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About The daily Astorian. (Astoria, Or.) 1961-current | View Entire Issue (Sept. 2, 2015)
5A THE DAILY ASTORIAN • WEDNESDAY, SEPTEMBER 2, 2015 :HOOFRQQHFWHGHQHUJ\EL]¿QDJOHVWD[FUHGLWUXOHV¿[ By HILLARY BORRUD Capital Bureau David Zalubowski/AP File Wind turbines blow in the wind south of Cheyenne, Wyo., in October 2002. Oregon ener- gy tax credits were used to fund some wind and solar power projects. HUJ\ HI¿FLHQF\ SURMHFWV ODZ- makers wanted to incentivize. Close ties %OXH 7UHH 6WUDWHJLHV KDV ties to the Department of Energy going back to at least the start of then-Gov. John Kitzhaber’s third term, ZKHQ WKH ¿UP ODQGHG D FRQ- WUDFWZLWKWKHQRQSUR¿W&OHDQ Energy Works Oregon to promote the state’s Cool 6FKRROV HQHUJ\ UHWUR¿W SUR- JUDPWRVFKRROGLVWULFWV7KH consultants also administered grants to supplement the state program. 7KHGHSDUWPHQWUXQV&RRO Schools, which was part of Kitzhaber’s job creation plat- form during his 2010 cam- SDLJQ 7KH SURJUDP KHOSV schools to install new ener- J\HI¿FLHQW WHFKQRORJ\ VXFK as lighting and heating, ven- tilation and cooling systems. %OXH 7UHH 6WUDWHJLHV DOVR interacted with the city of Portland, the governor’s of- ¿FHDQG&OHDQ(QHUJ\:RUNV Oregon even before the Cool Schools contract. Aaron Berg, the company’s founder and owner, contract- ed with the city of Portland in 2010 to help launch Clean Energy Works Oregon, which got its start with $20 million in federal economic stimulus PRQH\ 7KH .LW]KDEHU DG- ministration was interested LQ WKH QRQSUR¿W¶V ZRUN DQG while Berg was Clean Energy :RUNV 2UHJRQ¶V FKLHI ¿QDQ- cial adviser, the governor’s business adviser Scott Nelson DWWHQGHGWKHQRQSUR¿W¶VPHHW- ings. Consultants working for %OXH 7UHH 6WUDWHJLHV DOVR LQ- cluded Matthew Collier and John Warner, who previously worked at the Portland Devel- opment Commission. Collier and Warner also marketed tax credits through the corpora- WLRQ5'7)0,QF 7RJHWKHU %OXH7UHH 6WUDW- HJLHVDQG5'7)0KDYHOLQHG up more than two dozen tax credit sellers, including sever- al local governments, and ap- proximately 50 buyers since they started brokering tax credits in 2009. Public clients included the Port of Portland, Metro regional government, 7UL0HWWUDQVLWDJHQF\DQG&R- lumbia and Marion counties. 5'7)0 GLVVROYHG ODVW \HDU and the consultants now all ZRUNIRU%OXH7UHH6WUDWHJLHV Berg doesn’t characterize %OXH7UHH6WUDWHJLHVDVDPD- jor broker of Oregon energy tax credits. Nonetheless, Berg VDLG%OXH7UHH6WUDWHJLHVDQG 5'7)0KDYHKHOSHGVHOODS- proximately $15 million in state energy tax credits as of HDUO\ $XJXVW 7KH 3RUWODQG %XUHDX RI 7UDQVSRUWDWLRQ alone sold roughly $2 million worth of tax credits through %OXH7UHH6WUDWHJLHV Still, Berg said, “we’re not a big player in this.” %HUJ SRLQWHG WR ¿JXUHV reported by the EO Media Group and Pamplin Media Group Capital Bureau, that $703.6 million in Oregon business energy tax credits were sold to investors from WR 7KH 'HSDUW- ment of Energy was also still facilitating tax credit sales during that period. Other tax credit brokers were mostly DFFRXQWLQJ¿UPVODZ\HUVDQG ¿QDQFLDO DGYLVHUV DFFRUGLQJ WR FKLHI ¿QDQFLDO RI¿FHU$Q- thony Buckley and state re- cords. Local governments and private clients paid the two ¿UPV KXQGUHGV RI WKRXVDQGV of dollars for facilitating the sale of their credits. Accord- ing to public records, Blue 7UHH 6WUDWHJLHV DQG 5'7)0 charged a commission of 2 percent to 10 percent on the tax credit sales. %HUJVDLG%OXH7UHH6WUDWH- gies started to broker tax cred- it sales after meeting people ZKR ZHUH VWUXJJOLQJ WR ¿QG buyers. “We didn’t seek it out,” Berg said. “Our experience in the ’09, ’10, ’11 days was our clients had a problem. And their problem was (Or- egon Department of Energy) wasn’t selling their credits for them. But for that problem, we would never be in this business.” Rachel Wray, a spokes- woman for the Department of (QHUJ\ VDLG LW ZDV GLI¿FXOW for the agency to keep up with demand for buyers after the state expanded the program. 