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An Ill First Wind Hits the Public in the Pocketbook

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"UPC has been working in China since 2006, and we have seen this market go from a standing start to one of the largest in the world for wind energy. We expect to see sustained long term growth in the wind market in China, and UPC, with support from GEF, is looking forward to participating fully in this market," said Brian Caffyn, CEO and Chairman of UPC.

An Ill First Wind Hits the Public in the Pocketbook


The promises of alternative energy generated from industrial wind turbines are suspect when examined on the facts. The basis for justification for the entire industry is that electricity generated from uneconomical technology is environmentally friendly. The public is supposed to accept higher costs from inefficient and unreliable generation just because it is "green". Touting wind as a free source of energy is dishonest. This old technology from skyscraper size industrial machines is anything but free. The media seldom reports that industrial wind does not produce cost effective reliable electricity. Cowardly politicians who dare not oppose the industry ignore indisputable and inescapable facts about wind.

Rational reasons against spending public expenditures for subsidizing a technology that has never yet replaced a fossil fuel power plant is overwhelming. If industrial wind factories were a real solution, why will not entrepreneurs develop their projects the old fashion way, with their own money?

Government policy that favors and protects the economic failure of wind projects is essential for the deception to continue. Even proponents of the most radical global warming myths are taxpayers and consume electricity. Where is their outrage when costs increase at exponential rates, from ill-conceived wind projects, with no ceiling in sight? For answers, an examination of the First Wind Company provides a window on a culture of corruption that is indefensible.

First Wind has an application pending before the SEC for an IPO. A review of their S1, S1A and additional supplement filings paints a very dire picture. Prospectus disclosures, must describe risky conditions for a security offered to participants and buyers. The Boston Business Journal report, "In its latest Securities and Exchange Commission filing, the Boston-based company reiterated it could default on an $80 million loan due next month. First Wind currently is negotiating with a consortium of banks to receive $240 million in financing that would pay off a turbine loan that matures June 30."

Part of First Wind’s financial woes is the failed Cohocton, NY project. Original admission that the 50-turbine development cost of $265,000,000 have escalated by tens of millions after three seasons of refitting, repairs and substitutions. Clipper Windpower Liberty 2.5 MG turbine is a total bust as a viable generating unit. Clipper stock (CWP.L) traded on the London exchange; hit a new low this week. The NYISO lists the Canandaigua Power Partners, LLC (entity of ownership for the Cohocton First Wind project) as having a 2008 net energy production of 10,155 MWh and zero kilowatt capacity for 2009. When pushed the NYISO admits that the project is "In Service", which really means it is in the testing stage. No verified proof is available that any electricity generated by this project is going into the grid for sale to consumers.

Leaseholder’s agreements have a minimum payment amount with an extra small percentage for production. If First Wind were really selling electric into the grid, leaseholders are owed money on that production. The fact that Cohocton leaseholders have not received any funds on generated electricity is proof that the project is a failure.

Actually, the project consumes significant energy when not producing usable electricity. Energy consumption in wind facilities lays out the different requirements of a wind turbine that eats up significant portions of electricity generated. When the wind is not blowing or a project is not set up for the grid to accept energy, the facility is a net user of electricity.

In June 2008, First Wind filed a complaint against the NYISO with FERC (Federal Energy Regulatory Commission) to exempt CPP from the Open Access Transmission Tariff that had been previously agreed upon. The point is that First Wind seeks to transfer normal development costs onto the backs of the ratepayer.

First Wind received in the fall of 2009, $74.6 million in federal stimulus grants through the Department of Energy. These funds had no restriction for use and no accounting disclosure followed. Democratic and Chronicle reporter Steve Orr wrote on September 2, 2009 about First Wind’s compliance with the NYS AG ethic agreement. "First Wind was one of at least two clean-energy firms that state Attorney General Andrew Cuomo investigated last year after complaints about collusion between companies and improper dealings with local government officials."

Former U.S. Rep. Eric J. Massa (D-N.Y.) wrote to President Barack Obama, calling the grants "very alarming" and saying the company "abused the public trust" and had problems with U.S. tax dollars going to what he called "shell companies" for First Wind. Massa noted, "First Wind is under investigation by the New York Attorney General’s office for alleged corruption. The actual appropriation is going to Canandaigua Power Partners and Canandaigua Power Partners II, subsidiaries of First Wind."

"This is one of the most volatile issues in Western New York, and the award of $74.6 million dollars to corrupt companies that have changed names time and again, forming new LLCs and new Inc’s but maintaining their business model of lie, cheat, and corrupt at the expense of taxpayers, has stirred great unrest in New York’s 29th Congressional District," Massa wrote to the president.

