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The installation was a tedious process involving building roads, a foundation, and hauling many heavy components.  (Source: Jiminy Peak)

The completed 1.5 MW turbine stands taller than the Statue of Liberty and produces enough excess electricity to power 613 homes, making the resort $161,000 a year.  (Source: Jiminy Peak)
"The answer my friends, is blowing in the wind..."

Many small business owners have been curious at the latest alternative energy developments.  From geothermal breakthroughs to solar growth, many wonder -- could the latest green energy technologies work for their business?  Many fear that adoption would never turn a savings and just not be worth it.

However, when it comes to wind power, one inspirational story that small business owners can take note of is the successful deployment of a wind power solution to the Jiminy Peak resort.  The peak, a mountain resort in western Massachusetts, announced this week the one-year anniversary of the connection of its new 1.5 megawatt GE wind turbine to the grid.

The resort is thought to be the first privately held company to have installed a megawatt-class turbine.  It nicknamed its turbine Zephyr, after the Greek god of wind.  Zephyr stands 253-ft. tall, with three 123-ft. blades, making the windmill taller than the Statue of Liberty.  The new turbine generates 4.6 million kWh (kilowatt hours) of energy, enough to power all the appliances in 613 houses.

In the winter, when the mountain winds blow the hardest, the production peaks.  This is perfect, because the resort sees its most business in winter months for ski season.  Ski season brings high energy demands due to its snowmaking equipment. 

The installation process was a bit tedious -- it began in the fall of 2006 and required roads to be installed to reach the desired elevation.  Roads were built on existing ski paths.  Then the foundation was put in.  The following spring, parts began to arrive -- some of them jumbo-sized.  One part of the base weighed in at 64-tons and required four bulldozers to push to the top.  Installation was set back by heavy rains, logistical challenges, and ironically, high winds.

One big hassle was transporting the turbine rotors according to the resort's spokesperson.  They say the effort "Required a carefully choreographed effort between New York and Massachusetts power companies, safety officials, police departments and state troopers in two states, and the patience of motorists."

However, at long last the turbine was complete and ready to generate power.  It can produce power in winds from 6 to 55 MPH.  The blade speed is artificially controlled not to exceed 22 RPM to prevent damage in high winds.  The amount of power generate is not based on the wind speed, as most thing, but rather on the diameter of the rotors.  In the gearbox the mechanical engine is converted to 13,800 volts and then transported down the mountain in 4,000 feet of buried cables.

After all the trouble, the economics for the resort are looking good, though.  The turbine cost $3.9M USD, but a Massachusetts Technology Collaborative grant of $582,000 helped lessen the blow.  The resort will sell approximately $161,000 of electricity annually and receive a $46,000 tax credit annually.  It expects to thus be able to recoup the expenses in five or six years.  With most turbines having a lifetime of at least 20 years and many lasting far longer, the turbine could be a lucrative venture for the resort.

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Tax credit
By Brandon Hill (blog) on 8/21/2008 1:22:54 PM , Rating: 4
quote:
and receive a $46,000 tax credit annually


**Pulls up a lawn chair and cracks open a cold beer**




RE: Tax credit
By JasonMick (blog) on 8/21/2008 1:26:37 PM , Rating: 2
hehe. Well, I'm sure that part will be much maligned by critics, but if you consider they're making $161k a year, that's
$3.22M USD over 20 yrs, minimum, and if it were to operate for 30 yrs, $4.83M USD. This is aside from the savings at the resort itself, which surely costs thousands of dollars yearly to power.

The economics of the project stack up even without the subsidies, but the subsidies are nice as up-front costs are still very high, and the relatively new nature of this kind of adoption make financing it with loans tricky.


RE: Tax credit
By Master Kenobi (blog) on 8/21/2008 1:40:54 PM , Rating: 3
True. Coastal regions also tend to have higher regular winds so wind turbines make sense. I heard somewhere that one state was going to put some up in the ocean. While not a bad idea, I'm curious what happens when a hurricane comes through or a tropical storm. Perhaps under water turbines (Tidal generators?) would be a better option?


RE: Tax credit
By SiN on 8/21/2008 2:05:27 PM , Rating: 1
just try getting a tidal generator approved. you'll be hounded by nature reserve types about the impact such things would have on the wildlife.


RE: Tax credit
By Inkjammer on 8/21/2008 3:52:03 PM , Rating: 4
The fishstick industry could be sitting on a goldmine.


RE: Tax credit
By therealnickdanger on 8/21/2008 4:31:33 PM , Rating: 3
omnomnomnom


RE: Tax credit
By slashbinslashbash on 8/21/2008 4:39:50 PM , Rating: 2
Believe it or not, there are fellows here in Texas putting turbines offshore with hydraulic lifts to raise and lower the towers when hurricanes or other weather problems occur. At least according to this Wired Magazine article:

http://www.wired.com/wired/archive/15.02/wind.html

Although a glance at their website doesn't seem to mention it:

http://www.windenergypartners.biz/offshorewind.htm...

I wonder what they do with the blades when they lower the towers. *shrug*


RE: Tax credit
By millerm277 on 8/21/2008 11:23:29 PM , Rating: 3
When winds get too high for it to safely operate (obviously, there is an RPM limit on the gearbox and such), they have safety devices built in for the blades to disengage from the drive, allowing it to spin freely, without damaging the internals of the turbine. They do typically have a maximum wind speed they're rated to, not sure what it is, but I'd guess probably something in the 120-150mph range.


