Forbes
June 17, 2022
Five years ago, K. Darlene Park, a homeowner and anti-wind activist in Frostburg, Maryland, explained to me why she and so many other rural Americans are fighting the encroachment of large wind and solar projects. “We feel this renewable energy push is an attack on rural America,” she said.
Of course, that’s not the narrative that alternative-energy companies, climate activists, and top officials in the Biden administration are promoting. Instead, they claim that wind and solar energy are “less expensive” than traditional forms of energy and that big renewable projects should be welcomed by rural landowners. But the truth is that communities all across America are rejecting or restricting these projects. As can be seen in the Renewable Rejection Database, more than 330 communities have rejected wind projects since 2015. In addition, at least 38 solar projects have been rejected since 2017.
As siting wind and solar projects has gotten more difficult, big renewable companies are resorting to hardball legal tactics. The latest example came last month when Chicago-based Invenergy, the world’s largest privately held renewable energy company, sued Worth County, Iowa as part of an effort to force the county to accept a wind project the county doesn’t want.
The fight started in April 2021, when the Worth County Board of Supervisors approved a moratorium on new wind projects that lasts through next month. Since the moratorium was approved, the county has been developing new regulations that would restrict wind projects. Invenergy’s lawsuit claims that the county’s moratorium and proposed regulations are “onerous and extreme” when compared to the existing regulations and that they would put “numerous unreasonable new restrictions” on wind projects including height, setback, and noise limits.
According to its lawsuit, Invenergy has some 30,000 acres of land under contract for its Worthwhile wind project in Worth County. The suit wants the court to declare that the moratorium and “any subsequently enacted regulations” by the county will not apply to the wind project the company wants to inflict on the county. A spokesperson for Invenergy, Beth Conley, refused to answer questions about the litigation, how much money Invenergy has spent in Iowa, or the noise standards that the company favors. In an email, Conley said, “We do not comment on pending actions.”
The lawsuit is yet another example of the scorched-earth tactics being used by big renewable companies. A few years ago, NextEra, the world’s biggest renewable energy producer, sued the town of Hinton, Oklahoma – in both state and federal court — after the town of 3,200 passed an ordinance that labeled wind turbines a nuisance and restricted their construction. NextEra even sued a Canadian woman, Esther Wrightman, for calling the company “NextError” on the Internet.
Before going further, I must point out the obvious: if the oil and gas industry was engaged in this kind of litigation, it would be covered by all of the big media outlets in the United States, including the New York TimesNYT -0.8% and National Public Radio. But because these tactics are being used by a politically popular industry, the story gets ignored.
As I reported in these pages in March, MidAmerican Energy, a subsidiary of Berkshire HathawayBRK.B 0.0%BRK.B 0.0%, sued Madison County, Iowa in early 2021, a few weeks after the county’s board of supervisors passed an ordinance aimed at halting wind projects. After several months of negotiations between the county and the company, one of the supervisors, Diane Fitch, who was elected to the board of supervisors on an anti-wind platform, changed her position and decided to settle the litigation. In an email, a MidAmerican spokesman, Geoff Greenwood, said the company was not trying to intimidate the county, instead, it was only protecting ” its legal rights for projects in the county.” As part of the settlement, the company agreed to dismiss its lawsuit. In exchange, the county agreed that the company could build another 30 turbines in the county.
Invenergy, MidAmerican, and NextEra have been using litigation as part of their effort to capture tens of millions of dollars in federal tax credits. If they don’t build wind turbines, they don’t get the production tax credit (PTC). The PTC expired at the beginning of this year. But Invenergy and MidAmerican are both claiming that they started work on their wind projects in Worth and Madison counties several years ago, before the tax credit expired, and thus they will still qualify to collect the PTC.
