The Kemper coal plant is more than two years behind schedule and more than $4 billion over its initial budget, $2.4 billion, and it is still not operational. The plant and its owner, Southern Company, are the focus of a Securities and Exchange Commission investigation, and ratepayers, alleging fraud, are suing the company....
Many problems plaguing the project were broadly known and had been occurring for years. But a review by The New York Times of thousands of pages of public records, previously undisclosed internal documents and emails, and 200 hours of secretly though legally recorded conversations among more than a dozen colleagues at the plant offers a detailed look at what went wrong and why....
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"A Mississippi project, a centerpiece of President Obama’s climate plan, has been plagued by problems that managers tried to conceal, and by cost overruns and questions of who will pay."
The NYT reports.
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They don't seem to realize that when government money is involved with something the market won't support, this ALWAYS happens.
It's called a money grab Althouse. The Obama cronies and the Dem cronies are just getting warmed up- in ten years, we will look back and say they helped themselves to how many billions of dollars?!
"The company and regulators were eager to qualify for hundreds of millions of dollars in federal subsidies for the plan."
That's how the CAGW scam works: federal money.
CAGW is a delusion.
Being DemCong means never having to say you're sorry.
This is my shocked face.
What went wrong and why can be summed up in one word - Obama. Everything he touches turns to shit.
When Uncle Sam goes to shoveling out the green, the predators and scavengers will be the first to gather around. It was always so, and will ever be.
Many problems plaguing the project were broadly known and had been occurring for years.
There's the leitmotif.
"The company and regulators were eager to qualify for hundreds of millions of dollars in federal subsidies for the plan."
So wait....a project was allowed to more than triple in cost from 2.4 to >7 billion so that the company and government would qualify for "hundreds of millions in subsidies"...
That's some ass backwards subsidy setup right there. How on earth do you not put cost controls on the availability of the subsidy?
This is the story of dozens of similar energy projects ongoing and many that have ended in (quiet) disgrace, many in California. There are State actors also at fault.
It should be a huge scandal, similar in scope to the EU energy scandals that brought down Spanish governments due to corruption. In a Republican administration this all would be called an Enerscam or something.
A poorly run project takes three times as long as planned and costs 4 times as much.
A well run project only goes over time and budget by twice as much...
That opening line reads like a Madlibs of policy programs for the past 30+ years:
"A [adjectival noun] project, a centerpiece of [Administration's] [policy] plan, has been [verb, synonymous with stymied] by problems that [noun synonymous with mid-level people in charge] tried to [verb synonymous with hide], and by cost [verb synonymous with increases] and questions of who will pay.""
sounds like a Qui Tam suit...
If you want an example of what will occur in a Clinton administration, this is exactly it, a scale model. Not that it is any different than whats going on already, just expect it to continue, and expand, if anything.
Maybe the state attorneys-general will want to start inquiring of the company what it truly believed about global warmening, and how much good its project could ever do, and whether its projections and promises were not violations of securities laws, and --key-- to which activist groups they gave money. You know, the same way the A-Gs are doing with Exxon-Mobil.
Seems only fair.
Many problems plaguing the project were broadly known and had been occurring for years
Sounds like every "high speed rail" plan in recent history, mind you.
Yet Southern Company stock is trading at an all-time high.
The way this works is that the private companies get strong armed into accepting deals by implied or overt threats of non compliance rulings and lawsuits. Public utilities commissions are political bodies that, though they may in some cases be inclined to be dutiful towards their ratepayers, may not have oversight over deregulated generation facilities. Many PUCs are not at all careful about their ratepayers interests because they are political bodies.
This is a very complex dance with enormous scope for graft, regulatory capture, inside dealing and extortion. It is not at all visible to the media because it is complex. Its been made this muddy deliberately. Similar are cable franchises, telecoms and other public providers.
Not the largest (in scale) venue for corruption, but an excellent example of democratic failure, a great source of case studies for public choice economics.
All energy projects based on eliminating energy sources to control the weather start out so far into fantasy land that no lies added later to loot the marks is ever challenged.
Nobody will be investigating the DOE, EPA and its employees roles in all this though.
Well, at least we'll have President Obama available to join the private sector shortly to straighten-out all of their problems and inadequacies.
From the article: In the end, the Kemper project is a story of how a monopoly utility, with political help from the Mississippi governor and from federal energy officials who pressured state regulators in letters to support the project, shifted the burden of one of the most expensive power plants ever built onto the shoulders of unwitting investors and some of the lowest-income ratepayers in the country.
