Monday, June 30, 2008

The fraud and monopoly of Iberdrola s Pennsylvania operations

Dear PSC Chairman Brown and Ms. Jodi Fansler:

Please immediately step up and permanently rescind NYSERDA's ruling that 635 MW wind generation facilities located in Pennsylvania are eligible to be paid NY State residential utility ratepayers’ monies (from all of NY State’s residential ratepayers).

There are three other significant reasons why New York State must remove NY State's taxpayers money and residential ratepayers' monies from Pennsylvania: (1) those wind farms are unscrupulously claiming far more megawatts than they can actually produce to rake in those monies; (2) those wind farms are raking in those monies years before any actual electricity is ever produced; and (3) NY State has no authority to oversee business pursuits in Pennsylvania.

Iberdrola SA (under wholly-owned affiliate names such as PPM Energy, Community Energy Inc, and Gamesa) owns and operates numerous wind generation facilities located in Pennsylvania.

Iberdrola's (Community Energy Inc's) Bear Creek project was "...largely made possible by commitments from PPL Corporation and leading wind energy customers such as the University of Pennsylvania and PECO Energy Services, says Paul Copleman, CEI's sales and marketing operations manager." PECO is Philadelphia Electric Company. PPL is Pennsylvania Power and Light. After filling its contracts and orders in Pennsylvania, New Jersey, and elsewhere, the Bear Creek Wind Project, which has an effective output capacity of 2.4 MW (10% of its 24 MW nameplate bogus capacity) has no REAL ELECTRICITY left for NY State use. So for what in tarnations is NYSERDA doling out NY State's taxpayers money and residential ratepayers' monies to Pennsylvania?

As for the Casselman Wind Power Project (PA) and the Waymart Wind Power Project (PA), Iberdrola (etc.) markets its electricity to First Energy Corporation which sells that electricity to a very large clientele throughout Ohio, Pennsylvania, and New Jersey.

So for what in tarnations is NYSERDA doling out NY State's taxpayers money and residential ratepayers' monies to Pennsylvania?

GAMESA -- its takeover by Iberdrola SA:

On the same date of 16 June 2008 that NY PSC Administrative Judge Rafael A. Epstein announced his decision recommending that the NY State PSC not approve Iberdrola’s takeover of Energy East, Iberdrola (at its headquarters in Spain) was already announcing its next monopolization conquest – it’s 70% ownership takeover of Gamesa.

At the Bear Creek Wind Power Project operational since 2006 in Pennsylvania, Iberdrola SA-owned Gamesa ‘s wind turbines are used to generate the wind power electricity. Gamesa and Iberdrola SA are both Spanish companies.

Gamesa wind turbines -- Gamesa’s wind turbine division is 76% owned by Iberdrola SA as of 16 June 2008.

As announced on 16 June 2008. Iberdrola SA and Gamesa have agreed to a turbine building partnership deal in joint company in which Iberdrola SA has bought a 76% controlling ownership.

Stated another way, Gamesa’s four wind turbine factories located in Pennsylvania (PA being adjacent to NY State) and Gamesa’s wind turbine division office in Pennsylvania, are all now 76% owned by Iberdrola SA.

Iberdrola's fraud at the BEAR CREEK WIND PROJECT (PA) funded by NY State:

Nameplate capacity maximum electrical output placed on wind turbines by wind turbine manufacturers is a useless predictor of actual electrical output.

Actual output is about 90% less than turbine nameplate capacity.

Iberdrola SA knows this. So do other wind companies.

The Iberdrola SA (Community Energy Inc) owned Bear Creek Wind Project (in Pennsylvania) has 12 Gamesa 2.0 MW nameplate capacity turbines for a total of 24 MW.

Iberdrola SA (Community Energy Inc) deceptively and fraudulently issues Renewable Energy Certificates (RECs) for the Bear Creek Wind Project based on that unrealistically very high 24 MW output. That fraudulent practice results in a massive cash fleecing of New York State taxpayers' money and of Commonwealth of Pennsylvania taxpayers' money.

