At a recent ACORE webinar trying to sell a new transmission investment tax credit to a friendly, money-spewing administration, GBE owner Invenergy stated that it NEEDED the proposed tax credit to "enable" the Grain Belt Express.
Financing large-scale, interregional transmission can be particularly challenging for merchant developers, said Shashank Sane, senior vice president and head of transmission at Invenergy. “The beneficiaries of these projects can be diverse, and so in order to monetize the value of those lines, we have to find the stakeholder who is willing to pay for a certain benefit and create those links,” Sane said. “That’s really not the right model.”
For example, he said, Invenergy’s Grain Belt Express project now under development is aimed at bringing wind power from Kansas across Missouri, Illinois and ultimately to Indiana, providing a connection to MISO and PJM.
“The ITC is the key tool that will enable [the project] because it addresses the cost allocation problem and paying for those multiple benefits a single beneficiary is not willing to pay for,” Sane said.
The ITC is a new tax credit that will allow the owner of new transmission to take a credit on their taxes of 30% of the project's cost. If Grain Belt Express is supposed to cost $2B (latest estimate I could find), then it would receive $600M (that's 600 MILLION!) of federal tax credits paid for by U.S. taxpayers. What's more, the ITC is proposed to be refundable, if the transmission owner does not pay enough taxes to offset the credit it earns. If Invenergy only owes $50M of federal taxes in the year it puts GBE in service, under the new proposal it could pay no taxes at all that year and receive a $550M tax refund from the federal government.
As a supposed merchant transmission project, GBE is supposed to pay for its own project and collect all its costs from voluntary customers who negotiate rates for service on GBE. GBE is supposed to shoulder all risk of its project. If GBE fails, there are no captive ratepayers to cover its costs. However, GBE is now proposing, indeed saying it NEEDS, a new handout from American taxpayers in the neighborhood of $600M in order to build its project.
Just yesterday, GBE "needed" eminent domain to take land from Missouri farmers cheaper than it could acquire the same land in the free market. Keeping land costs low keeps Invenergy's costs low, and lower costs translate to higher profits. Today, GBE "needs" a $600M taxpayer handout to further increase its profits. GBE just keeps "needing," and taking, more and more from people.
Isn't it time to say enough?
Stop enabling Invenergy's profits! Start supporting the citizens of Missouri who elected you.
As a supposed merchant transmission project, GBE is supposed to pay for its own project and collect all its costs from voluntary customers who negotiate rates for service on GBE. GBE is supposed to shoulder all risk of its project. If GBE fails, there are no captive ratepayers to cover its costs. However, GBE is now proposing, indeed saying it NEEDS, a new handout from American taxpayers in the neighborhood of $600M in order to build its project.
Just yesterday, GBE "needed" eminent domain to take land from Missouri farmers cheaper than it could acquire the same land in the free market. Keeping land costs low keeps Invenergy's costs low, and lower costs translate to higher profits. Today, GBE "needs" a $600M taxpayer handout to further increase its profits. GBE just keeps "needing," and taking, more and more from people.
Isn't it time to say enough?
Stop enabling Invenergy's profits! Start supporting the citizens of Missouri who elected you.
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