Deepwater forgot to read PBN

In last night’s Channel 10 interview, Governor Carcieri’s former chief of staff – now lobbyist for Deepwater Wind, Jeff Grybowski, claimed that if Deepwater is allowed to create the larger wind farm “800 to 1000 jobs could be created.”

Unfortunatly, when Deepwater Wind CEO Bill Moore testified at the PUC, he admitted there was no evidence to prove that point and more recently the RI house of representative subcommittee on ports commissioned a report that shows future jobs supporting the ‘big wind farm’ probably would not materialize.

But why let facts get in your way.

Don’t forget to visit the RI Supreme Court today for the Toray Plastic/PoliTop case.


Windy Pork

Published in the Providence Business News on Monday.

Offshore Wind is Pork

Should that matter to the RI Supreme Court

Deepwater Wind has accomplished something that we at the Ocean State Policy Research Institute (OSPRI) thought impossible. Their proposal to create 6 permanent jobs with $400 million in excess costs to Rhode Islanders makes the federal stimulus $646,214 per job look positively cost effective (Cato, 2009).

The truth is that neither is a good idea. Both show what happens when government money is funneled to politicians’ favored projects. This isn’t an allegation of corruption, per se, but recognition that government, operating without competitive pressures, isn’t very efficient and can’t out-perform the market when it comes to picking winners.

To be fair, the legislature has its eye on more jobs later, although no one has suggested how it can happen without even more enormous subsidies. And to add insult to injury, after all but ordering electric customers to spend the rent money on expensive windmills, the general assembly got a note of caution recently from a study for its special commission on ports. The report urged that Rhode Island go slow on investment in facilities for windmill support at Quonset, because the industry may not materialize.

But this is the purported pot of gold at the end of the ‘green’ rainbow that justifies us overpaying for electricity. What happened?

Despite Quonset’s extant facilities, the folks bilking Massachusetts ratepayers, Cape Wind, have decided to build from scratch in New Bedford, Mass. Shocking!

You start to see a pattern here?  The folks with an IV into our wallets in Rhode Island tout Rhode Island facilities, while these snake oil salesmen in Massachusetts offer the same patronage to Massachusetts.

Thankfully, although National Grid has thrown in the towel, no doubt thanks to a rich load of perks tossed in its direction, NSTAR the other major utility in Massachusetts, showed how effectively open bidding, rather than sole source contracting, can be for its ratepayers. NSTAR put its renewable energy contracts out for bid and market estimates show it will be paying under 10¢/kwh while the average pricing for Cape Wind and Deepwater Wind, considering escalators, is over 30¢/kwh.

This is a green apples to green apples comparison. Clean natural gas, which currently provides 97% of RI’s energy, is falling in price towards 5¢/kwh due to growing supply.

Even as the legislature gets a consultant’s report dismissing the promised benefits, the Deepwater project forges forward — facing perhaps its last significant governmental hurdle in the form of a case to be heard at the RI Supreme Court this Wednesday, Mar. 11th.

Should the emerging picture of these windmills as pork affect the Supreme Court review? The separation of powers tells us that policymaking is the job of the General Assembly and even if they made a bad decision to support Deepwater, it is not the Court’s job to act as a safety valve.

But the Court should take a “hard-look” at the administrative process that actually approved the contract. If, as it appears, the Economic Development Corporation’s testimony that economic benefits would flow from this project did not consider relevant factors in an open process, this undercuts the reliance courts normally place on agency decisions.

OSPRI has filed an Amicus Brief in the case asking that the court take cognizance of the “hard-look” doctrine in federal precedents that requires a court not only to find the administrative decision plausible, but to look to whether the decision was “fully reasoned”.

The RI Supreme Court has embraced the early “hard-look” precedents. Then Superior Court judge judge, O. Rogeriee Thompson, cited the penultimate in that line of cases, State Farm in deciding Manglass v. RIDHS, but the RI Supreme Court never reviewed that case. Now would be the time for the court to validate Judge Thompson’s citation and renew its commitment to the critical function of meaningful judicial review.

Agencies are not elected and yet they effectively make laws that govern our daily lives. There is no sleight to the separation of powers if courts take a “hard look” at agency decisions, so long as the court does not substitute its judgment for that of administrators. Typically, however, a decision that is deficient from a “hard-look” perspective is returned to the agencies for further consideration.

This is a process oriented rule, it may not result in a different decision, but it ensures that the fullest consideration has been afforded significant public policy decisions, and handing a $400 million bill to Rhode Islanders is just that.

From a political theory perspective this “hard-look” approach has a tension, serving as an implementation the separation of powers through the check and balance of judicial review while nonetheless mildly blurring the lines of the separate departments. To further public understanding of our arguments, we have arranged for a critique of their strong and weak points by visiting Brown University professor Steven Calabresi and others at the Political Theory Project at Brown on Tuesday, May 10th at 2:00.

Professor Calabresi teaches constitutional law at Brown, is a professor of law at Northwestern, a prolific legal author, a co-founder of the Federalist Society, and effectively a native son of Rhode Island. It is with great pride that OSPRI joins with the local Federalist Society organizing caucus to welcome Professor Calabresi to the legal theory discourse in our state.

Those interested in public policy generally and especially relative to the Deepwater Wind case are encouraged to attend both this forum and the court hearing.

Brian Bishop is the director of OSPRI’s Founders Project and Fellow on Regulatory Affairs.

