Friday, December 30, 2011

Fisker's Aptly Named Car Shows the Folly of Government

For the last 6 years, Delawareans have been barraged with promises from so-called "Green companies", most of which promised lofty job numbers and economic booms.  Blue Water Wind came to town with a plan to provide wind energy that would be clean and green and could even eliminate the need for dirty coal fired plants.  Their scheme turned out to be one that would produce far less energy than expected, one that required the government to enforce a mandate on Delmarva Power which forced them to pay more, one that required the federal government to give the company a non-compete contract for the off-shore wind farm location and one that ultimately failed just days ago when the project did not receive MORE government assistance in the form of more direct subsides.  Despite receiving awards of more than $800 million (although we can't be sure how much of it was spent on the project, how much went into the pockets of government cronies or how much the government still has, if Solyndra is any example, that money is long gone) of which we know that enough was used to pay at least 6 executives making 6 figures plus their assistants for 6 years (likely around $4 million) plus the cost of lobbyists, legislators (this is not a typo), architects, lawyers and surveyors for the ramp up to production (which likely cost Delmarva ratepayers millions more), Blue Water Wind needed MORE government funding just to begin production on a surveying tower to see if their idea would ever generate a single kilowatt of power!  After Solyndra, the government realized that green energy problems (like those that plagued Spain, the nation whose green jobs plan bankrupted their nation and after whom Obama's green jobs plan is modeled) would cause more scrutiny and so they decided to cut funding to this off shore wind disaster.  Subsequently, Blue Water Wind folded because they were unable to secure private backing (despite the assurances of company leaders who promised that it would be able to function without government support) for their venture.  Their contract with Delmarva ended 2 days ago at the stroke of midnight and along with it, any chance that we'd see a dime from the investment returned.

More recently, the buzz has been about the Obama crony run car company, Fisker.  You might remember Fisker (or more likely not) as the start-up company who out muscled Tesla as the Obama Administrations favorite in the Plug-in electric car market.  It bought (on the cheap) the Boxwood Road site formerly owned by GM and has been rehabbing it in preparation to begin production on the "cheaper" of its two offerings, the Nina (the more expensive Karma is made in Finland because Fisker says that no one in America can do the job...) in 2013.  The Karma is offered for sale at Union Park's family of dealerships in Wilmington.  A friend of mine recently tried to secure a test drive of one of the Fisker Karma's at Union Park only to find each time that he came by, that the vehicle was "in the shop" for some kind of software upgrade or maintenance issue (odd for a showroom car that is never driven).  Now, this friend may or may not have the means to purchase the vehicle, I don't get into that kind of thing but if I had to guess, I would say his credit record and history would warrant at least a test drive of almost any vehicle ever built.  The Karma retails for more than $102,000 and less than 300 have yet been sold.  Now remember, the Fisker business model actually called for them to own a significant portion of the hybrid/electric car market in just the first couple of years of production.  They would have to beat to market shares of GM, Toyota (who owns the largest share with the Prius), Nissan and Honda to name a few.  Delaware's Caesar Rodney Institute highlighted the bold plan years ago:
Competition in the hybrid market is fierce. All the major automobile producers are moving into the hybrid market. By 2015 GM plans for 26 out of 33 models to be some form of hybrid. Chrysler plans to have 8 hybrid or electric vehicles by that year. The current U.S. hybrid market averages across the business cycle 25,000 cars per month (300,000 per year). Three quarters of the sales are Toyota's Prius or Lexus, with Prius accounting for 55% of the total hybrid market. Ford and Mercury (Fusion, Milan) currently have a 9% market share, with Honda at 8% and GM at 5%. Sales have dipped during the recession and are directly influenced by the price of gas.
Will the market support Fisker's 2014 sales projection? U.S. car sales should top 8 million by 2014. If the hybrids share of cars rises from its current 1% and climbs to 5%, hybrid sales in 2014 will be around 400,000. This means that Fisker, with a limited retail and service network and no established reputation, will capture 19% to 25% of the U.S. hybrid market. Should 50% of Fisker's cars be sold as exports, the highest proportion of exports for any current American company, Fisker is assuming a U.S. hybrid market share of 9% to 13%, greater than the current shares of Honda and GM.
The likelihood of such a plan working was also a subject of the Institute and it found that the plan left far more questions on the table than it answered.  Fisker has had to hike the prices of the Karma to keep the company afloat, pushed back production and start-up plans, has sought more taxpayer funding and still has only delivered a relative handful of vehicles.  It's certainly not competitive in the market with companies like Toyota, Honda and Nissan.  Which bring us now to the news of today which is also a blow to sales of the start-up car makers most expensive model.  It turns out that the battery packs inside the Fisker Karma's can catch fire (much like the Chevy Volt which was recalled earlier this year) and cause explosions.  Battery fires have plagued the electric car industry largely due to government's force behind the implementation of the unproven and untested technology to save face in its quest for green energy goals.  The bottom line is, do we want to pin our hopes to another Pinto or Yugo?  Fisker is already north of $600 million in government subsidies, some have said it's closing in on $1 billion and now with these setbacks, business will suffer.  There can be no doubt that the $50,000 Nina, which is planned to be built in Delaware will suffer from these setbacks if it comes online in 2013 as promised and many good folks, like the people at Union Park and the many contractors who embraced this green energy plan will be affected by these pains.  The fact is that electric cars aren't ready for prime time and no amount of government force will make it so.  In fact, I say, when the private market venture capitalists start investing THAT is when you will see the rise of the electric car.  