First Wind CEO Paul Gaynor, a former Enron executive, responded in a letter to Obama, saying that First Wind's New York wind farms have produced 133,370-megawatt hours of clean, renewable energy, but never provided any proof of his claim.

How does a company like First Wind gain favorable benefits and access to energy policy?

Reporter Naomi Schalit of the Maine Center for Public Interest provided some insights in the article, Ex-PUC head enriched by utility company. "While he was Maine's chief utilities regulator, Kurt Adams accepted an ownership interest in a leading wind energy company . . . A recent First Wind filing with the federal SEC for 2009 shows Adams’ $1.3 million compensation included $315,000 in salary, $658,000 in stock awards, $29,000 of "other" compensation and $315,000 in "nonequity incentives."

The latest First Wind SEC filing attempts to downplay the conflict of interests and breach of ethical conduct of Mr. Adams. Their explanation does not pass the smell test. Such suspect business practices are standard behavior for First Wind. It has a long history of using political insiders to gain special treatment.

Documented in the Citizen Power Alliance essay, Industrial Wind and the Wall Street Cap and Trade Fraud is the dark origins of First Wind, previously called UPC. The Boston Herald asked Brian Caffyn, founder of UPC/First Wind, about the arrest for fraud of his former Italian wind developer partner Oreste Vigorito. "I read about it in the papers, and I was very surprised," Brian Caffyn said from Hong Kong where he is in business with Chinese interests.

The political cronyism between First Wind and the Obama administration extends to Rahm Emanuel and Larry Summers and their involvement with the primary ownership interests of First Wind, hedge fund DE Shaw and private equity firm Madison Dearborn. Documented sources within the CPA article substantiate the trail of money and influence that flows from this wind developer to the highest levels of government.

New York State a den of thieves

NYS operates as if it is a suburb of Chicago. IDA (industrial development agencies) sell tax exemptions, state agencies ignore their own policy regulations to advance wind development, the attorney general office looks the other way when conflict of interest practices lead to criminal conduct and local public officials routinely take bribes for their vote and support of specific projects.

With each complaint to the Public Service Commission, the PSC bends over backward to have First Wind cover their paper trail discrepancies or modify their filings.

Governor Paterson’s State Energy Plan calls for a " '45 by 15' clean energy goal would reduce the amount of electricity used in 2015 by 15 percent below forecasted levels, while simultaneously meeting 30 percent of the State's remaining electricity needs through renewable resources."

First Wind is in business to claim their share of the booty. REC credits (renewal energy certificates) are the new coin of the realm. It makes little difference if actual electricity is generated into the grid for sale to reap the financial rewards of this slight of hand deception.

Carved in stone is a history of NYS favoring NYC over upstate. The latest insult is the Power for Jobs hoax. The Buffalo News describes this initiative, "The agreement between Paterson and the Senate leaders would set aside slightly less than a third of the electricity — at least 300 megawatts of the 910 megawatts available through the expanded Power for Jobs program — for upstate businesses served by National Grid, New York State Electric & Gas Corp. and Rochester Gas & Electric." The allocation difference goes to NYC. Assembly representative Joseph Morelle, opposition states, "it takes low-cost hydropower from Rochester and Upstate New York and ships it downstate . . . This proposed shift would result in an increase of approximately $80 to $125 per year on the bill of the average RG&E residential customer."

What does Western NY get out of this shady deal? You guessed it, more industrial wind turbine disasters from developers like First Wind so they can erect their unsuccessful projects using out of state labor or even undocumented foreign workers.

The fallout from the Cohocton Project is a horror story in its own right. Real estate values plummet; sales of properties are non-existent, "Wind Syndrome" health issues abound, an OSHA investigation of a construction crane collapse and final abandonment of residences because of low frequency noise, shadow flicker and safety risks prevent continued use of one home.

The tragic destruction of pastoral communities from insane government policy would fill volumes of books. Most people will never show concern for rural areas or even the corrupt business practices of crooked wind developers. First Wind is just the best example of the unholy alliance and revolving door of crony capitalism that is driving up the costs of electricity beneath the lies of "Greening America" and job promotion. The public is asleep. Their righteous outrage is long overdue. It is time to clean up the system from the dishonesty of industrial wind developers.

SARTRE – May 23, 2010

"Although our name has changed, our core values remain the same"

 said Paul Gaynor, President and CEO of First Wind.

“There appears to be no recourse or plan to compensate us for property value losses, erosion of our quality of life, or mental anguish. Besides these 44 wind turbines, thousands more are in the pipeline! God help us!”
Resident near the Mountaineer wind plant in West Virginia

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