NYISO states that wind turbines will likely produce only 23.5 percent of those megawatts at any given time, that according to the 13th paragraph of Schenectady Gazette news reporter Jason Subek’s 01 June 2008 article “Companies poised to profit from state wind-power push”. Using NYISO's calculation percentage, the Bear Creek Wind Project is a 5.64 MW wind farm, not a 24 MW wind farm as Iberdrola SA (Community Energy Inc) have misled us to believe in order to fleece taxpayers.

Wind power company FPL's community outreach manager Mary Wells, the community outreach manager at FPL's Lancaster, PA office [FPL operates a wind power generation facility in Pennsylvania], was on 02 April 2007 quoted as saying that: “…a 30 percent capacity factor… is standard for a Pennsylvania wind farm.”

Using FPL's calculation percentage (which is likely too high), the Bear Creek Wind Project is a 7.2 MW wind farm, not a 24 MW wind farm as Iberdrola SA (Community Energy Inc) have misled us to believe in order to fleece taxpayers.

General Electric [aka GE Energy], the turbine manufacturer, in a report to the New York State Energy Research and Development Authority (NYSERDA) on 04 March 2005, stated: “Capacity factors of inland sites in New York are on the order of 30% of their rated [nameplate] capacity. Their effective capacities, however, are about 10% [of rated capacity], due to both the seasonal and daily patterns of the wind generation being largely ‘out of phase’ with the NYISO [New York Independent System Operator] load patterns.”

Using GE's 10% effective capacity calculation percentage, the Bear Creek Wind Project is a 2.4 MW wind farm, not a 24 MW wind farm as Iberdrola SA (Community Energy Inc) have misled us to believe in order to fleece taxpayers.

Iberdrola SA submitted its own brief to the NY State Public Service Commission judge [Rafael Epstein], In that brief, Iberdrola SA said it couldn't exercise vertical market power with wind generation because wind power is an "intermittent and unpredictable" power source. That means it's difficult to sell wind power into NYISO's "day-ahead" market, the company said. As a result, energy from these wind projects cannot reasonably be sold in NYISO's day-ahead market, in which the substantial majority of New York electricity is bought and sold," Iberdrola's brief states.”

Intermittent and unpredictable wind, coupled with many lulls in grid demand, make the 10% effective capacity calculation percentage viable for the Bear Creek Wind Project.

Iberdrola SA's fraud remains. Iberdrola SA is using nameplate capacity to issue far more RECs than Iberdrola's capacity to produce.

And what makes this fraud even worse is that Iberdrola SA (Community Energy Inc) is issuing RECs for contracts which don't receive any wind electricity whatsoever for the first few years. Cash was flowing from RECs, absent any generated product.

In July 2003 the Bear Creek Wind Farm in Pennsylvania was being planned by Community Energy Inc (CEI) for future construction and for future operation.

In July 2003, Community Energy Inc (CEI) was already selling long-term contracts for the wind electricity to be someday generated at the Bear Creek Wind Project (PA).

No electricity would be produced at the Bear Creek Wind Project (PA) for another 31 months.

Nevertheless, Community Energy Inc (CEI) was in July 2003 already making contracts and issuing transferable Renewable Energy Certificates (RECs) to CEI's customers to enable those customers to purchase CEI contracts for Bear Creek Wind Project (PA) wind electricity.

The very same 23 July 2003 media announcement by Community Energy Inc's (CEI’s) and Pepco Energy Services that stated that all of that contract wind electricity will be Community Energy Inc (CEI) produced/marketed electricity and that 90% of that electricity is from CEI’s Bear Creek Wind Farm, then contradictorily and deceptively states that only 12 MW of the 24 MW [only 50%] of that contract wind electricity is NewWind Energy® purchased from Community Energy Inc (CEI).

