Detail, east Portland photo, courtesy Miles Hochstein / Portland Ground.



For old times' sake
The bojack bumper sticker -- only $1.50!

To order, click here.







Excellent tunes -- free! And on your browser right now. Just click on Radio Bojack!






E-mail us here.

About

This page contains a single entry from the blog posted on July 12, 2007 6:28 AM. The previous post in this blog was Hey hey hey. The next post in this blog is And now for something completely different. Many more can be found on the main index page or by looking through the archives.

Archives

Links

Law and Taxation
How Appealing
TaxProf Blog
Mauled Again
Tax Appellate Blog
A Taxing Matter
TaxVox
Tax.com
Josh Marquis
Native America, Discovered and Conquered
The Yin Blog
Ernie the Attorney
Conglomerate
Above the Law
The Volokh Conspiracy
Going Concern
Bag and Baggage
Wealth Strategies Journal
Jim Hamilton's World of Securities Regulation
myCorporateResource.com
World of Work
The Faculty Lounge
Lowering the Bar
OrCon Law

Hap'nin' Guys
Tony Pierce
Parkway Rest Stop
Utterly Boring.com
Along the Gradyent
Dwight Jaynes
Bob Borden
Dingleberry Gazette
The Red Electric
Iced Borscht
Jeremy Blachman
Dean's Rhetorical Flourish
Straight White Guy
HinesSight
Onfocus
Jalpuna
Beerdrinker.org
As Time Goes By
Dave Wagner
Jeff Selis
Alas, a Blog
Scott Hendison
Sansego
The View Through the Windshield
Appliance Blog
The Bleat

Hap'nin' Gals
My Whim is Law
Lelo in Nopo
Attorney at Large
Linda Kruschke
The Non-Consumer Advocate
10 Steps to Finding Your Happy Place
A Pig of Success
Attorney at Large
Margaret and Helen
Kimberlee Jaynes
Cornelia Seigneur
Mireio
And Sew It Goes
Mile 73
Rainy Day Thoughts
That Black Girl
Posie Gets Cozy
{AE}
Cat Eyes
Rhi in Pink
Althouse
GirlHacker
Ragwaters, Bitters, and Blue Ruin
Frytopia
Rose City Journal
Type Like the Wind

Portland and Oregon
Isaac Laquedem
StumptownBlogger
Rantings of a [Censored] Bus Driver
Jeff Mapes
Vintage Portland
The Portlander
South Waterfront
Amanda Fritz
O City Hall Reporters
Guilty Carnivore
Old Town by Larry Norton
The Alaunt
Bend Blogs
Lost Oregon
Cafe Unknown
Tin Zeroes
David's Oregon Picayune
Mark Nelsen's Weather Blog
Travel Oregon Blog
Portland Daily Photo
Portland Building Ads
Portland Food and Drink.com
Dave Knows Portland
Idaho's Portugal
Alameda Old House History
MLK in Motion
LoveSalem

Retired from Blogging
Various Observations...
The Daily E-Mail
Saving James
Portland Freelancer
Furious Nads (b!X)
Izzle Pfaff
The Grich
Kevin Allman
AboutItAll - Oregon
Lost in the Details
Worldwide Pablo
Tales from the Stump
Whitman Boys
Misterblue
Two Pennies
This Stony Planet
1221 SW 4th
Twisty
I am a Fish
Here Today
What If...?
Superinky Fixations
Pinktalk
Mellow-Drama
The Rural Bus Route
Another Blogger
Mikeyman's Computer Treehouse
Rosenblog
Portland Housing Blog

Wonderfully Wacky
Dave Barry
Borowitz Report
Blort
Stuff White People Like
Worst of the Web

Valuable Time-Wasters
My Gallery of Jacks
Litterbox, On the Prowl
Litterbox, Bag of Bones
Litterbox, Scratch
Maukie
Ride That Donkey
Singin' Horses
Rally Monkey
Simon Swears
Strong Bad's E-mail