Government picks for winners and losers, Solyndra, Blue Water Wind and Fisker are proving what conservatives have been saying for a long time, that private markets should be dictating the products in the market place.  Government wastes untold billions of dollars every year that could be used to pay down or deficit on misguided attempts to solve every problem when the reality is that it just can't do it.  Government solutions rely on mandates, cash subsidies and risky gambles with other people's money that more often than not lead to disaster.  Look at the latest deal with Bloom energy.  Delmarva Power ratepayers are now venture capitalists (don't get excited, you get no return on this investment) in a company that markets unproven emergency backups to major corporations.  Better still, not only did the government have to force Delmarva Ratepayers to subsidize Bloom but it also forced subsequent governments to have to stick with the plan.  That's right, future General Assemblies MUST remain in the agreement with Bloom for 21 years.  TWENTY ONE YEARS!  No matter how much it costs, how effective it is or how many jobs it produces.  Further, they had to compromise their own leftist principles to do it!  In 2011, the General Assembly passed a bill that redefined the term "Renewable Energy" to include Natural Gas (a fossil fuel considered dirty by the left) because the Bloom boxes need natural gas to operate and because anything not classified as renewable under Delaware's Renewable Energy Portfolio costs Delmarva more money to use.  UNREAL!  We've got to stop this madness.  We need someone with an ounce of common sense to make some changes.

Tuesday, December 27, 2011

Delaware ranks 6th worst in employment since 2006

According to The Business Journals, Delaware lost anet total of more than 28,500 (21st in total jobs lost/gained) jobs from 2006 to 2011.   That’s a net downturn of 6.5% and ranks Delaware 45th (out of 51 including D.C.) in the nation.  That puts Delaware behind states like New York, New Jersey and California whose economic woes have been made quite plain and it puts them just ahead of states like Michigan, Arizona and Florida who have often been highlighted as the poster states for a recessionary America.  This is despite a “pro-business” governor in Jack Markell whose policies have clearly hurt Delaware.  Despite suggestions to the contrary, Delaware has failed under Jack Markell’s leadership, to create jobs and expand economic opportunities.  Our government has tried every trick and scheme in the book to create a green jobs focused economy and even those attempts, which cost Delaware taxpayers millions of dollars have failed.  Recently, Blue Water Wind, who won government subsidies in excess of $800 million went under and took with it untold millions in wasted taxpayer dollars.  Before that, Fisker announced that it would begin making its cars in Finland, not in Wilmington.  That’s despite more than $650 million in state and federal aid plus a sweet discount deal on the former GM plant at Boxwood Rd.  The fact is that Jack Markell and his economic team have simply failed to create any jobs since his election in 2008 because he’s continued the same failed economic policies of Ruth Ann Minner.  In fact, since Markell came to us FROM the Minner Administration, it’s pretty clear that we’ve basically reelected Minner to a 3rd term at least as far as the economic policies go.  It’s time we got serious about putting Delawareans back to work.

