Does Maine PUC get to approve sale of these projects? Purchase by utility is blatant violation of the intent of deregulation

Please see the question from Kathy Sherman below.

This financial free-faller somehow recently found $2.75 million to try and buy off Mainers yet they are almost universally despised in Maine, the state where I believe most of their U.S. current and planned wind business is located. I wonder if their next annual report will warn investors as to the trouble brewing for them in Maine.

"In conclusion, SunEdison is over-leveraged and not profitable at all. This affirmation is corroborated by the fact that the interest expense is higher than gross profit. The current situation seems unsustainable in my mind. SunEdison is certainly not a good investment."

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Comment by Eric A. Tuttle on October 12, 2015 at 9:19am

All of the expenses associated with permitting, lawyers, fraudulent experts to their advantage, truthful experts to show some validity, travel, wine & dines, other frills along the way to achieving permitting are all tax deductable for the year incurred. Some may be deferred. The remaining portion could easily be made up with a prepayment to secure a Purchase Agreement. The purchase Agreement at a given rate, even if above current market prices estimated for future rates at the time of completion justifying a current rate increase through the PUC. With many of these projects contributing to the projected rates, a higher projection could be had, thus granting through the PUC rates for the individual producer. A snowball effect toward spiraling increases. As the equipment ages, as with our hydro dams, the price increases are often justified on projected replacement costs.

Unlike us we either save to maintain or replace, or borrow to do so, Utilities are sometimes allowed rate increases to ensure future assets are available. This would be like us requesting a pay raise to pay for a future replacement home. But keeping the pay raise forever.

With our State support of all these devices, such as Heat Exchangers, and other EE electrical devices, I am surprised there is not a mandate to Maine residents that have received these rebates to be required to purchase that portion of consumed power, as green power, at the higher rate of 1-2 cents per kWh. Or will that be next? 

Comment by Dan McKay on October 10, 2015 at 8:15am

Apparently, the interest costs on loans, the permitting costs, the operation and maintenance costs for renewable projects exceeds the money that we the people, ( by the force of a corrupted government), dole out to satisfy the rate of return to investors. We can't do much about interest and operation and maintenance costs, but we can give investors an uneasy decision by driving up permitting costs.  

Comment by arthur qwenk on October 9, 2015 at 8:40pm

Short the Wind industry, Short the Yieldco. It is wonderful to see "greenwashed" starry eyed environmental foolish  investors get screwed.

Comment by Eric A. Tuttle on October 9, 2015 at 7:13pm

You must have income to pay debt. They are working on the premise that they will have such income.

Or we through our PUC's prepaying with rate increases now, with our utilities expecting a reduced rate later.

Whimpy, of Popeye ?  "I'll gladly pay you tomorrow, for a Hamburger today" 

Comment by Dan McKay on October 9, 2015 at 5:30pm

Looks like SE/TerraForm are buying houses faster than the profits from renting them can sustain. Property rich, money poor.

Comment by Kathy Sherman on October 9, 2015 at 4:58pm
Yes, but I thought the rationale for TerraForm was the all the mandated and just plain bogus power purchase agreements with municipalities and companies wanting to be "green" guaranteed the investors a steady revenue stream. In Massachusetts a developer/operator can fetch over 14 cents per kWh from his wind project from the utility when the power is sold to a governtmental subdivision. Of course it is not "green" because it is only electrons from Iso-NE, and it is not cheap - it is discounted only pennies from what he gets, and is still more than I pay now retail (10.9 cents for supply). Delivery here just went to 13.8 cents (up 0.5) this month, for a total of $0.247/hWh. But the developer getting 14.7 cents per kWh is getting FAR more than wholesale on the grid, plus collects the 2.3 cent PTC (worth more pre-tax) and about 6 cents or more for the "environmental attributes". First Wind does not get as much for Oakfield and Bingham, just about 8 cents per kWh with "environmental attributes" bundled in - still way about wholesale and PTC on top.

Does Maine PUC get to approve sale of these projects. Purchase by utility is blatant violation of the intent of deregulation and encouraging competition that makes competitive markets to lower rates. But then our legislatures have destroyed that already with mandates.
Comment by Dan McKay on October 9, 2015 at 2:56pm

If I had money to invest, it surely wouldn't be in any government subsidized renewable energy company. Investment Strategy 101 : If it is your money being used without your consent to prop up a company that wouldn't succeed in the free market, don't expect success.

Comment by Penny Gray on October 9, 2015 at 9:00am

Gone with the Wind?

Comment by Kathy Sherman on October 9, 2015 at 2:15am
My understanding is that the "deal" was sealed long before even the acquisition spree that scared investors and precipitated free-fall. Even the resignation of the CEO of Mass Clean Energy Center, Alicia Barton, to take a position at SunEd (based in Boston) was in the midst or after deals negotiated by Big Banks and Big Equity Investors or at least before stock went over the cliff and downsizing was announced. It will be interesting to see when she got her stock equity package, but it probably beats a quasi-public entity that has its own financial woes.

Speaking of that agency, since Mass Renewable Energy trust, administered by MCEC's forerunner did maps of Maine wind potential, please advise if any from the pre-'08 wind siting decisions, at 50 meters rather than 80 m (2010 revision), 100 m - 120 m, and 140 (the current "vision" came into play. It doesn't work. A weak wind resource doesn't change into an economic and harmonious one simply by putting a MORE humongous rotor on a taller tower that the developer thinks looks more aesthetic hidden in trees. It is worse cubed or to the fifth power, I am not sure which.

Hannah Pingree on the Maine expedited wind law

Hannah Pingree - Director of Maine's Office of Innovation and the Future

"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."


Maine as Third World Country:

CMP Transmission Rate Skyrockets 19.6% Due to Wind Power


Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.

Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT


(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.”

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