Oregon News
KGW-TV
The Oregonian
Portland Tribune
KOIN
Willamette Week
KATU
The Sentinel
Southeast Examiner
Northwest Examiner
Sellwood Bee
Mid-County Memo
Vancouver Voice
Eugene Register-Guard
OPB
Topix.net - Portland
Salem Statesman-Journal
Oregon Capitol News
Portland Business Journal
Daily Journal of Commerce
Oregon Business
KPTV
Portland Info Net
McMinnville News Register
Lake Oswego Review
The Daily Astorian
Bend Bulletin
Corvallis Gazette-Times
Roseburg News-Review
Medford Mail-Tribune
Ashland Daily Tidings
Newport News-Times
Albany Democrat-Herald
The Eugene Weekly
Portland IndyMedia
The Columbian

Music-Related
The Beatles
Bruce Springsteen
Seal
Sting
Joni Mitchell
Ella Fitzgerald
Steve Earle
Joe Ely
Stevie Wonder
Lou Rawls

E-mail, Feeds, 'n' Stuff

Thursday, July 12, 2007

About those solar panels on county buildings...

We blogged a while back about Multnomah County's plan to put solar panels on a bunch of its buildings. The announcement, by Commissioner Jeff Cogen, explained that the units would be owned by a group of private investors, who would sell the power they generated to the county for 10 years. The investors would get to take a bunch of tax credits for solar power devices on their tax returns. At the end of the 10 years, the county would take over the units, and keep all the power that they produced for itself.

Aside from the greater societal benefits of solar energy in general, there are potentially two advantageous aspects of this plan for county taxpayers. But I stress the word "potentially."

The first would be realized if the county could effectively prevent increases in its own power costs, at least to the extent of the output from the solar units, for the life of the panels. I asked Cogen about this on his blog:

What's the deal on electricity costs over the 10-year period? Someone said the county gets a lock on the current rates it pays for power. Is that true?
He promptly responded (and I'm grateful for his attention):
That is the what Energy Trust told us to expect. As you noted on your blog, we still have to do an RFP to find the company to own the solar panels (and to answer your concern, no we don't have anyone lined up - there will be a fair, open, competetive process). But the Energy Trust has done these sorts of projects before, and has experience regarding what terms we can expect, and based on their experience we are predicting stable electric rates for the 10 year term. It makes sense when you think about it: unlike gas or coal generated electricity, there are no fuel costs, which vary quite a lot. All of the costs are fixed, upfront costs associated with the purchase and installation of the panels, so the costs are predictable and stable.
A bit vague -- we're talking about a financial deal with parties that haven't been identified yet, and the benefit is a mere "expectation" rather than a promise -- but if it were to come true, great.

The second good part of the deal for taxpayers, it was said when the public announcement was made, would come at the end of the 10-year period, when the county got its hands on the units and got to keep all the power they produced. I had a couple of questions. One of them was what kind of condition the solar panels would be in after 10 Oregon winters. There was a difference of opinion among our readers about that. A few shared my skepticism that they'd be highly productive (net of repair and maintenance costs) at that point.

And it turns out that there's yet another reason to postpone scheduling a celebration: It's not clear how much the county is going to have to pay to take title to the units after the 10-year main contract period. Over on Cogen's blog, I asked him:

How much will the county pay at the end of the 10 years to take title to the units? If it's nothing, or a nominal amount, then how can the private investors be treated as the owners of the units for tax purposes?
He responded:
[W]e don't know the exact amount we would be paying at the end of the 10 year term, that is something that will be part of the RFP and subsequent negotiations. But based on other experiences, it will likely be a small amount that is factored into the payment structure all along. You are correct that it needs to be a more than merely symbolic payment, in order to be valid "consideration" for the deal and to assure that the investors can legitimately claim the tax credits. However, in other deals the amount has been relatively small, because a substantial portion of the value to the investors is in the tax credits.
It will be interesting to see where the negotiations wind up on this point. In some creative tax-oriented financings (something I actually know something about), the "end user" (here, the county) is required to pay the fair market value of the equipment, whatever it may be, at the end of the contract term. Indeed, that's often the safest way to guarantee that the "funding source" (here, the private investors) get the tax writeoffs associated with owning the equipment. If that's the deal, it's not really much of a deal at all for the county. It will have to pay whatever the appraisers say the panels are worth 10 years from now. Heck, if it wanted to pay the going price for used panels at that point, it could easily do so in the after-market, without giving anyone free access to county buildings for 10 years.

On the other hand, if the buyout price that the county has to pay is too low, the investors might not get the tax goodies. And it's completely open to negotiations what would happen in that case. If the tax credits don't materialize, will the county have to pay a lot more to the investors to make up for it? It's all part of the contract negotiations, which have not even begun in earnest.