RE: Tax credit
By arazok on 8/21/2008 1:47:48 PM , Rating: 5
quote:
The economics of the project stack up even without the subsidies


Without subsidies, grants, or tax credits, a 3.9 million dollar investment that repays $161,000 /y, would take over 23 years to recoup the investment.

Economics only a socialist could love. Take another hit from the bong Jason.


RE: Tax credit
By jbartabas on 8/21/2008 2:01:18 PM , Rating: 3
You forgot to account for the savings on their energy bill.


RE: Tax credit
By arazok on 8/21/2008 2:15:49 PM , Rating: 3
It’s not mentioned in the article, so I can only assume any savings would be less then what they are selling to the utilities, as the utilities are forced to but this energy at above market value. Let’s say they save $80,000 a year in hydro.

Without subsidies, grants, or tax credits, a 3.9 million dollar investment that repays $241,000 /y, would take over 16 years to recoup the investment.

And this assumes nothing breaks down, and you have not borrowed any money to make the investment. Still a poor investment.


RE: Tax credit
By 67STANG on 8/21/2008 2:23:24 PM , Rating: 2
Assuming the arcticle is correct, they got hosed on the deal.... A 2.5MW turbine costs only $1.3 Million. They paid $3.9 Million for a 1.5MW?


RE: Tax credit
By masher2 (blog) on 8/21/2008 2:40:42 PM , Rating: 3
You forgot installation costs.


RE: Tax credit
By 67STANG on 8/21/2008 3:09:03 PM , Rating: 2
No... taking into account that a 1.5MW turbine costs less than a 2.5MW turbine.. you're saying they paid more than triple the cost of the actual turbine for installation costs?


RE: Tax credit
By masher2 (blog) on 8/21/2008 3:14:31 PM , Rating: 2
I'm not saying it. They are. I'm quite sure they know what they're being charged.


RE: Tax credit
By masher2 (blog) on 8/21/2008 3:21:25 PM , Rating: 2
Also, I strongly suspect your costs are only for the turbine itself, and not for the tower.


RE: Tax credit
By 67STANG on 8/21/2008 4:50:41 PM , Rating: 2
I would also assume they know what they are being charged... and no, the cost is for everything except installation and extended service.


RE: Tax credit
By mindless1 on 8/21/2008 8:13:02 PM , Rating: 2
Installation included road(s) and buried cable, transportation costs, etc. Project costs easily exceed the cost of the part itself by quite a lot. Ever had the brake pads on your car replaced at a shop?


RE: Tax credit
By s12033722 on 8/21/2008 3:32:21 PM , Rating: 2
Consider the fact that they had to build roads up a mountain to install it - that isn't cheap. It doesn't seem like a surprising total bill, but it does seem surprising that they would drop that much money for so little return per year.


RE: Tax credit
By Oregonian2 on 8/22/2008 2:56:58 PM , Rating: 2
Article says that they break even in 5 or 6 years. If their business is in the winter, their energy costs are probably quite high, more than the few thousand that someone suggested (just our house heating/cooling costs per year are something like that!).

Five or six years to break even means that after that period, their "internal" savings are a LOT more than the 160K of energy sales.


RE: Tax credit
By jbartabas on 8/21/2008 2:31:21 PM , Rating: 3
Well if you would have done a simple test of your hypothesis, you would have concluded that even with the present subsidies, tax credits, grants, etc ..., they would need at best ~16 years to break even, this even ignoring the interests on their loan.

Hence two solutions: 1/ their financial guy is insane to even think they might break even in 5-6 years, or 2/ your hypothesis are flat wrong ...

Considering the number for their energy production is in the text, and it is easy to figure an order of magnitude for the retail price of the kWh, I will let you do your homework and let you figure out the main aspect of their economics.


RE: Tax credit
By Ringold on 8/21/2008 3:01:40 PM , Rating: 3
quote:
1/ their financial guy is insane to even think they might break even in 5-6 years,


One thing that is likely influencing it is preferential deprecation treatment given to these projects not mentioned in the article. Such benefits are talked about here regarding Boone Pickens love for wind:

http://www.powermag.com/ExportedSite/BlogArticles/...


RE: Tax credit
By dever on 8/21/2008 6:17:58 PM , Rating: 2
Thanks for the link. It's sickening to see billioniares, with the help of socialist politicians, reaching into the pocket of tax-payers to buy their ivory back-scratchers. This is always the inevitable outcome of government trying to do social good.


RE: Tax credit
By triestokeepbrainon on 8/21/08, Rating: 0
RE: Tax credit
By masher2 (blog) on 8/21/2008 9:58:58 PM , Rating: 4
> "I think it is mostly because on average their populations are just better educated "

A well-educated populace would realize how many their ignorant anti-capitalist stance of penalizing the succesful hurts the entire nation and everyone in it. The per-capita GDP's of Denmark and Sweden are sharply lower than the US, a difference attributed in large part to their "educated" attitudes.


RE: Tax credit
By smitty3268 on 8/22/2008 12:29:58 AM , Rating: 1
And yet the have longer life expectancies and consistently report being happier with their lives than people in the US. Maybe they just have different priorities?

The poster calling Americans stupid was just trying to annoy people, though. That was a post intended to start a flamewar.


RE: Tax credit
By masher2 (blog) on 8/22/2008 11:43:46 AM , Rating: 3
> "And yet the have longer life expectancies ..."