In March, I estimated that if MidAmerican Energy goes forward with building 30 more wind turbines in Madison County, it will collect about $81 million in PTC. According to Berkshire Hathaway’s latest 10-k filing, Berkshire Hathaway Energy (BHE) has collected about $2.7 billion in tax credits over the past three years. A note to the financial statement says that the $2.7 billion “includes significant production tax credits from wind-powered electricity generation.” In 2021, BHE’s pre-tax earnings totaled $3.18 billion. But thanks to $1.17 billion in tax credits, the company’s after tax-profit totaled $4.35 billion, an increase of about 37% over what it would have been without the PTC.
Back to Invenergy, which is facing staunch opposition to its projects in multiple states. Last month in Ohio, all three commissioners in Clinton County went on the record opposing a 300-megawatt solar project that Invenergy wants to build in the southern part of the county. County Commissioner Kerry R. Steed said, “I am on the record as being 100 percent opposed to these types of industrial-scale solar projects. I find it unacceptable that this industrial-scale solar project takes thousands of acres of the most productive farmland in the state out of use.”
Invenergy, which is controlled by Michael Polsky, (estimated net worth: $1.5 billion) is also facing fierce opposition in Wisconsin. A few weeks ago, the town of Christiana filed a lawsuit asking the courts to reverse a state regulator’s approval of Invenergy’s proposed Koshkonong Solar Energy Center. According to an article published by Wisconsin State Journal, the town is claiming state regulators “wrongly approved a project that violates the state Constitution, lacked an adequate environmental review, and was presented under false pretenses, among other deficiencies.”
Last year, in Iowa, the Grundy County Board of Supervisors voted 4-1 for a moratorium on wind farm construction after Invenergy proposed to build a wind project in the northeast part of the county. Further, as reported in 2020 by Forbes, Invenergy’s business practices “have drawn scrutiny. Last year, New York’s attorney general fined it $25,000 for undisclosed conflicts of interest—Invenergy had pushed through favorable new wind laws in the towns of Freedom and Farmersville without disclosing that it had signed land leases with certain town employees and officials.”
A few weeks ago on the Power Hungry Podcast, I spoke to Julie Kuntz, a resident of Grafton, and “a fifth-generation Iowa farm girl.” Kuntz, who has become one of the state’s highest-profile activists against the encroachment of Big Wind and Big Solar, told me that Invenergy has been using “nefarious tactics” to try to convince landowners to sign leases. (The video of that interview is also available on YouTube.) Kuntz said she had received emails from one of Invenergy’s lawyers that she felt were aimed at intimidating her. “That’s kind of the way that this company works…is by intimidation.” She continued, saying “people need to get informed. An informed citizen is the wind or the solar people’s…worst nightmare.”
Kuntz also told me that several months ago, she called Invenergy’s main number and left voice mail messages for Polsky. “I invited him to come out to our century farm. And I said, ‘I’ll make you supper. We’ll have Iowa sweet corn. You know, I would like to visit with you. I would like to show you this beautiful rural area [and] tell you…our concerns.’” She then pointed out that Invenergy’s lawsuit is claiming it has “vested rights” in building wind turbines in Worth County. She went on saying that she wanted to tell Polsky “about our vested rights, about…our family farms, what we’ve got in the value of our residents, and how we value the quality of life. I didn’t get a response from him.”
Back in 2014, Warren Buffett, the chairman and CEO of Berkshire HathawayBRK.B 0.0%famously said the “only reason” to build wind projects is to collect the PTC. “They don’t make sense without the tax credit.” Charlie Munger, the vice-chairman of Berkshire Hathaway, has also coined another famous line: “show me the incentives, and I’ll show you the outcome.” In another version, which is available on YouTube, Munger says “You get what you reward for. So if you have a dumb incentive system, you get dumb outcomes.”
The PTC is a dumb incentive. And because of that incentive, MidAmerican sued Madison County and Invenergy sued Worth County. Furthermore, their litigation tactics show that the pursuit of wind and solar across rural America is not about climate change. Instead, it’s about money and the no-holds-barred pursuit of tax credits. Indeed, the push for renewables across the country has become — as Darlene Park told me five years ago – an attack on rural America. And that attack is being fueled by dumb incentives.
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