A NH Solyndra? Wind farm gets fed loan
New Hampshire's largest wind farm, the Granite Reliable Power project under construction in Coos County, is jointly owned by BAIF Granite Holdings, LLC and Freshnet Wind Energy, LLC. BAIF owns 75 percent of Granite Reliable. BAIF Granite Holdings was created earlier this year by Brookfield Renewable Power, which is a subsidiary of Brookfield Asset Management of New York.
That company, which runs clean energy operations around the world, has deep pockets. It reported net income of $454 million in 2009 and $3.2 billion in 2010. Brookfield Renewable Power financed the creation of BAIF Granite Holdings from its Brookfield Americas Infrastructure fund, which was reported in February to have $2.7 billion in assets. With that kind of backing, it is curious that the U.S. Department of Energy announced it would guarantee up to 80 percent of a $168.9 million loan for the Granite Reliable wind farm project last week.
Why would a company created by a $3.2 billion company and backed by a $2.7 billion private fund need federal loan guarantees? That would be an important question at any time, but it is more pertinent after the bankruptcy of Solyndra, a solar-panel maker that got a $535 million federal loan guarantee from the Obama administration last year.
Granite Reliable's wind farm is not proven, and Granite Reliable is a limited liability company, which provides broad investor protection if the company goes down. If the wind farm flops, and investors cut their losses, the taxpayers stand to lose $135 million. What is the justification for risking $135 million in public money, especially on a company with access to so much private cash? Apparently, the justification is that Obama likes 'green power' and wants to associate himself with it.
With the country running deficits as far as the eye can see, the Obama administration opts to spend money we don't have to subsidize a risky venture undertaken by the subsidiary of a huge, profitable company. If that doesn't perfectly illustrate what is wrong with crony capitalism in general and the Obama administration's practice of it in particular, we don't know what would.