Life expectancy at birth is a factor of genetics and, much more importantly, infant mortality. The US takes a hit because of a large number of crack babies, and still comes in almost equal Scandinavian countries.

> "...and consistently report being happier with their lives "

And thats why their suicide rates are so much higher than the US? Among men, its about a 20% increase, among women its over double.

(source: http://www.who.int/mental_health/prevention/suicid...


RE: Tax credit
By dever on 8/22/2008 2:02:49 PM , Rating: 2
A few years ago, Scientific American reported the highest self reported happiness was in poor, third world countries.

They speculated that the abundance of opportunity and choice in wealthy countries is what leads to lower (self-reported) happiness. If your'e living under a corrupt dictatorship, you may just be thrilled to be alive. But, when opportunity is limitless, you may be harder on yourself for not performing better and making more responsible choices.


RE: Tax credit
By triestokeepbrainon on 8/22/2008 4:56:59 PM , Rating: 1
Not trying to annoy people, just stating what I believe to be facts. Do you not believe that, on average, citizens of the US are more poorly educated than people from Sweden and Denmark (for examples, could of picked MANY other countries, that is the problem isn't it)?

Basically, i am associating many of the problems we have in the US today, with an overall, on average, poorly educated populace. In other words, large scale social problems go hand and hand with poorly educated masses.


RE: Tax credit
By triestokeepbrainon on 8/22/2008 4:44:58 PM , Rating: 2
The per capita gdp (depending on exactly how it is defined/measured) of Denmark and Sweden are quite similar to that of the US. Sometimes a little bit higher, sometimes a little bit less, but definitely in the same ballpark.

You seem to imply that they anti-capitalist. I would think they are very pro capitalism. They just have more government guidance than we do. They are still capitalists though.

There is no such thing as a pure free market, and you had better be thankful there isn't. If a truly free market really existed, we (the vast majority of all people) would be the slaves, serfs, peasants of a very small ruling class that had economic (and thus by extension, military) power. See JD Rockefeller (and his tool, Standard Oil of NJ) and his actions around 100 years ago.

To me, you seem to be saying that taxing the successful is penalizing them?

Flash newsbulletin: If there were NO taxes, there would be no society (as we know it). You (and I) would be living in a log cabin, eating rabbits, and burning wood for heat. None of the great scientific/technological advancements would have ever been made. Because there would of never been any public schools to educated the large numbers of people necessary to produce progress. A handful of self-educated people cannot make the advancements necessary for all the modern technology we take for granted. It takes millions of highly educated people to do it.

So I assume you might possibly mean that the successful are just taxed at too high a rate?

If bill gates had lived in a very poor third world country, but was just as knowledgeable and did just what he had done here, he wouldn't even have made thousands, let alone millions, or billions. Why? Because that country had no publicly supported infrastructure that created a marketplace (over many years) for his products. So, basically, Bill Gates owes a very large part of his success to this country, and specifically to its publicly funded institutions and their derivatives (an economically viable marketplace). So what is a "fair" tax rate for him? I would say somewhere in the 25% to 50% range would be about right. But that is certainly debatable about the exact level.

Maybe their well educated population realizes that successful people have a duty to give back to the country that lets them be successful?


RE: Tax credit
By BansheeX on 8/22/2008 9:19:34 AM , Rating: 2
quote:
While I don't think it is inevitable, it does seem fairly common in the US.


No, it's inevitable. Just like seeing dictatorship powers abused and incurring costs far greater than if you had divided that power up and made it harder to abuse. Humans are just naturally gullible, they're always looking for the easy way out. Socialists take advantage of this and are able to sell new powers based on the absurd expectation of moral, intelligent, and selfless people always exercising them. To them, it's inefficient to decentralize power or force companies to try and win your money in the market rather than bribe politicians for it. All we need is some godlike academic figure to "choose" the winning product. But it rarely gets done with any thrift because a wrong decision or a collusive decision isn't the politician's loss to incur, it's not his money. So we get stuff like oil and ethanol subsidies while less lobby-capable things like nuclear get blocked and protested for thirty years. Then they'll point to short-term successes in some small country somewhere, not realizing that the power can err or be abused at any time. And years down the road when this happens, it was never because the power itself was too much, or the underlying concept was flawed, it was because "the wrong academic" was in there, or heck they'll just blame the companies themselves. SS looked like it worked pretty well for a while, as all ponzi schemes do, and then as time went on the original 2% tax rate ballooned to 12% after the trust fund was raided and the generational dependency became disproportionate. It will likely crush payee livelihood at 20% of wages in a horrible economy before getting the public support to being abolished in favor of personal savings. And what is the resounding excuse from the socialists who started it: oh, it was doing fine until THAT GUY came along, and THIS CONGRESS, and THAT ONE, and HIM and HIM. And they act surprised that their dictatorial program wasn't dictator-proof.

Instead of just accepting a fair, safe, and efficient system that leaves companies to their own devices, they want to fiddle with it, and by doing so they enable all kinds of collusive activity that otherwise wouldn't exist.


RE: Tax credit
By dever on 8/22/2008 2:07:51 PM , Rating: 2
Thank you.

In a nutshell, an increased government footprint creates an increased surface area for corruption.

And, since governments are the only entities that can legally force submission on all citizens, corruption of government is infinitely worse than corruption of private companies.


RE: Tax credit
By Solandri on 8/21/2008 4:55:25 PM , Rating: 3
It makes a helluva lot more sense than the solar station Oregon is building.