Just in (no surprise): voters want more choice and accountability in education

There was a time, many moons ago, when people had confidence in public education to provide the best for their kids – but high cost and low performance has a way of changing things as exhibited by a recent survey from our friends at RI-CAN:

  • Super Leaders. Over 75 percent of voters think the leaders of Rhode Island’s public schools should keep the momentum of education reform by implementing the state’s Race to the Top plan.
  • Super Schoolhouses. 60 percent of voters think public charter schools should be reimbursed for their school building costs at an equal rate to traditional public schools.
  • Super Readers. 93 percent of voters support requiring Rhode Island teachers to pass a reading proficiency test before they can teach elementary school students.

Another low ranking for RI

Not to sound like a broken record, but is this any surprise?  From Ernst and Young:  Rhode Island has the 49th worst “tax burden on new investment” in the country.

If you are a little sad because we came in second to the last, don’t worry, if Chafee’s proposal to increase taxes on these and other items goes through, we can achieve 50th! (or 51 if you count DC)

Tax Day Rally

Somebody has to sell it

After yesterday’s showing at the State House where business leaders from all corners protested against the Governor’s proposed budget, it looks like EDC director Keith Stokes has the difficult job of selling it on the streets.  Here is the schedule for his chamber of commerce tour.  If you ever wondered if the EDC is looking out for the interest of the state or simply the salesforce for the governor’s “Winner Picker” agenda, you need look no farther for proof.

How Will Governor Chafee’s FY2012 Budget Impact RI Businesses? 

Businesses are asking how Governor Chafee’s Fiscal Year 2012 proposed budget will impact them.  The Rhode Island Economic Development Corporation invites you to learn more about the Governor’s budget and what it means for Rhode Island businesses.

RIEDC Executive Director Keith Stokes and a representative from the Rhode Island Department of Revenue will give an overview of the budget and provide detailed information and answer your questions about Governor Chafee’s Businesses Tax Competitiveness Proposal which includes:

a) reduction of the corporate income tax rate;

b) lowering and restructuring the minimum corporate tax/franchise fee; and

c) reduction and modernization of the state sales tax.
Some of the key questions that will be addressed include:

a) How will changes to the minimum corporate/franchise tax help small businesses?

b) How will the Governor’s tax proposal help retain and attract businesses in RI?

c) What are the impacts of the proposed change to the sales tax?

Speaking Engagements (scheduled to date)

April 21, 2011
Hosted by the Newport Chamber

Newport Harbor Hotel and Marina, 49 America’s Cup Ave., Newport
For more information or to register click here.

April 22, 2011
8:30 a.m.
Hosted by the  Central RI Chamber

NE Tech, 2480 Post Road, Warwick
For more information or to register, please contact the Central RI Chamber at 401.732.1100

April 27, 2011
8 a.m.
Hosted by the Northern RI Chamber

Kirkbrae Country Club, 197 Old River Road, Lincoln,
For more information or to register click here.

April 29, 2011
Hosted by the South Kingstown Chamber

South Kingstown Chamber, 230 Old Tower Hill Road, Wakefield
For more information or to register click here.

May 4, 2011
8 a.m.
Hosted by the North Kingstown Chamber

Pelly’s 19th Hole, 615 Callahan Road, North Kingstown
For more information or to register click here.

May 6, 2011
5:00 p.m.
Hosted by the East Greenwich Chamber

Location: East Greenwich Yacht Club
For more information or to register please contact the EG Chamber at 401.885.0020.

May 12, 2011
8:30 a.m.
Hosted by the Charlestown and Greater Westerly/Pawcatuck
Chambers of Commerce
Location: Shelter Harbor Inn
For more information or to register please contact the Greater Westerly Pawcatuck Chamber at 401.596.7761

May 18, 2011
8 a.m.
Hosted by the Narragansett Chamber

Location: To Be Determined
For more information or to register please contact the Narragansett Chamber directly at 401.783.7121

More dates and locations to be announced.

Event information is subject to change. Please register with the appropriate Chamber of Commerce to get updates regarding these talks.

In case you missed it, and so you don’t

In case you missed it, we had a quick response to the recent ProJo article on the Jack McConnell nomination to the U.S. District Court. These all follow our PR on the subject issued the day before.

The Journal reported that Senator Whitehouse defended answers to the Judiciary Committee by U.S. District Court nominee Jack McConnell as “accurate in every respect.” We beg to differ, as did Senator Grassley, the ranking Republican (“Senate panel endorses McConnell for R.I. judgeship, ”April, 1).

McConnell said, “My law firm entered into an agreement with the State of Rhode Island that set forth the attorney fees as 16 2/3% of any recovery obtained as a result of the litigation.” In fact, the contract says: “In the event the litigation is resolved, by settlement or judgment, … the parties hereto agree to seek . . . compensation.”

The fee agreement is triggered not by “any recovery” but by “settlement or judgment,” neither of which occurred in the DuPont Deal by the testimony of both Dupont and then Rhode Island Atty. Gen. Patrick Lynch. In the event of “in-kind” payments we would not be obligated to pay a fee.

Continue reading HERE.

And so you don’t miss it, I’ll be on Channel 10 news this evening (6:00) interviewed by Bill Rappleye on the recently reported raises given out at the State House.

It is difficult to say exactly which 10 second quote will be taken from the 10 minute interview, but here’s the point I made, I don’t begrudge anyone making money from hard work, but it is understandable why people are outraged by these raises as we suffer in an economy where benefits are being cut and people are leaving our state because of the onerous taxes (see our Leaving RI study for documentation of this fact).  Handing out raises to anyone in government in this environment is offensive. But I think the ire is misguided when you consider the fact that teachers in Rhode Island who happen to be in the first 10 years of employment get close to a 9% raise NOT because of their job performance, but simply because they were employed another year.  Those and other exorbitant contractual raises based solely on seniority that apply to everyone are the real budget deficit driver.

Of course, if more government services were provided by private entities, who have “competition” to ensure compensation is judiciously allocated, then all these problems would go away, now, wouldn’t they…