and people, not to mention accelerating global warming.

But hey, look out for number 1, right?

Right.........Uh Huh.

He's just not allowing it to be built. How do you manage to go through life as an irrational antipodian thinker? Perhaps the drugs make it easier?

Don't approve Keystone, have a Cronie transport the oil.

That's what Obama did. Warren Buffett owns 22% of Burlington Northern Railroad and he will transport the oil for a much higher cost, to the end user. This is the way an Obamerica works. You have a convenient billionaire bundler making tall profits for future favors. With the dumb taxpayer set up as the "mark". And the biased media stands by and talks about the war on women.

So much for 'Truth to Power'.

Lost jobs a win for the taxpayers

Kevin, have you forgotten how much taxpayers fork over for each of the jobs "created"? Here's an example. The Rockland Wind Farm was awarded more than $43 million (of taxpayer money) from the Department of the Treasury as part of the 1603 grant program (http://www.treasury.gov/initiatives/recovery/Pages/1603.aspx). Ridgeline Energy claimed the project created 10 jobs, which I doubt. But if you believe them, that's $4.3 million of taxpayer money to create each job! That's many times worse than Obama's stimulus program.

Gosh, I wish you green energy-loving reporters would do your jobs and start giving your readers all the facts.

"Idaho, meanwhile, needs to

"Idaho, meanwhile, needs to shift its power portfolio toward renewables. If Idaho fails to capitalize on its wind potential, ratepayers will suffer the consequences in the long term."

Please explain this statement. If Idaho fails to capitalize on its wind potential now, it will still be there in the future. The wind isn't going away. In the future, the technology may be improved to make wind power more economical. As it is, it relies on subsidies of many forms with consumers paying the price.

Do you have any idea the profit levels the wind farms run in the current climate of subsidies, value of RECs, and mandated peak prices for their energy supply?

WorkingJoe, you are asking the questions reporters won't

Since I discussed the Rockland Wind Farm above, let's take a closer look at their agreement with Idaho Power (http://www.puc.idaho.gov/internet/cases/elec/IPC/IPCE1024/ordnotc/20101124FINAL_ORDER_NO_32125.PDF).

According to the PUC, Idaho Power will pay Ridgeline Energy $422 million over the life of the 25-year agreement. Ridgeline will retain the RECs (I'm sure over $1 million) for the first 10 years, while Idaho Power will claim them for the remainder of the contract. Idaho Power will pay an average of $71.29 per MWh for the energy generated. (When this agreement was reached, power on the open market was available for somewhere in the neighborhood of $27 per MWh.)

Now, you as a taxpayer paid for a significant amount of this project. In addition, to the more than $43 million taxpayers paid for their 1603 grant award, Idaho taxpayers reimbursed Ridgeline Energy more than $7 million in sales tax. That's over $50 million for just two subsidies (and there are more available).

This project (this is a real guess on my part) probably cost Ridgeline about $120 million overall, and when you subtract the more than $50 million that taxpayers gave, the wind farm investors coughed up just $70 million. When you consider that Idaho Power will pay Ridgeline $422 million over 25 years (for their $70 million investment), the profit is just staggering.

This is green energy alright. It's you, WorkingJoe, who is providing the greenbacks to the wind energy developers via your utility rates.

Why won't reporters share this publicly available information with their readers?? Why must I do their jobs?

It does not fit their

It does not fit their political or ideological views.

Great!

So we are supposed to fork over a ton of dough know to subsidize an industry that has yet to prove it is financially viable. Great. You know it occurs to me we already subsidize traditional energy through our PUC rates. How much longer are we going to have to keep doing this? Because in the short, even long term renewable energy, especially wind farms, are not looking like they will be financially viable.

Good thing this piece of work is only a draft....

You'd look pretty foolish if this was your best effort!