CITIZEN POWER ALLIANCE

April 9, 2008 --

In the most forceful speech of his short tenure, Gov. Paterson declared yesterday that he intends to reduce next year's state budget by 5 to 10 percent - up to $12 billion - because the spending plan he inherited this year is "too big and too bloated."

"The first thing we have to do is tighten our belts," the governor told an audience of several hundred business and civic leaders at an Association for a Better New York breakfast.

He warned that the new $121.7 billion state budget - which was agreed to by the governor and legislative leaders hours later - would have to be revised because state revenues are collapsing, with the top 20 taxpayers providing $72 million from Jan. 1 to March 21, compared with $533 million in the same period last year.

While many states have slashed spending to deal with the unofficial recession, Paterson contended that New York - "which is more adversely affected by the economy" - has yet to come to grips with financial reality.

One source close to the governor praised the speech, saying he sounded like a "true fiscal conservative who can right the ship."

Paterson zeroed in on four spending programs for major overhauls:

* The STAR property-tax rebates. "Sending back rebates to individuals who are hoodwinked and controlled into thinking that 5 percent of the money they send to the state got sent back to them and somehow they're supposed to be happy about it, it's patently ridiculous," he said.

* The 640 public authorities. "Only 11 are regulated, "so maybe we should find out what the other 629 do because they consume billions of your and my dollars every year," he said.

* Enterprise zones "that haven't solve the problems" of unemployment for which they were designed.

* Industrial-development agencies that aren't increasing business.

Paterson said his aim was to cut spending by 5 to 10 percent "off the top and not balance the budget on those who need services, on the middle class, or people who are lucky enough to make a million dollars."

Hours later, he and legislative leaders finalized details on the budget for the current fiscal year, which began April 1.

Officials said it will increase spending by 4.9 percent and raise $429 million in business-tax "loophole closures" and another $130 million in new taxes and fees.

The new budget, which does not include a Democratic Assembly proposal to increase taxes on millionaires, adds $1.8 billion in new school funding, including 38 percent, or $684 million, for the city.

In a victory for the city, the Legislature rejected then-Gov. Eliot Spitzer's original plan to delay funding for school construction for 18 months, and also agreed to restore half of the $164 million proposed cut in revenue-sharing aid to the city.

The budget hikes the state tax on cigarettes by $1.25 per pack, require that out-of-state online companies such as Amazon.com charge New York sales taxes, and close corporate and bank tax loopholes, some temporarily.

WASHINGTON -(Dow Jones)- The U.S. Senate on Thursday voted to extend tax credits for wind-power and solar-energy projects, but the measure is unlikely to become law in its current form due to concern it would add to the nation's deficit.

By 88-8, the Senate added the renewable-energy tax credits to a major housing bill. Companies such as utility XCel Energy Inc. (XEL), the largest U.S. seller of wind-generated energy, have been calling on Congress to act quickly. The tax credits expire at the end of the year, but executives are making decisions now about whether to invest in renewable projects beyond this year.

The U.S. House of Representatives has hardened its opposition to this version of the tax-credit extensions, which are estimated to cost $6 billion over 10 years. House leaders have strong objections to deficit-financed tax breaks, and with few exceptions offset lost tax revenue with tax increases or spending cuts elsewhere.

"I doubt that the House will accept these extensions without some corresponding offsets," said Senate Energy and Natural Resources Committee Chairman Jeff Bingaman, D-N.M., on the Senate floor. "This leaves the administration with a key role to play in developing a compromise that will be acceptable to both chambers."

The warning to the White House came amid negotiations with Bingaman and Senate Finance Committee Chairman Max Baucus, D-Mont., about a compromise measure that would offset the budget shortfall created by extending the renewable-energy tax credits. While the Senate Democrats have reportedly given ground by dropping plans to finance the renewable-energy tax breaks by taking away tax breaks from oil companies, the talks appear to have reached an impasse.

The White House "rebuffed our request to identify any acceptable offsets," Bingaman said. He called on the Bush administration "to work with Congress in good faith to find a way to pay for these incentives."

A Treasury Department spokeswoman referred calls to a Treasury tax aide, who declined to comment.

Details Of Senate Measure

Under the Senate measure, put forward by U.S. Sens. Maria Cantwell, D-Wash., and John Ensign, R-Nev., companies would be able to continue taking a tax credit equal to 30% of the cost of buying solar equipment through the end of 2016.

Companies would be able to take a tax credit for starting up through next year new projects that produce electricity from renewable sources such as solar and wind power.

A host of other tax credits would be extended, including those for producing energy-efficient dishwashers, washing machines and refrigerators, and for residential purchases of solar hot water heaters and solar panels used to generate electricity.