Oregon government:
$1.3 million
104 kW
112,000 kWh per year

Massachusetts resort:
$3.9 million
1500 kW
4,600,000 kWh per year


RE: Tax credit
By triestokeepbrainon on 8/21/2008 2:59:54 PM , Rating: 2
4.6 million kWH @ $0.15/kWH is around $690k/year. So if they are selling around $160k/year, their old energy bills probably averaged around $530k/year. Easily a very good investment.


RE: Tax credit
By Nik00117 on 8/21/08, Rating: 0
RE: Tax credit
By JustTom on 8/21/2008 5:48:39 PM , Rating: 4
There is one problem with your analysis: You made up most of the numbers.

A 50K monthly return on an investment of 3.3 million is almost 20% per year. There is nothing 'modest' about 20% returns. If this installation, with all its construction problems, can make 20% on its investment you'd be seeing wind turbines everywhere.


RE: Tax credit
By triestokeepbrainon on 8/21/2008 6:00:24 PM , Rating: 2
You have absolutely no idea how incredibly stupid, incompetent, and greedy our senior executives are in the US. The only things they think about are: firing more US workers, lowering wages/benefits for those remaining, lowering the quality of their products, and

Primarily, giving themselves more bonuses.

They have absolutely no intention of coming up with innovative solutions to problems.


RE: Tax credit
By SilthDraeth on 8/21/2008 6:25:08 PM , Rating: 1
They aint that stupid if they are at the top giving themselves bonuses, and bleeding money while you sit at the bottom getting payed $15 bucks an hour and bitching.

I would say they are the smart ones.


RE: Tax credit
By triestokeepbrainon on 8/21/2008 8:44:19 PM , Rating: 2
Well, anyone can define "smart" any way they want to. But that doesn't mean they are right. You can believe the moon is made of cheese, or that the world is flat if you want. But you would still be wrong.

Basically, the vast majority of US senior executives have been driven by greed, short-sightedness, and self-centeredness for many years now. They constantly make decisions that benefit themselves (and a small group of others) at the expense of the long term interests of the company, the workers, the shareholders, and the customers.

If you will look at Christian AND non-Christian moral, philosophical, logical, and economical reasoning since recorded history began, you will find that they (senior execs today) will not be defined as "smart".

Isn't it a sad state of affairs when the people getting ripped off (namely, you), support the people who are doing it to them? Isn't that one of the definitions of brainwashed?


RE: Tax credit
By masher2 (blog) on 8/21/2008 10:01:20 PM , Rating: 2
> "Isn't it a sad state of affairs when the people getting ripped off (namely, you), support the people who are doing it to them?"

I'm curious how you feel you're being "ripped off" by the owners of a company deciding to pay their top management a healthy salary? It's their money, not yours.

> "Basically, the vast majority of US senior executives have been driven by greed, short-sightedness, and self-centeredness for many years now"

That "greed" is actually a drive to excel, and that collective attitude of US businesses has made this nation the richest, most powerful one on the planet. Let's hope it never changes.


RE: Tax credit
By triestokeepbrainon on 8/22/2008 5:42:10 PM , Rating: 2
It isn't just me, it is probably 98% of the US population. What if the excessive CEO compensation was spent on R&D to improve the company, making it more successful in the long run? Not only the shareholders would benefit in the long term (because the company was more competitive), but the entire country would indirectly benefit. The more strong companies we have in the US, the better we all are in the long run. Simple economics.

Do you really believe that even 10% of the shareholders of Home Depot stock would of voted to give the outgoing CEO a $230 million bonus, after the stock price was down around 50% in 4 or 5 years? Of course, not. Frankly, wouldn't you call people who would stupid? If they had voted they wouldn't have. But they didn't vote, the BOD did. So why did the BOD do what was obviously not supported by the shareholders? (1) The shareholders, as a group, are brainwashed sheep, ready to be sheared. (2)They have no fear of the DOJ stepping in and protecting the shareholders (because a handful of bush political appointments control the DOJ). (3)They voted themselves excessive bonuses too, even though company performance was poor over that time period. Performance that they were responsible for.

While the US is still the richest and most powerful nation, it is in definite decline. Average returns for the S&P 500 since the early 90's are below the long term average returns and actually the lowest since the 1930's. This is exactly the same time period in which senior executive compensation has skyrocketed. Go do your research and see how much CEO made in 1990 for the largest US companies. And look at BOD compensation too. You'll probably be shocked. Many CEOs only made around a million a year, sometimes less. Members of the board were making like $50k per year (it is just a part time job after all). They have consistently rewarded themselves excessively, for poor long term performance.

What if all that excessive compenstion had been spent on R&D? Wouldn't all these companies be in better long term shape now? This plundering of our large companies, and thus weakening them in the long term, is slowly but surely harming the economic future of all americans.

And don't attribute the many gigantic successes of american businesses (mostly in the past) to the greed of present day senior executives. They are not helping, they are hurting. Basic statistics teaches that correlation is not causation. Thousands of hard working, well educated employees, making relatively modest wages, are one of the primary factors in producing US business successes.

Executive greed is not producing the successes, it is keeping the companies from being more successful. They are leaches.


RE: Tax credit
By SilthDraeth on 8/22/2008 12:06:32 AM , Rating: 2
I apologize for the tone of my post.

But you are dead wrong about business execs. Sure some may be in it for greed. But then the business fails. Most businesses that make enough to pay their execs millions are obviously doing something right.

