Wind Power Broker

I know that many people interested in energy technology do not read business publications on a regular basis, so I thought I would share my reaction to a revealing portrait of a wind energy power broker that was published in the recent Forbes Special Edition titled “The 400 Richest People in America”.

The article – found on page 72 of the print edition – is titled Wind Broker and this is how it starts:

John P. Manning built a billion-dollar fortune on low-income housing, plying a gift for political friend-making and hard-core lobbying to create low-income housing tax credits and reap prodigious profits on a portfolio of 147,000 apartments worth $11 billion. Along the way he averted failure myriad times, rescued by luck and powerful allies.

Now Manning, 58, is chasing his next windfall. To pull it off he will need fortune and friends in abundance. He is raising up to $400 million to harness the wind of energy and the tax code for subsidies. On these wind farms, each dotted with multiple million-dollar towers topped with giant, perfectly curved propellers, government loot is as much a driving force as moving air. But the federal tax credit for wind energy is set to expire at the end of next year. Gulp.

That is as clear a lead as I have read in a very long time. Manning is number 354 on the Forbes 400 list. He got there by having plenty of political “friends”, and he has his sights set on making his fortune larger by accumulating wind energy tax credits and by successfully convincing his friends to extend those credits – perhaps indefinitely.

I put the word friends in quotes because I work in Washington, DC where one of the favorite aphorisms is “If you want a friend in Washington, get a dog.” Here, the common way to obtain friends like the ones described in the article is by giving them as much money as possible and by convincing others to do the same. Some call that type of arrangement a “campaign contribution” and “fund raising”; others use somewhat nastier words.

Whenever an antinuclear wind supporter complains about nuclear subsidies, I get a bit embarrassed because I know that the nuclear power industry has worked pretty hard to obtain some grants and tax credits that are similar to those of the wind industry. I understand why, but I sure wish that our leaders would have worked instead to level the playing field by pushing to get rid of all energy subsidies.

The energy business is extremely profitable and should be self-financing for all useful production systems. For example, the top five oil companies reported profits in the most recent quarter that total more than $240,000 per minute. In another example, a recent report by ISO New England contains the interesting observation that a single additional 1000 MWe coal or nuclear plant in New England would have saved electrical power customers $600 million in 2005. (See Blackouts await without power upgrade: ISO New England warns $3.4B in plant investments needed)

Getting back to Mr. Manning, I was also intrigued by the mention in the article that his mother was a polio survivor who spent much of her life completely dependent on reliable electricity in order to continue breathing. I certainly hope that the wind power that will provide Mr. Manning with more riches does not destabilize the grid in the future.

There are plenty of other people that need the steady supply of electricity that cannot be provided by wind farms without plenty of backup from the grid. I also hope that the billions of dollars invested in the technology by the government and by private investors because of mandated renewable energy portfolios is measured for its actual contributions to power supply, not for its additions to “capacity” that is rarely available at the time when it is most needed.