7KH/HJLVODWXUHSDVVHGDPD- jor expansion of the business energy tax credits in 2007 at WKH XUJLQJ RI WKHQ*RY 7HG .XORQJRVNL 7KHQ DIWHU LW became clear the business energy tax credit would cost the state far more in lost rev- HQXHWKDQHQHUJ\RI¿FLDOVKDG promised, lawmakers voted to end that tax credit in 2011. (QHUJ\ RI¿FLDOV VKLIWHG WKHLU focus away from helping en- HUJ\ SURMHFWV ¿QG EX\HUV IRU their tax credits. Blue Tree makes connection Around the same time, %OXH 7UHH 6WUDWHJLHV VHFXUHG the 16-month $106,000 con- tract through Clean Energy Works to promote Kitzhaber’s &RRO 6FKRROV HQHUJ\ UHWUR¿W program and administer sup- plemental grants to schools. Stephanie Swanson, director of marketing for Clean Energy Works, said the federal stimu- lus funds carried a requirement to spend some of the money on projects that would increase it would allow the deep dis- counts, because Colello had discussed the issue with a tax auditor at the Department of Revenue and other brokers had heard rumors the ener- gy agency was allowing the deals. ,Q -DQXDU\ 6HQLRU 0DQ- DJHU ,ULQD $QWRQDFKH DW WKH DFFRXQWLQJ¿UP0RVV$GDPV emailed Colello to ask if the state was allowing deeper dis- counts on the tax credit sales than allowed under state rules. Colello responded that an un- LGHQWL¿HG EURNHU KDG LQGHHG arranged for deeper discounts and Buckley was involved in those discussions. Moss Adams’ clients also wanted to more deeply dis- count their tax credits, An- tonache wrote in emails to Colello and Buckley. How- ever, Buckley suggested in a February email to Antonache that Moss Adams should wait WR ¿QDOL]H WKH GHDOV XQWLO DI- ter the Department of Energy made planned rule changes. %OXH 7UHH 6WUDWHJLHV VWLOO operated on different advice from Buckley, and vice pres- LGHQW RI ¿QDQFH -RKQ:DUQHU wrote in a February email to &ROHOORWKDW³LWLV%OXH7UHH¶V understanding, based on our communications with An- thony Buckley, that (Oregon Department of Energy) has received the guidance needed to allow it to proceed with is- VXLQJ)LQDO&HUWL¿FDWHVWRWD[ credit buyers).” ,Q WKH HQG .DSODQ ZRXOG step in to ensure the deals %OXH 7UHH 6WUDWHJLHV KDG QH- gotiated based on Buckley’s advice could proceed. Berg said the company did nothing wrong. ³%OXH 7UHH LV QRW WKH EDG JX\KHUH´%HUJVDLG³,GRQ¶W EUHDNUXOHV,ORRNWRFKDQJH rules sometimes, when they need to change.” The Capital Bureau is a collaboration between EO Media Group and Pamplin Media Group. A Project of North Coast Food Web TH U P 4:3 IE W 0 & A 6:3 LK 0 p .m 3-7 RSD p.m AYS . . od Fo SALEM — Not every business can convince state government to change regula- tions on its behalf. But that is what a small 3RUWODQG¿UPFDOOHG%OXH7UHH Strategies did earlier this year. 7KH ZHOOFRQQHFWHG JUHHQ energy consultancy developed a lucrative business brokering sales of Oregon energy tax credits, and its clients wanted to sell the credits below the state-mandated price. When an employee at the Oregon Department of Energy object- ed, agency director Michael Kaplan stepped in. “Effective immediately, please begin honoring all request (sic) for transfers of tax credits where the parties have negotiated the transac- tion price,” Kaplan wrote in a February email to employ- HHVDWWKHHQHUJ\DJHQF\7KH department would sort out the details later, including changing its rules to retroac- tively eliminate price regula- tions. 7KDW FKDQJH JDYH %OXH 7UHHDQGLWVFOLHQWVDFRPSHW- itive advantage over others selling the credits, an analysis of public records and emails by EO Media Group and Pam- plin Media Group reveals. Oregon issues tax credits WRUHQHZDEOHHQHUJ\DQGHI¿- ciency projects to help offset capital costs. Recipients can use the credits to reduce tax- es, or sell them to raise cash. 7KH/HJLVODWXUHKDVSDVVHG laws intended to ensure sell- ers receive close to the full value of the tax credit. At the time of Kaplan’s email, state rules still called for one of the tax credits to be sold for nearly 91 cents on the dollar, not 79 cents on the dollar as QHJRWLDWHGE\%OXH7UHH6WUDW- egies’ client Sky Lakes Med- ical Center in Klamath Falls. 