I would say public officials being voted into place, and failing are the short sighted self centered, lazy and greedy people in America.

Businesses must operate at a profit or fail. Government with few exceptions of some states, and cities/counties operate at a loss, despite increasing taxes, and increased revenues.

Sort of like the problem that plagues the entire country. Buy it now on credit, and if you can't pay it off, who cares.


RE: Tax credit
By triestokeepbrainon on 8/22/2008 6:00:08 PM , Rating: 2
My entire point is that executives are giving themselves gigantic bonuses, while doing a bad job of running the companies. Making the companies less profitable. Having poor long term stock price appreciation. Cutting R&D, and thus making the companies less competitive in the future.

But they still give themselves humongous bonuses. The Home Depot guy got $230million after lowering the stock price by 50% over several years (around 4 i think). And the majority of executives are quite similar.

You seem to think that these companies are doing well, and executives are just being rewarded for a good job. Wrong, wrong, wrong.

Public officials are, yes, just as bad. They are working hand in hand with crooked executives. That's exactly why our county is slowly, but surely, going down the tubes. Companies couldn't get obscenely overpriced no-bid contracts unless the politicians were working with them.


RE: Tax credit
By dever on 8/22/2008 2:19:04 PM , Rating: 2
quote:
(senior execs today) will not be defined as "smart".

If they are making stupid choices (like some most likely are) then their prices, products and consequently, their position in the market will suffer. You have the freedom to choose something else or even compete with them yourself.

quote:
Isn't it a sad state of affairs when the people getting ripped off (namely, you), support the people who are doing it to them? Isn't that one of the definitions of brainwashed?
First, you're only supporting them if you decide to buy their prodcuts.

Let me get this straight... those who desire freedom of individual choice are brainwashed, but, those like you, who wish to give up thier freedom of choice as consumers, earners and producers are "not brainwashed?"


RE: Tax credit
By ZmaxDP on 8/21/2008 7:21:56 PM , Rating: 2
Ahh, how easy it is to blame others...

Don't get me wrong, I don't like their salaries, or their bonuses any more than the next john doe three years out of college. But, I'm not going to blame those things on them alone. They can take their share of it, but wall street has way more to do with the short-sighted strategies most publicly traded companies pursue in order to pander to the all-mighty stock market. Executives demand huge compensation and bonuses because if something completely outside of their control screws up the company they'll be fired in effigy and have their reputation trashed in order to preserve the company's reputation. It's a dog eat dog world, and you and I are as much to blame for the state it is in as Bill Gates.


RE: Tax credit
By triestokeepbrainon on 8/21/2008 9:33:58 PM , Rating: 2
Of course it isn't all their fault. But the vast, vast majority of the blame has to be on them. They have the power, and the responsibility to use that power ethically. Both morally and economically.

If you haven't figured out that the number of jobs, the wages, and the benefits of US employees are being negatively affected by excessive senior executive bonuses/compensation, you haven't been paying attention. Or you just don't understand what is going on.

Don't you understand that wall street "supports" this so that their senior executives can justify their excessive compensation? And any lower level wall street employee who doesn't support this in print or on the air will be fired?

They deserve to make tens and hundreds of millions because they might have "their reputation trashed"? Do you really believe that?

Basically these guys are like bank managers who have the key to the vault. It is dependent upon their code of honor for them not to go in and steal stuff. If they do go in and steal stuff, it is mostly, but not completely, their fault.

It is partially my fault in that I haven't started shareholder/employee revolts against their greedy actions. But that seems to be a much lower level of responsibility on me, with the vast majority of fault on them.


RE: Tax credit
By masher2 (blog) on 8/21/2008 9:51:34 PM , Rating: 2
> "Basically these guys are like bank managers who have the key to the vault"

Corporations are owned by stockholders, who collectively decide on how much executives should be paid. In short, it's *their* company, not yours. If they're happy with the salary they've chosen to pay their employees, then its no one else's business to interfere.


RE: Tax credit
By triestokeepbrainon on 8/21/2008 11:19:35 PM , Rating: 2
How do you know that I don't own stocks in many of these companies? I have owned individual stocks since 1981, and mutual funds since 1988. And doesn't one share of a S&P 500 index fund make me an owner of all of them (companies in the S&P 500 of course).

Are you saying that you think that as long as the BOD says it is ok, that it is? Or that if 51% (or more) of the shareholders said it was ok for the ceo to take all the money it would be ok? Well, if you are, sorry you are legally (and of course morally) wrong on both counts. This is fairly technical and concerns the legal rights of minorities. But basically it is similar to the principle that 51% (or more) of the people can't vote to take away things from the minority (49% or less). Even if it a very small minority.

It is the fiduciary (legal) responsibility of the senior executives to do what is in the best interest of the shareholders, not a certain fraction of them, all of them. This is OBVIOUSLY not being enforced by the present administration's justice department. For example, the former CEO of Home Depot gave himself around a $230 million departing bonus after about 4 years or so at the helm. But the stock price of Home Depot had actually went down around 50% or so in that time period. That is OBVIOUSLY not in the best interest of the shareholders. Yet nothing has been done. And it doesn't even matter if 99% of the shareholders did approved of this (i'm pretty sure they didn't), laws are generally there to protect the little guy. The DOJ would still legally have to prosecute even if just a few complained. Or actually even if nobody did. Rules are rules. They are there to protect everyone, even if everyone doesn't understand them.