Solar energy company stocks and options surged last week on optimism that Baucus was working on a compromise bill. Stocks in companies including Evergreen Solar Inc. (ESLR), First Solar Inc. (FSLR), SunPower Corp. (SPWR), Energy Conversion Devices Inc. (ENER), and Suntech Power Holdings Co. (STP) all rose at least 7% on Friday.

The US Securities and Exchange Commission has filed an action against GMC Holding Corporation and its CEO, Richard Brace, for defrauding investors by issuing false press releases touting the company's development of a motor technology device capable of generating unlimited energy.

On February 22, 2008, the Securities and Exchange Commission filed an action against GMC Holding Corporation (GMC) and its chief executive officer, Richard Brace, for defrauding investors by issuing false press releases touting the company's development of a motor technology device capable of generating unlimited energy and negotiations to sell this technology for hundreds of millions of dollars. The Commission's complaint further alleges that these false press releases enabled GMC and Brace to raise more than $2 million from investors through illegal unregistered offerings of the company's stock.

According to the Commission's complaint, GMC and Brace issued press releases in 2005 falsely claiming independent tests, issued by a professional engineer, on the motor device showed it was able to produce more energy than it consumed. In reality, according to the complaint, the press releases claiming that the motor device produced more energy than it consumed failed to include the professional engineer's limitations, namely that the efficiency lasted only a few moments and that they were unable to duplicate the results in subsequent tests.

The complaint also alleges that GMC and Brace issued false press releases in February and March 2006 stating that it was negotiating with unnamed S&P 500 corporations to acquire the company's technology for $300 - 500 million. These press releases, drafted by Brace, were utterly false. GMC and Brace never contacted, much less negotiated with, an S&P corporation, or any other company, regarding the sale of the company's technology.

According to the complaint, GMC's false press releases artificially pumped up the company's share price and trading volume and helped GMC raise more than $2 million from investors through illegal unregistered stock offerings, which provided GMC's only source of revenue.

The Commission's complaint charges that the defendants violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 (Exchange Act) by conducting an unregistered offering of securities and making material misrepresentations and omissions to investors.

The Commission's complaint seeks a final judgment permanently enjoining defendants from further securities laws violations, ordering defendants to disgorge their ill-gotten gains, and assessing civil penalties. The complaint further seeks an order barring Brace from serving as an officer or director of a public company and from participating in any offering of a penny stock.

At odds with the tenor of this severe censure, a notice posted on the GMC Holdings Corp website on Feb. 25, 2008 by Brace states: "We are continuing to pursue possible merger candidates and are in discussions with an entity which is in the environmental and alternative energy arena. This organization could serve as a very viable candidate to assist in the ongoing development of our electro magnetic technology."

On March 8, 2006 the Commission temporarily suspended trading in GMC's securities (Release No. 53442) and instituted administrative proceedings against GMC for failure to make its required periodic filings (Release No. 53448). On April 5, 2006, the Commission issued a settled order deregistering GMC's securities, finding the company had failed to file the required reports of a publicly traded company (Release No. 53601). The Commission acknowledges the assistance of the Financial Industry Regulatory Authority (FINRA) in this matter.

The GMC Hodings website mentions these actions and has a form for shareholders to sign up for private email notifications of additional business developments.

Wind farms can change the weather, according to a model of how these forests of giant turbines interact with the local atmosphere. And the idea is backed up by observations from real wind farms.

Somnath Baidya Roy from Princeton University, and his colleagues modelled a hypothetical wind farm consisting of a 100 by 100 array of wind turbines, each 100 metres tall and set 1 kilometre apart.

They placed the virtual farm in the Great Plains region of the US, an area suitable for large wind farms, and modelled the climate using data from Oklahoma.

During the day, the model suggests that wind farms have very little effect on the climate because the warmth of the sun mixes the lower layers of the atmosphere. But at night, when the atmosphere is stiller, the wind turbines have a significant effect.

“At hub height the turbine gives an extra input of turbulence to the wind, which increases the vertical mixing,” explains Baidya Roy. This brings down to ground level the warm night air and higher wind speeds that are normally found at 100 metres.

At 3 am the average wind speed in Oklahoma is 3.5 metres per second, but it increased to around 5 m/s in the model wind farm. The model also suggested that the temperature would increase by around 2°C underneath the 10,000 turbines. Over the course of a day this averages out to an increase in ground-level wind speed of around 0.6 m/s and a rise in temperature of around 0.7°C.

Heat of the night

How such a change might affect local wildlife and agriculture is not clear.

The findings are backed by real observations. Neil Kelley, a meteorologist at the National Renewable Energy Laboratory in Golden, Colorado, has gathered data from a wind farm in California.

“Although the wind farm was more dense and the turbines smaller we still found that the turbines tended to pull down heat and momentum from above, particularly during the night-time hours,” he says.

