Near New York Harbor stands a 400-foot-high monument, a tall alloy structure fixed against the skyline and recognizable from miles away.
If you think this reference is to the Statue of Liberty, you’re wrong. The broken Bayonne wind turbine has become a local icon to a failed national infrastructure program.
In 2009, the nation had seen better days. Deep amid an economic recession, President Obama needed to invigorate the economy. The approach was complex but worthy – to create a stimulus package of “shovel-ready” projects that tackled job creation, confronted the issue of the nation’s aging infrastructure, and expedited the transition to green energy. As a result, the $840 billion American Recovery and Reinvestment Act was signed into law, and cities across the country started crafting projects to guide chunks of funding into their communities.
Bayonne pitched an urban wind turbine design to offset the electricity costs of a water treatment facility and foster a clean energy policy. Armed with a concept that would touch on all three planks of the recovery plan, Bayonne was awarded roughly $4.7 million of the project’s $5.6 million price tag. The state of New Jersey promised the difference to demonstrate their support and showcase their efforts to encourage green projects. At no buildout or financing cost to the city and with the potential to save taxpayers $300,000 annually through environmentally friendly wind power, this project only had upside, right?
It turns out this “no brainer” project became the poster child for infrastructure stimulus insolvency. First came the policy hiccups. When Bayonne officials developed the plan, New Jersey had not yet contemplated building wind turbines in urban areas. Before layouts could get underway, the project was stalled until local and state agencies hashed out regulatory bounds. By the time lawmakers codified the local and state law compliance piece, another component went awry. When an initial American turbine supplier withdrew, it left Bayonne scrambling for a new distributor. They turned to Leitner-Poma, a firm traditionally focused on constructing ski lifts and tram transport. Although Leitner-Poma is headquartered in Colorado, its wind turbines are manufactured in Italy, which meant the city had to appeal for an exemption to the act’s “buy American” clause, causing more delays.
By the time workers on the “shovel-ready” project finally had an actual shovel in their hands, it was nearly three years past the date of Bayonne’s initial application. Yet, early forecasts estimated the city would save over $7 million over 25 years.
That optimism was short-lived. Much in the way that the local government did not initially have laws ready for such an innovative project, neither was it prepared for maintenance issues. As a result, when the turbine breaks down, it is a multipronged problem for the city:
- The city has to pay for the repairs and lose the cost savings from wind energy.
- They have to find parts and specialists from across the world, which happened twice in just the first three years of operation, costing over $1 million in repairs and nearly $300,000 in electricity savings and rebates.
- The wind turbine requires approximately $100,000 in annual routine maintenance, and the entire unit is out of manufacturer warranty.
The system has virtually become an unignorable embarrassment. Initial estimates stated that the project would be able to pay back its costs within 10 years. At the current rate of return, it will take nearly 30 years, far exceeding the unit’s useful life. Tack on an additional five to eight years, considering the cost of repairs.
As President Biden takes steps to implement a series of infrastructure bills, he must not repeat some of the failed policies of Obama. Instead, the federal government should provide state and local governments with outcome-driven funding for the maintenance and expansion. This includes growing broadband capacity, enhanced airports, and making sure our bridges, tunnels and buildings are not in danger of collapse. Additionally, lead pipe remediation is needed in most communities, improving quality drinking water for millions.
It is no secret that deferred maintenance is a critical issue for the nation’s decaying infrastructure. The bill should include new green initiatives; however, more oversight is needed for project proposal approval. For example, when reviewing the Bayonne project, federal officials should have considered feasibility and impact.
While the proposed legislation will focus on hiring local union trades and buying American, these measures must facilitate the projects’ efficient buildout. Smart, dynamic investment in infrastructure is what we need. If hundreds of billions of dollars in new spending are passed this year in the infrastructure agreement, policymakers need to do a better job at allocation. They must pressure test each spending component of the bill for effectiveness and efficiency. Rushed and sloppy spending means a loss for all.
John J. Metro is the city manager of Jersey City and currently serves on the national budget committee for the Governmental Financial Officers Association.
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