In short, you may want to hold off on the champagne over the solar energy deal, taxpayers. This one is far from a done deal, or a good deal, just yet. As always, the devil is in the details.

Comments (7)

Agreed, the responses contain all the requisite code words and code phrases, including the perceived safety of RFPs.

We all know RFPs can be written in such a way that a limited number (and in some cases, just one) candidates actually qualify. That being said, you'll be accepting their terms re what happens at year #10, etc, vis a vi taking title to the 10 year old equipment.

Hi BoJack - please don't eat me alive. If you could reference our website - www.commissionercogen.com - where people can ask Jeff questions, I'd appreciate it. We want the discussion and the opportunity to take some issues head on, but we can't do that if we don't know that community members are chatting about it over here.

Thanks for the chat.

One thing I really like about commissioner Cogen is it's very easy to speak with him directly via both email and telephone.

I've done a fair amount of research into alternative energy sources and right now solar panels are simply not economically practical. Of course that fact doesn't stop our "leaders" who take our money by by force (taxation) from throwing money at this so they can look like green weenies.
Solar panels have improved dramatically over the years and are being used more and more but they are not economically practical for high energy applications.
How about having the people who are so "gung-ho" about this alternative energy stuff put THEIR money into it?

The proposed structure sounds very similar to the now suspect (prohibited?) sale/leaseback transactions that lead to large, taxable companies owning parts of the NYC subway system, municipal sewage treatment facilities, and similar depreciable properties. My understanding was that most of those transactions are now considered to lack economic substance and no longer work to allow the taxable company to get the tax breaks associated with the assets (guess this goes to Jack's point about who really owns the panels for tax purposes). Is this proposal different enough to pass muster?

The Oregon legislature could have rendered that private tax inquiry for Oregon tax purposes, for any subdivision of Oregon, irrelevant by substituting a state grant when the ultimate consumer of the panels is a subdivision of the state. It would have precisely the same pro-solar bias in the exercise of the state-level taxing power. It would have precisely the same alteration of the price point between solar and non-solar from the microeconomic perspective of any individual subdivision of the state.

It seems logical too to wait if Solaicx will switch from manufacture of panels to seller only of equipment to others so that these others can use the equipment to make panels, thus increasing the supply and driving down the price. I get the feeling that the Rivergate plant is a test plant to prove the process so as to subsequently sell equipment, and work out bugs in the process. This is just an educated guess, subject to rebuttal, of course.

My proposed remedy, if there must be haste to just get started for political Green reasons, is to build in a clause in any panel purchase contract to reset the price in say three years to the market price at that time. This would mitigate one of my concerns for the potential gaming of the political purchasing system and the possible unsavory timing issue of the recent round of funding for Solaicx by private equity folks that are privy to and in control of facts that the general public has no knowledge. If the panel prices are already forecast to fall significantly in the near-term then it would be something worse than folly to not address this issue in any contract, where the risk of future price changes is openly addressed and bargained . . . whereupon I could at least have an "issue" that is amenable to review for validity.

Sorry for omitting the link to Cogen's blog. (It was inadvertent.) It's here. The solar panel entry is here.


Sponsors


As a lawyer/blogger, I get
to be a member of:

In Vino Veritas

If You See Kay, Red 2011
Turnbull, Old Bull Red 2010
Cherry Tart, Cherry Pie Pinot Noir 2012
Trader Joe's Grand Reserve Cabernet, Oakville 2012
Benton Lane, Pinot Gris 2012
Campo Viejo, Rioja, Reserva 2008
Haden Fig, Pinot Noir 2012
Pendulum Red 2011
Vina Real, Plata, Crianza Rioja 2009
Edmunds St. John, Bone/Jolly, Gamay Noir Rose 2013
Bookwalter, Subplot No. 26
Ayna, Tempranillo 2011
Pete's Mountain, Pinot Noir, Haley's Block 2010
Apaltagua, Reserva Camenere 2012
Lugana, San Benedetto 2012
Argyle Brut 2007
Wildewood Pinot Gris 2012
Anciano, Tempranillo Reserva 2007
Santa Rita, Reserva Cabernet 2009
Casone, Toscana 2008
Fonseca Porto, Bin No. 27
Louis Jadot, Pouilly-Fuissé 2011
Trader Joe's, Grower's Reserve Pinot Noir 2012
Zenato, Lugana San Benedetto 2012
Vintjs, Cabernet 2010
14 Hands, Hot to Trot White 2012
Rainstorm, Oregon Pinot Gris 2012
Silver Palm, North Coast Cabernet 2011
Andrew Rich, Gewurtztraminer 2008
Rodney Strong, Charlotte's Home Sauvignon Blanc 2012
Canoe Ridge, Pinot Gris, Expedition 2012
Edmunds St. John, Bone-Jolly Gamay Noir Rose 2012
Dark Horse, Big Red Blend No. 01A
Elk Cove, Pinot Noir Rose 2012
Fletcher, Shiraz 2010
Picollo, Gavi 2011
Domaine Eugene Carrel, Jongieux 2012
Eyrie, Pinot Blanc 2010
Atticus, Pinot Noir 2010
Walter Scott, Pinot Noir, Holstein 2011
Shingleback, Cabernet, Davey Estate 2010
Coppola, Sofia Rose 2012
Joel Gott, 851 Cabernet 2010
Pol Roget Reserve Sparkling Wine
Mount Eden Chardonnay, Santa Cruz Mountains 2009
Rombauer Chardonnay, Napa Valley 2011
Beringer, Chardonnay, Napa Reserve 2011
Kim Crawford, Sauvignon Blanc 2011
Schloss Vollrads, Spaetlese Rheingau 2010
Belle Glos, Pinot Noir, Clark & Telephone 2010
WillaKenzie, Pinot Noir, Estate Cuvee 2010
Blackbird Vineyards, Arise, Red 2010
Chauteau de Beaucastel, Chateauneuf-du-Pape 2005
Northstar, Merlot 2008
Feather, Cabernet 2007
Silver Oak, Cabernet, Alexander Valley 2002
Silver Oak, Cabernet, Napa Valley 2002
Trader Joe's, Chardonnay, Grower's Reserve 2012
Silver Palm, Cabernet, North Coast 2010
Shingleback, Cabernet, Davey Estate 2010
E. Guigal, Cotes du Rhone 2009
Santa Margherita, Pinot Grigio 2011
Alamos, Cabernet 2011
Cousino Macul, Cabernet, Anitguas Reservas 2009
Dreaming Tree Cabernet 2010
1967, Toscana 2009
Charamba, Douro 2008
Horse Heaven Hills, Cabernet 2010
Lorelle, Horse Heaven Hills Pinot Grigio 2011
Avignonesi, Montepulciano 2004
Lorelle, Willamette Valley Pinot Noir 2011
Villa Antinori, Toscana 2007
Mercedes Eguren, Cabernet Sauvignon 2009
Lorelle, Columbia Valley Cabernet 2011
Purple Moon, Merlot 2011
Purple Moon, Chardonnnay 2011
Horse Heaven Hills, Cabernet 2010
Lorelle, Horse Heaven Hills Pinot Grigio 2011
Avignonesi, Montepulciano 2004
Lorelle, Willamette Valley Pinot Noir 2011
Villa Antinori, Toscana 2007
Mercedes Eguren, Cabernet Sauvignon 2009
Lorelle, Columbia Valley Cabernet 2011
Purple Moon, Merlot 2011
Purple Moon, Chardonnnay 2011
Abacela, Vintner's Blend No. 12
Opula Red Blend 2010
Liberte, Pinot Noir 2010
Chateau Ste. Michelle, Indian Wells Red Blend 2010
Woodbridge, Chardonnay 2011
King Estate, Pinot Noir 2011
Famille Perrin, Cotes du Rhone Villages 2010
Columbia Crest, Les Chevaux Red 2010
14 Hands, Hot to Trot White Blend
Familia Bianchi, Malbec 2009
Terrapin Cellars, Pinot Gris 2011
Columbia Crest, Walter Clore Private Reserve 2009
Campo Viejo, Rioja, Termpranillo 2010
Ravenswood, Cabernet Sauvignon 2009
Quinta das Amoras, Vinho Tinto 2010
Waterbrook, Reserve Merlot 2009
Lorelle, Horse Heaven Hills, Pinot Grigio 2011
Tarantas, Rose
Chateau Lajarre, Bordeaux 2009
La Vielle Ferme, Rose 2011
Benvolio, Pinot Grigio 2011
Nobilo Icon, Pinot Noir 2009