We’ve got to cut taxes on businesses and ease their cost of doing business, reduce regulations to encourage hiring and expansion and target incentives at companies that focus their economic attentions on Delaware.  The fact is that businesses are leaving Delaware for Florida, Arizona and other states who have made their business laws and taxes more attractive.  We MUST win them back to Delaware.  We can cut the gross receipts tax (which taxes each transaction at each level, effectively compounding the tax burden on an item 3 or 4 times before it reaches the customer) by 8%, reduce the corporate tax rate to 5% and match it with the best Chancery Court in the nation to regain our status as America’s business capital.  This will not only bring back corporate business like banks and credit cards but also blue collar manufacturing jobs which are SORELY needed in places like Wilmington where the real unemployment rate is nearing 20%.  We need to repeal the RGGI and RPS to reduce the electric premium on blue collar job creators.  The fact is that Delaware already far exceeds the RGGI standards and the regional cap and trade scheme only succeeds in stealing tens of millions of dollars from Delaware rate payers.  Meanwhile, renewable portfolio standards only drive up the cost of energy for both individuals and businesses by demanding that they pay more for their electricity than they need to for less efficient and less reliable energy.  Next, we must opt Delaware out of Obamacare by asserting our 10th Amendment rights and joining the 28 states who are suing over the nationalized healthcare bill’s overreach of authority.  Exempting Delaware businesses and residents from the enormous costs of Obamacare and opening up the state to more competition in the insurance market will create tens of thousands of jobs and get Delaware back on the road to economic recovery.  Finally, it’s time we started investing in businesses that invest in Delaware.  We’ve got to target subsidies at companies that rebuild existing structures, hire Delawareans and invest in the communities where they do business.  No more open ended blank checks for blanket job creation that employ as many (if not more) out of state workers as they do in-state workers.

If we do these things, we can grow Delaware out of the recession and become a leader in the American emergence.  If we fail to do these things, Delaware is doomed to be at the bottom of the pack and stuck in a long term recession.  I think Delaware can lead.  I think Delaware can be a job creator, an innovator and a  leader but we’ve got to act right away. 

Tuesday, December 13, 2011

Christine O'Donnell Comes Full Circle

Full disclosure on a couple of things here:
  1. I did in fact endorse and work for Christine O'Donnell in 2010.  I thought she was the best available candidate for the job and she stood for the alternative to the establishment good old boys network that has sold our country down the river.
  2. I will support the eventual Republican nominee in the General Election because any of the available GOP candidates are far better than President Obama and will undo many of his most dangerous and harmful policies.
With those things said, let me say that this move by O'Donnell is not a surprise.  Months ago she all but endorsed Romney with campaign donations and made it quite clear that Romney was her guy.  Many of us told her that this was a bad move.  Christine rallied the grassroots, the anti-establishment, the rank and file conservatives who believe that the system is corrupted by the establishment elites who have much of the money.  It was her willingness to challenge the establishment and their figurehead, Mike Castle, that drove many new voters to the polls with hope for a change in the system.  I must admit, I'm disappointed in this move to endorse Romney.  I watched her interview with Sean Hannity where she made a lukewarm case for how the "TEA Party" has a misplaced dislike of Uncle Mitt (yes, he really is a distant uncle of mine).  She claimed (as did Ann Coulter before might remember Ann Coulter as the one who said in February of 2011 that if Mitt Romney were the nominee, the GOP would lose) that Romney was clearly the most conservative candidate.  So let's take a look at Romney's conservatism:

Romney Care...

Pro-Choice in Mass...but Pro-Life in Iowa?

The Romney RINO scorecard...
“He can argue any side of a question. And sometimes you think he’s really believing his argument, but he’s not.”Ann Romney, the wife of Mitt Romney 

Ronald Reagan said:
“We don’t intend to turn the Republican Party over to the traitors in the battle just ended. We will have no more of those candidates who are pledged to the same goals as our opposition and who seek our support. Turning the Party over to the so-called moderates wouldn’t make any sense at all.”
“A political party cannot be all things to all people. It must represent certain fundamental beliefs which must not be compromised to political expediency or simply to swell its numbers. “Let our banner proclaim… and if there are those who cannot subscribe to these [conservative] principles, then let them go their own way.”
Don’t give up your ideals, don’t compromise, don’t turn to expediency — and don’t, for heaven’s sake, having seen the inner workings of the watch — don’t get cynical.”
Ms. O'Donnell (and Ms. Coulter for that matter), I would submit to you that calling Romney "the most conservative candidate" and lecturing the TEA Party groups who have bought your books, supported your campaigns and listened to your viewpoints, is...well poor form (I'm sure you can come up with your own analogy here).  Do not insult our intelligence by trying to claim conservative credentials that don't exist.  And further more, Ms. O'Donnell, as someone who shed more blood, sweat and tears for you in 2010 than almost anyone else, how DARE you trade on the influence and political star power that your supporters bought you with their diligence and hard work?  How DARE you insult our intelligence by pretending like we haven't looked at the mans record.  We looked at yours and we looked at Mike Castle's record.  WE displayed them both prominently and WE overlooked the silly things you said as a young woman because they were silly.  We highlighted the offenses Castle committed because they were offensive.  This endorsement is of course your own business but where you upset us was when you lectured the TEA Party groups who have pushed back at this announcement (which let's face it, was as transparent as glass long ago).