This is also true of the wind farms you see traveling through the midwest, the solar farms and the offshore wind. They are all dependent on subsidies and and credits, and many require that the electricity generated be purchased by the utility at higher than normal prices for a lengthly contract.
Indeed the guaranty of purchase of the generated power for a term at a favorable price is the key to the scam. The investors get a return with the safety of a utility bond but with an equity rate of return further enhanced by tax credits. This reduces the return of the other more conventional investors in the utility, and the additional cost is borne by the ratepayers.
A much larger venue for corruption, of course, is in financial regulation. One small one that I found (just by happenstance, after actually reading my pension fund statement) is the rule change that magically transformed nearly all private pensions from being grossly underfunded to being compliant. That alone is bigger in terms of implied costs to the public (liabilities to pension insurance) than all the idiot alternative energy project losses (that I know of).
The scale of US public corruption is staggering.
I wonder if the NYT will ever get around to the utility situation in California. Or New York for that matter.
buwaya puti said...
I wonder if the NYT will ever get around to the utility situation in California. Or New York for that matter.
Just after they cover pension funds in both places
@David wrote: This is also true of the wind farms you see traveling through the Midwest
@Madison wrote Yet Southern Company stock is trading at an all-time high.
While many factors affect the fact that Southern stock is indeed at a ten-year high (I didn't look back further than that), I am sure subsidies from this help a bit. And, in spite of the fact that windfarm lifetimes are short and performance sucks, companies still make money from them...must be subsidies that make the difference.
Hey, buy utility stocks. Dividends are usually great, they are in bed with regulators, and you can get some of your tax dollars back.
Ratepayers get to pay for the corrupt energy subsidy. Yes, we do. My neighbors are all putting on solar panels with guaranteed high-price feed-in tariffs from the utility company. My bill keeps going up even though my kWh is down. This induces me to join the crowd. Preference cascade. Of course, it will then implode because the subsidies will end and the surplus output will go begging. Same with windmills. Although those are not homeowner-level installations, the economic and engineering issues are the same and worse.
If --IF-- somebody comes up with a killer good storage technology, we might get out of the trap. But I don't know of any. People have been trying to make a better battery for well over a century and the advances are painfully slow. Maybe nano will work. It's our new synonym for "magic."
There are two kinds of homemakers: Those who insist on a centerpiece at Thanksgiving, even though there's not enough room for it on the table; and those who do not.
"Of course, it will then implode because the subsidies will end "
Not if subsidies are locked in through high rates forever after.
Though high rates will then be locked in, causing economic damage forever after, like any other structural inefficiency.
Structural inefficiencies are one explanation for the condition of Argentina, for instance.
You know, I have been involved (tangentially) in a failed power plant project (Bataan nuclear power plant) that was riddled with cost overruns and corruption, overseen by a government (the Marcos dictatorship) well known for extreme corruption in the context of its times.
This one case is simply larger in scale and seemingly worse in its details of special dealing. And this is just one of an immense number of such projects, while the Bataan case was very much the crown jewel of Philippine government projects of the day. The US Federal government, I have to say, is very likely as corrupt today as the thankfully-gone Marcos government was in its day, if not more so.
I am an ancient critic of the Philippine government. However, I have recently reconsidered. Above the very lowest level of petty corruption (payoffs for traffic violations, fixed parking tickets, squeezing vegetable vendors at public markets) - the Philippine Government, which is notably incompetent at most things and which has an ancient reputation for corruption, is probably today, at the high and medium levels, probably less corrupt than the US government and more efficient in its use of funds and more effective in its general level of operations, given its poverty. The personal ethics of most of its higher officers were certainly better in the outgoing administration. It remains to be seen with the latest (Duterte) administration, but there are hopes for that.
That is quite a judgement on the quality of modern American governance.
buwaya - wasn't Bataan NPP cancelled on the eve of COD for non-economic reasons (fear of nukes)? I am confident there was corruption in its development, financing, and construction, but that was not the cause of failure, was it?
It was cancelled out of, I believe, a combination of distrust of poor construction standards, which was reasonable under the circumstances, plus a non-rational rejection of it as morally tainted as a symbol of the overspending of the previous regime. This in spite of the whole thing being a sunk cost.
On the whole I think it was a silly decision that cost the country a great deal in terms of energy shortages and fuel expense. It took at least a decade to recover.
Apparently, being a Replitard means blaming Obama for a project started under a Republican president (Bush) and a Republican governor (Barbour) touting clean coal, which your walking dumpster fire of a candidate supports. If you’re against this insult to science, natural resources, and common sense, come join Team Hillary.
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