Federal and State Money Not Enough for Your Renewable Energy Project? Take It From Locals!

If you're frustrated that federal and state tax dollars are still propping up wasteful renewable energy gambles, here's another reason to stay away from California: State politicians want to make it easier for city and county governments to do the same. And in the process they seem to be creating the successors to the blight-creating redevelopment agencies California abolished earlier this year. 

California Assemblyman Ben Hueso (D-San Diego) introduced AB 2551 at the end of February. The bill, titled "Infrastructure Financing Districts: renewable energy zones," would allow California cities and counties to declare an area a "renewable energy zone," assuming it "is characterized by the proposed development of more than 10 megawatts of renewable energy projects, including, but not limited to, solar, wind, and geothermal projects… ." That's enough energy to reliably serve around 5,000 homes and can be reached with between two to six wind turbines, depending on the size.

Once a city has declared one of these zones, Hueso's bill would allow it to create an infrastructure financing district to redirect property tax revenues "for the purpose of promoting renewable energy projects."

There is nothing in the surprisingly concise bill (200 words!) detailing what counts as a renewable energy project or what sort of expenditures count as "promoting" them. The policy paper released promoting the bill vaguely states "Once created, these IFDs can take property tax increment dollars and use them locally for infrastructure and community benefit needs. That infrastructure could be to enhance renewable energy production, access, or transmission capabilities. It could also be used to build a local park or any other allowable benefit or infrastructure need." There is nothing explaining how exactly a local park counts as a renewable energy project.

Infrastructure financing districts (IFDs) are already permissible under California law to allow bonds for a very limited list of public works projects, and legislators began pushing for changes in IFD regulations in 2011 in advance of the death of redevelopment agencies (RDAs).

Like RDAs, IFDs redirect property taxes from other local agencies to fund their goals. But unlike RDAs, IFDs cannot divert money from school districts. More importantly, IFDs are extremely difficult to establish, requiring a two-thirds vote from the community to form and an additional two-thirds vote to issue bonds. Several efforts to modify IFD regulations focus on the restriction that matters most to government officials: eliminating the requirement for voter approval.

Hueso's bill would also exempt these energy zones from requiring voter approval. The policy paper for the bill defends the exemption by complaining about how time-consuming and expensive it is to arrange for the public to vote on things. It also notes that even if the public doesn't vote on the creation of the IFD, a two-thirds vote would still be required for bonds to be issued.

The vagueness of the bill's wording brings to mind ridiculously loose definition of "blight," the justification used by RDAs to do whatever they wanted to land that fell under their jurisdictions. Does a renewable energy project have to actually sell energy it produces to qualify? Or will we see a bunch of private developments slap on solar panels to qualify for the same kind of city handouts they used to get from RDAs? Does the distinction even matter? (Maria Garcia, Hueso's legislative director, did not respond to requests for detail about what sort of restrictions, if any, would guide the expenditures of funds from the district)

Also worth noting is that 10 megawatts of renewable energy merely need to be proposed, not built, in order to create one of these zones. The designation of an IFD can currently last 30 years, raising the familiar specter of a civic commitment to a project that ultimately fails. Would Solyndra meet New London in a solar-fueled explosion of failed central planning ventures?

Follow the money bonus: One of the primary non-legislative sponsors of the bill is the San Diego-based East County Renewables Coalition (ECRC). The ECRC's bare-bones website declares, "We strive to bring renewable energy to San Diego County thru [sic] a robust local, state, and federal grassroots movement."

The Coalition calls itself a grassroots movement, so you should be able to guess what's going to come next. The executive director of ECRC is Jim Whalen. The address of ECRC is the same as the address for J. Whalen Associates Inc., a firm that helps businesses, utilities and others to navigate environmental permitting and governmental processes in order to build projects. Among the clients currently listed on J. Whalen's own website is Sempra Energy.

San Diego-based Sempra has a solar project in the works in the Rosamond area in Kern County and has donated a total of $8,000 to Hueso in the last two Assembly election cycles. He has also received $3,000 in donations from Pacific Gas & Electric for his current campaign for reelection. And, of course, he has received thousands from California labor unions who stand to lay claim to the jobs these projects will allegedly create (and they're not afraid to use environmental regulations to threaten lawsuits if they don't get them).