And yes I can hear it now, you're going to say that I should vote the BOD out. Well yes, that should happen. But that doesn't change the fact that something was done that is OBVIOUSLY illegal. And the department of justice, which is supposed to protect its citizens and enforce the laws isn't doing its job. (Of course this is because the present administration got major campaign contributions from these crooks, and will make even more money working with the crooks, when they get out of office. See historical articles about Cheney getting out of government, then making big money at Halliburton, etc)

Finally, even if I wasn't a shareholder, large corporations do have some responsibility to their country, both morally and legally. To a certain degree, actions that negatively affect the country in the long term can, should, and have been stopped/discouraged in the past, and will be in the future (if some people in the DOJ will do their jobs). This is basically the same principle that you and I have to follow concerning our rights; we have all the rights in the world, until we start negatively affecting those around us.

For example, what if Exxon said they were shutting down all their refineries tomorrow, specifically to drive up the price of gas to $1000 per gallon. Oh, and those good old greedy, shortsighted, shareholders voted for it. Would it be ok? Of course, not. Everyone, including corporations, have some responsibilities for the "greater good". If this wasn't so, society itself couldn't exist.


RE: Tax credit
By JustTom on 8/22/2008 9:21:28 AM , Rating: 2
quote:
The DOJ would still legally have to prosecute even if just a few complained. Or actually even if nobody did. Rules are rules. They are there to protect everyone, even if everyone doesn't understand them.


This is incorrect. The DOJ, or any prosecutor, tries cases when it believes a crime has been committed, they know who committed the crime, they can prove the alleged did in fact commit the crime, and it is worth their resources to try said crime. Just because a few people complain about what they believe is criminal activity the DOJ has no obligation to prosecute. If this was true all one would need to do is make allegations about people one did not like.


RE: Tax credit
By masher2 (blog) on 8/22/2008 11:52:38 AM , Rating: 1
> "Doesn't one share of a S&P 500 index fund make me an owner of all of them (companies in the S&P 500 of course)."

Yes. It also makes you an incredibly insignificant owner, outvoted by those who own a far larger share. If you don't like how "your" company is being run, buy more stock in it.

> "Or that if 51% (or more) of the shareholders said it was ok for the ceo to take all the money it would be ok?"

This is a strawman argument. To see, let me recast what you're saying. What if 51% of a country voted to legalize slavery, rape, and murder? That would obviously be both unethical and unconstitutional. But does that invalidate the entire principle of democracy? Of course not.

Your argument fails utterly.

> "For example, what if Exxon said they were shutting down all their refineries tomorrow, specifically to drive up the price of gas to $1000 per gallon"

Why is it you people can never make sense? If Exxon "shut down all their refineries", they wouldn't make a penny off rising gas prices, now would they?


RE: Tax credit
By Calin on 8/22/2008 4:50:55 AM , Rating: 2
One more thing - they now have plenty of electricity, while their previous contract might have allowed them only a limited power, or price jumps if they go over a limited power.
I've been thru this (limited power at work), and it isn't nice.


RE: Tax credit
By ZmaxDP on 8/21/2008 5:24:51 PM , Rating: 2
"...as the utilities are forced to but this energy at above market value."

This isn't my state, so I can't say for sure. But I'm well aware of how individuals with power generation equipment (from solar panels to wind turbines to small scale hydro) are paid in Texas and it is well below market value. Only large installations have the energy capacity to negotiate decent energy purchase rates from TXU. A small residential installation putting a hundred watts into the grid here or there is getting a small fraction from the energy company of what they pay for a kW. That's why you only spec enough to balance out the meter. You make money by not paying the utility company, not by getting paid by them.

The actual rate varies by state and municipality as there is no governing national legislation that specifies and amount - only legislation requiring payment. A small utility company made the news a few weeks after that passed for "meeting the requirements of the law" by offering its customers who were generating power something like .0001 cents per kW. A little absurd all in all.

So, in that state, and in that municipality, and in that situation, perhaps you're right. Or perhaps not. Research it to find out. Don't just assume so because it isn't true everywhere.


RE: Tax credit
By foolsgambit11 on 8/21/2008 7:13:06 PM , Rating: 2
PURPA requires that States implement a system for small power producers to sell power back to the grid. That power must be purchased at a price no less than the power company's 'avoided cost'. The avoided cost is sometimes calculated (oversimply, perhaps) as fuel costs that the power company pays.

So the regulation doesn't specify a specific amount (that would be nearly impossible to do fairly on a national level), but it does specify a method of pricing energy which takes into account market forces and changing costs pretty well. It also protects non-fossil fuel power producers (hydro, nuclear, solar, wind, geothermal, whatever. Whoever has low to non-existent fuel costs) from adverse consequences. All of these power stations were built based on certain assumptions about amortization of initial expenses, capacity utilization and operating costs versus operating profits. Dramatically changing their profit point by forcing them to buy power at a rate similar to what we'd expect coal plants to pay would essentially render them impractical from a business standpoint. Setting the buyback price as fuel costs favors 'cleaner' power producers. It may not be a perfect system, but it's pretty good for bureaucracy.

Anyway, maybe this place you're talking about ran off nuclear? Or hydro? Or maybe the state had failed to properly implement federal guidelines. Either way, many states (not all, you are correct) have beefed up the federal guidelines to force power companies to pay market rate for power provided (a 'net metering' policy, where the meter essentially goes backwards when you produce power).

For a summary of federal guidelines, see http://www.eere.energy.gov/consumer/your_home/elec...


