Tuesday, January 15, 2008

Surprised Mark Udall Wasn't There

Officials, including Bill Ritter, cut a ribbon on a solar energy facility on Fort Carson. The Gazette forgets in writing this puff piece that whether the federal government pays for its power directly or with federal tax rebates, it still pays the full bill for its power. Playing games with the accounting doesn't make it cheaper. If it did, we taxpayers should demand that all of the Department of Defense power needs be paid for with tax rebates.

The scope of the project is mind boggeling.

“This project is the largest solar project on an Army base,” said Erik Rothenberg, spokesman for 3 Phases Energy Services, part of the private public collaboration. “It is the sixth-largest solar project in the United States, the 70th largest in the world.”

Supposedly, the project cost $13 million dollars, but we question the figures. Our bet is that it does not include a hefty sum in tax credits. The story mentions tax credits but doesn't mention how much those credits were. Currently the Federal tax credit is 30%, or more than $6 million for this project. We don't know if the state also provided a tax credit.

If one assumes a very conservative interest rate on a $20 million investment of 5%, just the interest costs of this energy is $1 million a year. That $1 million assumes that the project never has to be paid off. If this lights 500 houses, the real cost of the electricity is $2000 a year per house. Just the electricity, and assuming no need for capital repayment or rainy day fund for repairs.

It looks like very expensive power to us. Mark Udall, who wasn't there, might argue that it was good public policy to build this solar collector, but he and others need to be honest about the costs involved. Pretending that a $20 million project cost $13 million to construct isn't fair to the taxpayer.

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