Documents obtained by the Civitas Institute suggest Gov. Bev Perdue is attempting to strong-arm North Carolina’s three major utility companies into supplying more expensive energy to their customers in the northeastern part of the state. In a political power-play to reward big business reminiscent of the handling of the Solyndra debacle that embarrassed the Obama administration, Perdue is urging for special treatment that would secure a $200 million federal government subsidy for a multi-billion dollar Spanish company.
Perdue recently sent a letter to the heads of Duke, Dominion, and Progress Energy stressing the importance of the proposed Desert Wind Power Project in Elizabeth City to be built by Iberdrola Renewables (to see copies of the letters, click the links below). The Project involves the development of a 300 megawatt wind energy farm. In her letter, Perdue stated: “I urge you to give serious consideration to partnering with Iberdrola Renewables to make the Project a reality.” Perdue also added that it is urgent that a major utility provider agree to purchase power from the wind farm in order for it to be a “long-term success.”
Small problem: North Carolina’s major utility companies already said no to purchasing electricity from the wind power project because the rates Iberdrola were demanding are so much more expensive than the conventional energy currently being used by the utilities. As quoted in a recent Raleigh News & Observer article, Duke spokeswoman Betsy Alley Conway said, “What we are looking for is wind energy at a price that is cost-effective for the company and our customers. If we receive a proposal from developers that is a good value for our customers and our company, we would execute the contract.”
Translation: Iberdrola’s expensive wind energy would force us to hike rates on our consumers too much – so no thanks.
Perdue’s urging utility companies to provide even more expensive energy to consumers appears particularly out-of-touch in light of recent protests of a moderate rate increase approved by Duke Energy. State Attorney General Roy Cooper also publicly denounced Duke’s rate increase in a press release, declaring: “Now is not the time to ask North Carolina consumers to pay significantly more for electricity.”
Iberdrola Renewables is the U.S. arm of the Spanish “renewable energy” corporation, Iberdrola, S.A., a massive company with a presence in more than 40 countries and global revenue exceeding $40 billion.
Despite such massive revenue, in order for the new Desert Wind Power Project to be a “long-term success,” Iberdrola is counting on a $200 million federal subsidy to help finance the $600 million project. In order to be eligible for this handout, Iberdrola needs to begin work on the project before the end of this calendar year. Without an agreement from a large utility company to purchase the energy generated by the wind farm, however, Iberdrola will not proceed with construction.
In short, Perdue’s letter is meant to apply political pressure on the utilities to purchase expensive energy from the wind farm. As a result, the highly profitable foreign energy company would collect nearly a quarter billion of taxpayer dollars and impose more expensive energy bills onto northeastern North Carolina homeowners and businesses.
According to North Carolina Secretary of State records, Iberdrola has three active registered lobbyists in the state, two of whom registered earlier this year. No doubt, these agents have spent countless hours applying pressure on state lawmakers and the Governor to gain support for the Elizabeth City wind farm.
In Perdue, it appears they found another politician willing to use her political power to further enrich a highly-profitable, giant corporation at the expense of average taxpayers and ratepayers.
With these letters, Gov. Perdue yet again shows her true crony capitalist colors. Time and again, she uses political power to benefit politically-connected corporations – at the expense of taxpayers, small businesses and in this case, energy consumers. Anytime she attempts to position herself as being in favor of “the little guy,” remember the case of Iberdrola. Perdue will gladly throw the little guy under the bus if it means an opportunity to shower deep-pocketed corporations with more taxpayer money. Making matters worse in this instance, her actions would also force up the bills of struggling energy consumers.
When asked via email if Perdue’s actions indicate her disagreement with Cooper’s stance that “now is a bad time to raise rates on energy consumers”, the Governor’s office did not respond. Her silence speaks volumes.
UPDATE (12/15/11): According to a report in the Charlotte Business Journal, Iberdrola has announced they will not begin construction on the Desert Wind Power Project in Elizabeth City due to their inability to come to a purchase agreement with a major utility provider.
PERDUE’S LETTER TO UTILITY COMPANIES: