September 23, 2013
Editorials, Oregon

$30 million in BETCs for Shepherds Flat wind farm? State needs to explain it better

By The Oregonian Editorial Board | September 22, 2013 |

Everybody has a different lawyer story. But most could agree on is this: Lawyers typically answer only what they’re asked. And that, while a laudable rigor of the profession, can bring complication. If a client has good reason to believe the sky is falling but asks about the weather, a full and accurate answer could be: sunny.

Now comes the Oregon Department of Energy, under fire for possibly doling out $30 million in tax credits to the Shepherds Flat wind farm in north-central Oregon when it might have been entitled only to $10 million. In response to extensive reporting by The Oregonian’s Ted Sickinger, who found the wind farm’s owners split the facility into three to claim three $10-million credits when it otherwise would have qualified for one, the energy department committed to an independent review by the Oregon Department of Justice of its issuance of Business Energy Tax Credits. And the DOJ’s opinion, made public last week, is a narrow, if 11-page, answer to the wrong question.

The opinion states that the ODE probably had the legal authority to do what it did. Bravo. The DOJ went on to suggest the energy department, though vulnerable to a lawsuit over the BETCs, would in all likelihood not get sued because few to no parties would have the legal standing to do so. Whew: Skies are clear.

The uselessness of the DOJ’s opinion set the tone for a legislative hearing last week, also in response to Sickinger’s reporting, in which energy department officials glossed over the key questions they’d never asked of the DOJ: Did they adequately investigate whether the wind farm under review was one or three under the same owners? And did the department work in a manner that allowed it to stand back enough to note whether the sky was falling?

The answer is no. And storm clouds are ahead. Some folks, among them Rep. Jules Bailey, said Shephherds Flat-style challenges are behind us. Others, however, among them Rep. Jason Conger, asked the department to follow up by answering the right questions.

It’s worth noting Conger is a lawyer. But he’s the one doing the asking now, and his first and ugly question is hardly myopic and thus ours, too: Did the Shepherds Flat wind farm applicant furnish misinformation to state officials, and if so, was the misinformation of such a scale that it would warrant recovery of some or all of $30 million for Oregon taxpayers?

The DOJ opinion suggests recovery would be fruitless because the tax credits were passed through to others beyond Oregon’s collection reach. But Conger, who notes recovery is not an option if the energy department did the fumbling, insists misinformation by an applicant makes the applicant responsible and available to collection.

Nobody in any official capacity has decided anything, much less whether Shepherds Flat got a sweet deal that needs undoing. The wind farm is up and running and, based on testimony from Gilliam and Morrow counties, a surge to employment and the local economy. Nobody, official or otherwise, wants to upset that circumstance.

But the energy department has a task immediately ahead before yet another legislative hearing on the subject: It must tell lawmakers, who represent the Oregonians who underwrite incentive programs such as the BETC, whether Shepherds Flat got a deal too good to be true and whether it knows the right questions are being asked of an energy-producing applicant. Better yet, it must show what processes it has in place to ensure the right questions are being asked so that answers are pertinent.

[rest of article available at source]

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