The Occasional Book

Kent Haruf - Eventide
David Halberstam - Summer of '49
Norman Mailer - The Naked and the Dead
Maria Dermoȗt - The Ten Thousand Things
William Faulkner - As I Lay Dying
Markus Zusak - The Book Thief
Christopher Buckley - Thank You for Smoking
William Shakespeare - Othello
Joseph Conrad - Heart of Darkness
Bill Bryson - A Short History of Nearly Everything
Cheryl Strayed - Tiny Beautiful Things
Sara Varon - Bake Sale
Stephen King - 11/22/63
Paul Goldstein - Errors and Omissions
Mark Twain - A Connecticut Yankee in King Arthur's Court
Steve Martin - Born Standing Up: A Comic's Life
Beverly Cleary - A Girl from Yamhill, a Memoir
Kent Haruf - Plainsong
Hope Larson - A Wrinkle in Time, the Graphic Novel
Rudyard Kipling - Kim
Peter Ames Carlin - Bruce
Fran Cannon Slayton - When the Whistle Blows
Neil Young - Waging Heavy Peace
Mark Bego - Aretha Franklin, the Queen of Soul (2012 ed.)
Jenny Lawson - Let's Pretend This Never Happened
J.D. Salinger - Franny and Zooey
Charles Dickens - A Christmas Carol
Timothy Egan - The Big Burn
Deborah Eisenberg - Transactions in a Foreign Currency
Kurt Vonnegut Jr. - Slaughterhouse Five
Kathryn Lance - Pandora's Genes
Cheryl Strayed - Wild
Fyodor Dostoyevsky - The Brothers Karamazov
Jack London - The House of Pride, and Other Tales of Hawaii
Jack Walker - The Extraordinary Rendition of Vincent Dellamaria
Colum McCann - Let the Great World Spin
Niccolò Machiavelli - The Prince
Harper Lee - To Kill a Mockingbird
Emma McLaughlin & Nicola Kraus - The Nanny Diaries
Brian Selznick - The Invention of Hugo Cabret
Sharon Creech - Walk Two Moons
Keith Richards - Life
F. Sionil Jose - Dusk
Natalie Babbitt - Tuck Everlasting
Justin Halpern - S#*t My Dad Says
Mark Herrmann - The Curmudgeon's Guide to Practicing Law
Barry Glassner - The Gospel of Food
Phil Stanford - The Peyton-Allan Files
Jesse Katz - The Opposite Field
Evelyn Waugh - Brideshead Revisited
J.K. Rowling - Harry Potter and the Sorcerer's Stone
David Sedaris - Holidays on Ice
Donald Miller - A Million Miles in a Thousand Years
Mitch Albom - Have a Little Faith
C.S. Lewis - The Magician's Nephew
F. Scott Fitzgerald - The Great Gatsby
William Shakespeare - A Midsummer Night's Dream
Ivan Doig - Bucking the Sun
Penda Diakité - I Lost My Tooth in Africa
Grace Lin - The Year of the Rat
Oscar Hijuelos - Mr. Ives' Christmas
Madeline L'Engle - A Wrinkle in Time
Steven Hart - The Last Three Miles
David Sedaris - Me Talk Pretty One Day
Karen Armstrong - The Spiral Staircase
Charles Larson - The Portland Murders
Adrian Wojnarowski - The Miracle of St. Anthony
William H. Colby - Long Goodbye
Steven D. Stark - Meet the Beatles
Phil Stanford - Portland Confidential
Rick Moody - Garden State
Jonathan Schwartz - All in Good Time
David Sedaris - Dress Your Family in Corduroy and Denim
Anthony Holden - Big Deal
Robert J. Spitzer - The Spirit of Leadership
James McManus - Positively Fifth Street
Jeff Noon - Vurt

Road Work

Miles run year to date: 250
At this date last year: 96
Total run in 2013: 257
In 2012: 129
In 2011: 113
In 2010: 125
In 2009: 67
In 2008: 28
In 2007: 113
In 2006: 100
In 2005: 149
In 2004: 204
In 2003: 269


Clicky Web Analytics