I submit that this move will only serve to portray you in the following light:
That you have now sold out to the same establishment forces (Mitt Romney, Karl Rove) who you spent all of 2010 fighting against when you defeated Mike Castle.  It took 1 year for you to go from the People's champion (despite losing the General Election) to the Establishment whipping post.

At this point, I'm not knocking you for your endorsement (again, if Uncle Mitt is the nominee, and he likely will be, I would support him against Obama) but for your lecturing of the very folks who made your run the sensation that it was...the TEA Party.   Shame...shame...shame.


The News Journal has a new piece out today about NRG Energy's plans to drop the Bluewater wind power-purchase contract with Delmarva Power at the end of the year.  It turns out that the project simply cannot move forward without massive help from the Federal government (not a surprise to many of us who have been upset about this contract from the beginning).  As the news Journal reports:
The contract is widely seen as Bluewater's most valuable asset, and observers said it would be difficult to build the project without one.

NRG has struggled to secure financing for the massive project and failed to secure federal loan guarantee
Since the first plans hit the table, critics have questioned whether or not the massive wind farm off the Delaware coast would ever even get off the ground, much less live up to its lofty expectations.  Back in 2010, Resolute Determination contributor Steve Larrimore highlighted the bits of truth that began to trickle out that the Bluewater Wind project wasn't all it was cracked up to be.
“Deepwater consultant David Nickerson further explained that the Delaware price was arrived at partly through some regulatory sleight of hand. The lower price, he said, was reached by offsetting costs with potential revenue coming from renewable energy credits that accompany renewable projects. The value attached to those credits was allowed to be inflated in Delaware, Nickerson suggested, providing the illusion of “an extra revenue stream,” which artificially brought down the apparent cost of the project.” (I did the highlighting)
Whoops, guess he didn't think back in 2010, that we Delaware folk would get information from a Rhode Island newspaper...and he's supposed to be the genius behind a new energy source?  The predictions didn't start or end there, the Caesar Rodney Institute has been hard on Bluewater Wind from day one and have been a leader in pointing out the flaws in their model.  Back in Feb. of this year on the CRI blog, the Bluewater Wind model was highlighted by David Stevenson.  Even then there were questions about whether the massive subsidies needed to sustain the new "green energy technology" would even get approved by the federal government.  In fact, it might surprise rate payers to know that Delmarva Power was forced to sign an agreement to pay premium prices for energy (That would cost consumers between $90 and $220 million per year) that wouldn't even get started until 2016 (and now probably never).  What will really infuriate people is that NRG Bluewater Wind cost the taxpayers $800 million and will produce absolutely no power for that price.

But this isn't just about a bad business model of failed green energy plans, it's about cronyism of the highest order.  There is no market for green energy with prices that are more than 8 times as much as conventional sources.  Not only were Delaware General Assembly members like Senator Anthony DeLuca and Representative John Kowalko in the tank for this debacle in waiting, but even Congressman John Carney (Then Lt. Governor) was caught up in what will now become a scandalous account of government cronyism.
Carney, amid his 2008 campaign for governor, said in a release then that the offshore wind developer pledged to him to “make Delaware its regional hub for offshore wind development and maintenance.”
How's that hub working out for us now Congressman?  I mean politicians will say just about ANYTHING to win a race.  Experts cited in the News Journal piece today admit that without government forcing power companies to buy power at much higher rates from offshore wind, there's no way that the ocean based windmills could work!
Offshore wind power is among the more expensive forms of renewable energy.