RE: Tax credit
By SandmanWN on 8/21/2008 2:03:58 PM , Rating: 2
Not to mention the declining profits when the next turbine goes live a few miles down the road. Every time a new generator goes live your ability to recoup cost greatly diminishes. With such a large push for alternative energy this article needs to take into account that its very likely more competition will come into the market from many different vendors and putting a severe hamper of recouping costs.


RE: Tax credit
By PrinceGaz on 8/21/2008 4:26:12 PM , Rating: 2
Rubbish. If another big turbine goes live a few miles down the road, the effect on this turbine will be negligible. It's not like a single wind-turbine can magically reduce the wind-strength over a wide area; the effect is quite localised and only in one direction at a time. And far from making it more difficult to recoup costs, more competition from different vendors is likely to reduce the costs of turbines therefore making it easier to recoup costs.

If they have access to a suitable river though, they'd have been better off building a nuclear power station, though the initial investment required would have been somewhat higher than that of the wind-turbine.


RE: Tax credit
By SandmanWN on 8/21/2008 5:27:52 PM , Rating: 2
wind strength? who said anything about wind strength. I have no idea what you are rambling on about.

In a small resort town like this where a single turbine can run 600+ homes whats to stop someone else from putting another turbine a mile away and selling their excess at half price? Nothing. Instantly this resorts 6yr plan is garbage and jumps to 12yrs. A third turbine enters the market and undercuts the other two. The power grid doesn't need all three, takes the two new comers and stops buying from the 1st turbine. Now they are stuck with a 30yr recoup plan and the maintenance bills keep on rising.

We are on a 10 year knock down drag out explosion of new energy sources. The only thing rubbish is your limited ability to see someone else stepping into the market and ruining this little resorts recoup plans.


RE: Tax credit
By Solandri on 8/21/2008 5:39:01 PM , Rating: 2
Market forces dictate that it's highly unlikely for a new entrant to the market to sell their electricity at half the cost of their neighbors. If the market price is 15 cents per kWh, and you can sell it at 8 cents but can't find buyers, you're not going to sell it at 8 cents. You're going to drop the prices the minimum amount needed to assure enough buyers to sell all you can produce, which probably means 14.9 cents. So if new power sources are added, there will only be an incremental drop in prices averaged across all the electricity produced in that corner of the U.S.


RE: Tax credit
By Solandri on 8/21/2008 6:00:02 PM , Rating: 2
Also, minor correction in the article. The text says power the appliances in 613 homes, while the picture caption says 613 homes. Average annual power use in the U.S. in 2001 was 10650 kWh. So 4.6 million kWh works out to 432 homes.


RE: Tax credit
By psychobriggsy on 8/21/2008 2:09:07 PM , Rating: 2
I can only assume that the resort's electricity bill was on the region of $500k a year prior to the installation, and that the turbine is actually generating (at retail rates) $(3900000 - 582000) / 6 + 200000 worth of electricity every year, if they intend to have it break even after 6 years.


RE: Tax credit
By psychobriggsy on 8/21/2008 2:13:26 PM , Rating: 2
Actually, 4,600,000 kWh per annum, at say 15 cents (I have no idea of electricity prices for businesses in that part of the world) per kWh would be $690,000 income, so that actually does justify the recouping of cost in 6 years or so.


RE: Tax credit
By jbartabas on 8/21/2008 2:20:10 PM , Rating: 2
They generate 4.6 million kWh (I am assuming per year). The average retail price in MA is 15 cents a kWh. That's $690,000 a year. Hence that's about 5 years to recoup the investment, neglecting maintenance costs and tax credits. (and ignoring the excess energy that they sell, assuming all energy is used).

Without the grant, it's more like 6 years to recoup the investment.


RE: Tax credit
By masher2 (blog) on 8/21/2008 2:57:42 PM , Rating: 2
You can't sell power to a utility at retail rates -- not without government interference in the market, that is, which ultimately means the consumer is going to pay the difference eventually.

Even in New England, one of the most expensive markets for electricity in the nation, wholesale prices for power run about half the retail cost. The difference is what the utility uses to build, maintain, and operate the power grid, pay the costs to read meters, bill consumers, etc.


RE: Tax credit
By jbartabas on 8/21/2008 3:58:57 PM , Rating: 2
The fraction of their production that they would would be at ~15 cents/kWh.

As for the excess fraction they sell, the issue is that's pretty hard to know how much energy it represents as, as you said, we can't really know how much they sell it for, so how much of it they sell. I have made a rough estimate of the lower bound in the other thread.


RE: Tax credit
By foolsgambit11 on 8/21/2008 7:43:39 PM , Rating: 2
Okay. Everybody. We don't have to assume anything. Follow the link to the article on Information Week, then follow the link in that article to the Wall Street Journal article and you will see this line:

In Jiminy's case, the windmill could save the resort a bundle on its electricity bill -- an estimated savings of $368,000 per year

You'll also see that the operating costs of the windmill are expected to be on the order of $60k to $100k. So everybody factor that into your calculations. Still, the owner expects to have his portion of the total cost (a $1.8 million 10-year bank loan) paid off in 7 years. Not surprisingly, the Wall Street Journal article goes much more in depth about the economics of it.


RE: Tax credit
By jbartabas on 8/22/2008 2:29:15 PM , Rating: 2
Thanks for the numbers, that makes things clearer. ;-)


RE: Tax credit
By masher2 (blog) on 8/21/2008 1:57:10 PM , Rating: 4
> "but if you consider they're making $161k a year"

They're only making $161K/year because utilities are being required to purchase their generated power at above-market rates. If that electricity was being sold for the wholesale rate for commercially-generated power from conventional sources, the figure would be far lower.