7ZRRWKHUFOLHQWVSXEOLFWUDQ- sit providers in southern Ore- gon, had arranged to sell their tax credits for 80 cents on the dollar, rather than 95 to 98 cents under a pricing formula required in state law. )RU %OXH 7UHH 6WUDWHJLHV and its clients, the knowledge they could negotiate deeper discounts was a competitive advantage: they could mar- ket tax credits that were less expensive and therefore more attractive to buyers. Energy RI¿FLDOV¶ GHFLVLRQV WR DOORZ the lower negotiated pric- es also meant the tax credits raised less money for the en- HQHUJ\HI¿FLHQF\IRUFRPPHU- cial buildings. %OXH7UHH6WUDWHJLHVFRRU- dinated with the state during the Cool Schools project and Berg said he consulted with Buckley, the energy agency’s FKLHI ¿QDQFLDO RI¿FHU DERXW the state’s plans for the pro- gram. Part of the job was to sign school districts up for the state program: Collier wrote in his resume that he “led an effort to support the success of the Oregon Cool Schools ,QLWLDWLYH WR KHOS VFKRRO GLV- WULFWV ¿QDQFH WKH LQVWDOODWLRQ RIHQHUJ\HI¿FLHQF\PHDVXUHV under the (state’s) Small- Scale Energy Loan Program.” Buckley, who oversees the Department of Energy’s tax incentive, energy grant and loan programs, did not respond to questions about when he met Berg and Collier. 7KH QHJRWLDWHG SULFH GHDOV %OXH7UHH6WUDWHJLHVDQGLWVFOL- ents pushed the state to allow this year date back to 2014, ZKHQ %XFNOH\ WROG %OXH7UHH 6WUDWHJLHV WKH ¿UPV¶ FOLHQWV could ignore tax credit price mandates in state law and pub- lished rules. Buckley said his interpretation of the law was based on discussions with the Oregon Department of Reve- nue and Oregon Department RI-XVWLFH7KHHQHUJ\DJHQF\ has refused to release a copy of the Department of Justice opinion on the issue. $OWKRXJK%OXH7UHH6WUDW- egies’ clients struck deals based on Buckley’s advice, another Department of Ener- gy employee stood in the way. Joe Colello, who handled tax credits and other renew- DEOHHQHUJ\DQGHI¿FLHQF\LQ- centives at the agency, wanted Kaplan or the Department of -XVWLFHWRFRQ¿UPWKHDJHQF\ could legally process deals that appeared to violate the pricing formula mandated in VWDWH ODZ 7KH 'HSDUWPHQW of Energy was also under increased pressure to take a public position on whether Continued from Page 1A Signs like the Chapman Point 13 should give people a better idea of where they are, he added, and emergen- cy responders, including the U.S. Coast Guard in water or air rescues, a better idea of where to start looking. ,Q DGGLWLRQ WR WKH QXP- bered signs, Oregon Parks and Recreation installed more than 200 safety signs warn- ing visitors of hazards such as rip currents and sneaker waves at beach access points. 7KH\ DOVR OLVW SURKLELWHG DF- tivities such as littering and ¿UHZRUNV “Unfortunately, accidents happen on the beach. Roll- ing logs, rip tides and unsta- ble cliffs are all potentially dangerous,” said Calum Ste- venson, Oregon Parks ocean shore specialist. “Our goal was to clearly convey infor- mation that will keep visitors safe, like staying back from cliff edges and staying off logs. At the same time, we also aimed to reduce sign clut- ter and create a consistent and professional message from north to south.” 7KH VLJQV DUH DV FORVH DV 1/4 mile apart near population centers and up to two miles apart or more in remote areas. 7KH SURMHFW ZDV funded by visitor fees and Oregon lottery dollars dedi- cated to state parks. y et nl rk O Ma Signs: More than 200 safety signs were installed Meet Your Farmers Weekly SNAP Match How to identify a possible gas leak. If you smell ROTTEN EGGS it could be a gas leak. And the best thing to do is leave your home and call NW Natural. We’ll be out to make sure everything is safe. Unsure of what to do? Just take a look at our tips to the right. Smell. Go. Let Us Know. 800-882-3377 If you smell a rotten egg or sulfur odor, you hear a blowing or hissing sound, or you see blowing dirt, it could be a gas leak. What to do. Leave your home and the area immediately. Don’t use any electrical device such as a light switch, telephone, appliance or garage door opener. And don’t try to fi nd the leak yourself. Who to call. Go outside and use your cell phone, or a neighbor’s phone, and call NW Natural at 800-882-3377.