"If your project doesn't have a PPA, a lot of the value is gone. And I'm sure they know that," Grace said of the power purchase agreement.
So there we have it folks, Delmarva, the PSC, the General Assembly, the Markell/Minner Administrations and Bluewater Wind all knew that the value of the energy source was gone if Delmarva didn't pay more (and charge you more).  Wrapping up the column, Aaron Nathans points out that Bluewater Wind is all but gone and so is our $800 million:
The six employees of Bluewater, including Mandelstam, would see their positions eliminated in January unless a buyer comes forward, Mandelstam said. NRG would retain the Bluewater brand.
NRG plans to suspend its offshore wind operations in New Jersey as well, Gaier said.
Despite the move, Mandelstam spoke highly of NRG on Monday, praising its commitment to solar energy.

It's likely that Congress will extend the wind tax credits, but "you can't take that to the bank," which Mandelstam said gave NRG pause.

The market for offshore wind has matured in Europe, but in the United States, "it's just one of those situations where policy really does affect the way business people allocate their money," Mandelstam said.
So folks, I have to ask you, given what has happened here with Bluewater Wind's collapse and the revelations that Fisker is finding it too costly and difficult to build their electric cars here in America, Do you trust them with Bloom? Further, do think that these folks really deserve to continue to represent you?  Finally, do you think that the PSC, which is "supposed" to be doing things "in your best interest" really ought to be making decisions in the background?  Why don't you call them?

Thursday, December 8, 2011

Senator DeLuca has a FIOIA problem

Senator Anthony DeLuca seems to have a problem with FOIA requests. Namely, he doesn’t feel like they apply to him. The embattled Senator has escaped prosecution under the HATCH Act for his roles as both an administrator in the Office of Labor Law Enforcement and as State Senator and been challenged for his leadership position by his own party for his ethics and transparency problems. Earlier this year, Senator DeLuca refused to give an account of the time he spent working each of these taxpayer funded jobs. Despite pressure from the News Journal and other journalists, to turn over his timecard records and show that there was no overlap between his work in the executive branch and his work in the legislative branch, DeLuca carried on holding back his timecards for more than six months. When he finally did release them, the records indicated no conflict (of course) but the fact that he allowed the Attorney General’s office to make the case that the release of his time records were a matter of national security is evidence that he simply doesn’t respect the offices he holds. As an elected official who holds a job in both the legislative branch and the executive branch, it’s his duty to disclose to the public when he discharges his duties in each arena. Today, the News Journal is reporting that Senator DeLuca’s office is once again in violation of FOIA compliance and this time he’s not being protected by the Attorney General’s office. His office has once again refused to show the taxpayers of Delaware the records of his department’s work investigating the labor practices of Delaware businesses. For some reason, Senator DeLuca believes that he lives above the law. Maybe it’s the fact that in the 12 years that he has been in office, he has never faced an opponent, maybe it’s that he’s survived leadership challenges in the State Senate or maybe it’s just a complex that he has now that he’s spent more than a decade in the legislature but whatever the case, it’s about time we went ahead and shattered this worldview that he doesn’t need to be accountable to the people who elected him or to the people who entrust him with the ability to govern them.

Delaware voters,
Though you and I may not agree on everything, I think we can all agree on one thing, it’s time for Senator DeLuca to be replaced. He doesn’t feel like the rules apply to him. Whether it’s spending money for extra security doors for his office (as if that REALLY had something to do with his “safety”), failing to comply with the initial FOIA request for his timecards and ACTUALLY ALLOWING the AG to make a ridiculous claim that it would be a national security risk for us to know if there was any overlap in his work with the executive and legislative branches or this latest refusal to comply with FOIA and ethics laws, it’s clear that Senator DeLuca just doesn’t get it. We need a cleaner government with people who value the rules of the system and who genuinely WANT the people to see what goes on in Dover. I’m that person. I will do everything in the open and with complete transparency. I’ll tear the security door down myself, comply with FOIA requests BEFORE the deadlines and make sure that you all know what I’m doing before you even HAVE to ask. Also, I can promise you this, should I be fortunate enough to win, I would only seek two terms. That’s it, just two terms. No dynasty here, won’t have enough time to earn a pension, won’t need lifetime medical benefits or any of the other legislative retiree perks. Save that and give it to the folks who need it. I just want to go to Dover and shed some light and spread some truth. I’m even willing to put this pledge in writing. We have absolutely GOT to change the way business is done in Dover if we’re EVER going to achieve our shared goals of prosperity, transparency and openness.

Evan Queitsch
Candidate 11th Senate District -