> "and if it were to operate for 30 yrs, $4.83M USD"

Assuming the windmill requires zero maintenance or operating costs over the next 30 years. How likely do you think that is?


RE: Tax credit
By masher2 (blog) on 8/21/2008 2:02:11 PM , Rating: 2
I won't even go into the trees taken down, or the amount of concrete which had to be produced and steel which had to be mined -- all the produce only enough power for 600 homes *when* the wind is blowing strong, and zero homes when it isn't.

Multiply this by the millions of towers needed to fully power the US, and one gets an idea of the true environmental footprint of wind power.


RE: Tax credit
By qdemn7 on 8/21/2008 2:08:33 PM , Rating: 2
So what's your point? We shouldn't use wind power because of the environmental footprint? As if the environmental footprint of oil and gas well and coal mines is less?

BTW, there's plenty of places with no trees to worry about, like W. Texas. Plenty of nice flat land with no "environment" to speak of.


RE: Tax credit
By masher2 (blog) on 8/21/2008 2:11:44 PM , Rating: 4
> "As if the environmental footprint of oil and gas well and coal mines is less?"

No, of course not. But wind (and solar, for that matter) is still a worse solution than nuclear power. Nuclear is also much cheaper as well...and it generates power all the time, not just when the wind blows. Shouldn't we use the best solution for the problem?

> "Plenty of nice flat land with no "environment" to speak of. "

There's far more plant and animal life in Texas than there is in ANWR...yet certain people don't want to drill there because it might "disturb the environment".


RE: Tax credit
By jimbojimbo on 8/21/2008 2:40:26 PM , Rating: 2
If anybody's selling a nuclear power plant that will fit in my apartment, give me a call.


RE: Tax credit
By FITCamaro on 8/21/2008 5:50:20 PM , Rating: 2
When someone starts selling a wind generator that fits in my apartment, can actually power my apartment 100%, and does so 100% of the time, give me a call.


RE: Tax credit
By Yossarian22 on 8/22/2008 3:02:57 AM , Rating: 2
I hope this was not an attempt at a witty response.


RE: Tax credit
By TheDoc9 on 8/21/2008 3:21:29 PM , Rating: 2
I was thinking the same thing about Texas, while not a rain forest it's not exactly devoid of life.

There's always value to be found in land, giving up 200,000 acres of it for a crop of windmills isn't the best use of it.


RE: Tax credit
By randomly on 8/21/2008 4:06:46 PM , Rating: 2
Nuclear is not clearly better than wind or solar power. It does not all come down to base cost per KWh. Nuclear has some major drawbacks which restrict location such as huge water requirements for cooling, fuel handling and security, and proliferation concerns. Probably the most discouraging aspect is the extremely high capital outlay required and the roughly 10 years it takes to get a plant built and running.

Sure nuclear fuel is cheap, but the huge start up costs to get a nuclear plant running is often a show stopper. Smaller capacity distributed generation capacity like wind can be a better match in lots of locations.

Wind and solar have big advantages in that infrastructure can be built rapidly and in small chunks, expanded as needed etc. That low buy in price and speed of deployment is a major advantage over nuclear.

Sure Nuclear can run 24/7 and that's a valuable feature and it would be good to have a base of nuclear power in the country but it's not a one size fits all situation, and wind/solar power has an increasing niche to fill as the cost of renewable energy continues to drop.

China is a good example, they can build nuclear power plants and they do, but they are also building wind power infrastructure at an astonishing rate. Why? because it makes economic sense.


RE: Tax credit
By masher2 (blog) on 8/21/2008 4:10:34 PM , Rating: 2
> "Nuclear has some major drawbacks which restrict location such as huge water requirements for cooling"

No. Closed-cycle reactors don't need a continual water input. And even for open-cycle reactors, waste water can easily be used. The largest nuclear plant in the US (Palo Verde) is located in the middle of the Arizona desert. It's cooled by sewage piped in from Pheonix.


RE: Tax credit
By randomly on 8/21/2008 4:31:04 PM , Rating: 2
it's also the ONLY nuclear generator in the world not located next to a large body of water. There is a significant cost impact for not constructing next to a large water supply. Whether it's fresh, salt, or waste water, you still need a lot of it and thus it constrains your locations.


RE: Tax credit
By masher2 (blog) on 8/21/2008 5:09:13 PM , Rating: 2
> "it's also the ONLY nuclear generator in the world not located next to a large body of water."

What's your point? Palo Verde proves it can be done. The only reason its done seen more often is that there is almost always a river, lake, or sea conveniently nearby. But when there's not, you can use wastewater, or even go with a closed-loop design that requires no continual water input at all. There are even reactor designs that don't use water for cooling at all.

A nuclear reactor can be sited anywhere. This isn't true with wind or solar.


RE: Tax credit
By ZmaxDP on 8/21/08, Rating: 0
RE: Tax credit
By Phlargo on 8/21/2008 6:29:02 PM , Rating: 2
quote:
So, why don't you put away the Nuclear Cheer Leader uniform and give some props to a business that found a way to make small scale alternative energy work for them. Not everyone has 10B dollars laying around to build a nuclear power plant in the middle of the desert...


That's hilarious writing, friend. Thanks for making me smile :)