Iberdrola SA (Community Energy Inc) is using this deceptive and market monopolizing marketing tactic throughout New York State, Pennsylvania, and New Jersey, etc. by marketing about 50% of its product under the Iberdrola (CEI) name/brand; and by marketing (either directly or indirectly) the other almost 50% of its same Iberdrola product anonymously under other names. ESCOs and utility companies throughout New York State and Pennsylvania and New Jersey are carrying: (1) what have been named to look like competitor brands (but which in truth are Iberdrola CEI marketed products) and (2) Iberdrola CEI brands, deceiving the citizenry that there are competing products in the statewide marketplace when, in truth, its virtually all a Community Energy Inc (CEI) product.

There are three elements of fraud to the foregoing scheme.
1. The State of New York and the Commonwealth of Pennsylvania are likely paying cash for a double-issuance of each REC, enabling double-dipping fraud.
2. The transferability of the RECs (a wind industry designed very confusing shell game) allows for massive defrauding of that unscrupulous system.
3. The State of New York and the Commonwealth of Pennsylvania are paying out money for each 1 MW (equaling 1 REC) of generated electricity, without any actual generation of that 1 MW of electricity occurring.

Bear Creek Wind Farm, PA is supplying its electricity into Pennsylvania and into New Jersey by having Iberdrola's own Community Energy Inc market it to: PPL Energy Plus.

PEPCO Energy Services.

PEPCO specializes in developing innovative, cost-effective energy solutions for commercial, government, education, health care, and industrial customers throughout the mid-Atlantic region.”

In other words, this is simply just another energy company participating in the wind industry corrupt scheme to offer significant electricity price discounts to Governments (NJ; U.S., NY; etc.) and large private companies, by creating long-term large quantity bulk contracts to drive down the wind electricity price for those large purchasers, and by transferring tradable renewable energy credit (REC) certificates to those large purchasers so those purchasers can cash in those RECs to obtain large amounts of taxpayers’ monies; then paying those large amounts of taxpayers’ monies in this particular case to energy company PEPCO Energy Services which takes its cut and sends all the remaining money to Community Energy Inc (CEI) – often many months/years before any wind-generated electricity is actually generated and delivered.

The University of Pennsylvania.

One hundred eighty (180) State Government Agencies of New Jersey (NJ is adjacent to NY State) such as Rutgers [State University of New Jersey], New Jersey Highway Administration, New Jersey Transit, and the New Jersey Turnpike Authority.

The mid-2003 made 33-month wind electricity contract with the 180 State Government Agencies of New Jersey was made between the State of New Jersey Government and that Government’s supplier Pepco Energy Services.

However, Community Energy, Inc (CEI) is the generator and power marketer of all the wind electricity that PEPCO Energy Services received and sold under that 33-month contract with the State of New Jersey Government.

Ninety percent (90%) of the wind electricity for that 33-month contract was stipulated as coming from Community Energy Inc's (CEI’s) Bear Creek Wind Farm near Wilkes-Barre, PA, within 60 miles of New Jersey. The other 10% of the wind electricity for that contract came from another CEI-owned wind farm in Pennsylvania.

Corruptly, for 28 months of that 33-month July 2003-made contract, the Bear Creek Wind Farm was not completed nor operational nor generating any electricity.

Preposterously, the very same 23 July 2003 media announcement by Community Energy Inc's (CEI’s) and Pepco Energy Services that stated 100% of that contract wind electricity will be Community Energy Inc (CEI) produced/marketed electricity of which 90% of that electricity is from CEI’s Bear Creek Wind Farm, then contradictorily and deceptively states that only 12 MW of the 24 MW [only 50%] of that contract wind electricity is NewWind Energy® purchased from Community Energy Inc CEI). (see link)

In other words, in order to defraud the public into falsely believing that there are other brands of wind electricity competing with the Community Energy Inc (CEI) product, Community Energy is marketing half of their same product under their own brand name and half under a name not associated with Community Energy Inc.

Sincerely,
Daniel M. Wing, Jr.
(ph: 585-224-6758)
139 Thistledown Dr.
Rochester, NY 14617-3020

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