Meanwhile, Gustave Corten from the Energy Research Centre in Petten in the Netherlands is carrying out experiments with a model wind farm inside a wind tunnel. “I think the study is of much interest and I can confirm that large wind farms will affect the microclimate,” says Corten.

Baidya Roy says it may be possible to modify the wind turbines so that their effect on the weather is not so extreme. “If engineers can reduce turbulence then the turbine would become more efficient and the environmental impact would be reduced,” he says.

But no amount of engineering will change the fact that energy is being removed from the wind. “People tend to think that renewable energy is for free, but it isn’t. There is a price to pay for all kinds of consumption, including renewable energy,” says Baidya Roy.

Journal reference: Journal of Geophysical Research Atmospheres (DOI: 10.1029/2004 JD004763).

Kate Ravilious

MADRID, Apr. 10, 2008 (Thomson Financial delivered by Newstex) -- Iberdrola SA (OOTC:IBDSF) (OOTC:IBDRY) would reconsider its planned buy of Energy East (NYSE:EAS) , for some 6 billion euros, if the conditions imposed by the New York State Public Service Commission (NYPSC) are 'not reasonable,' ABC reported, citing comments by Iberdrola chairman Ignacio Sanchez Galan.

'If the conditions are reasonable, we hope to complete the acquisition before the third quarter of the year,' in line with the original deadline set by the Basque utility, he added.

Over the last few months press reports have flagged that the deal could be blocked by the NYPSC on concerns about a possible carve-up of Iberdrola's assets in the event of a takeover bid.

The utility has reportedly been in the sights of EDF, perhaps in a joint offensive with core shareholder Actividades de Construccion y Serivicios SA, although more recently a domestic tie-up between Iberdrola and Gas Natural SDG SA (NYSE:GNN) has been tipped as the most likely scenario.

ABC noted that the NYPSC is the only authoritative body in the U.S. which has not given the green light to the East Energy (OOTC:EECFF) (TSXV:EEC) buy, a deal which is key to Iberdrola's expansion plans in the U.S.

ALBANY -- Lawmakers completed a $121.7 billion state budget Wednesday that includes substantial borrowing and that budget critics say is precariously balanced on one-time revenues and more than $1 billion in increased taxes and fees.

The budget raises spending 4.9 percent from the $116 billion spent last year.

The Legislature and Gov. David Paterson agreed to split $1.28 billion for big-ticket items that will likely be supported through bonds, including $46 million for the proposed Advanced Micro Devices chip fab in Malta.

Some of the new revenues close loopholes affecting businesses, but some will hit consumers directly, such as a $1.25 increase on the per-pack tax on cigarettes and $70 million more in assessments on health insurance policies.

Paterson said the budget is imperfect and spending habits will have to change drastically, given the nation's faltering economy.

(Click to read entire report)

ALBANY -- The state is joining the hunt for the holy grail of global warming -- a way to reach deep underground to permanently entomb fossil fuel-emitted carbon dioxide, a greenhouse gas that fuels rising temperatures.

This summer, geologists will study old natural gas wells and other subterranean features in the Southern Tier and western New York as potential resting places for pumped-in CO2 from power plants, under a $4 million, three-year program by the state Energy Research and Development Authority and a host of energy companies.

The storage method known as sequestration could give extended life to high-CO2 fuels like coal and oil, whose emissions are worsening global warming.

President Bush has been a powerful advocate for sequestration, which could help the fuel industry avoid potential CO2 emission limits that climate scientists say will be needed to to avoid catastrophic temperature increases.

"This is one of our efforts to mitigate climate change," said authority President and CEO Paul Tonko. "We are going to scope out areas that might be suitable for this and address some of the geological uncertainties."

(Click to read entire article)

As the U.S. Congress gropes its way toward a new energy policy, it’s creating unlikely alliances. The latest? The National Association of Manufacturers is lobbying senators to support tax-credits for renewable energy and energy efficiency.

The NAM, the manufacturing industry’s trade group, has been a vocal opponent of other bills in Congress that would create a cap-and-trade scheme to limit emissions of greenhouse gases. It commissioned a much-criticized study arguing that the Lieberman-Warner climate bill would cripple U.S. industry.

Now, NAM says it’s all in favor of alternative energy and greater energy efficiency, two key planks of the amendment introduced by Sens. Maria Cantwell and John Ensign to a housing bill under consideration in the Senate. And not just passingly in favor: NAM says in a letter today to lawmakers that it will consider the vote on the amendment one of its “key manufacturing votes” this year, part of a scorecard that grades how industry-friendly members of Congress are. How do we know? To emphasize its point, NAM released its letter publicly.

(Click to read entire article)

Biofuels are touted as a planet-friendly substitute for coal and oil. While ethanol (made from corn or sugarcane) and biodiesel (made from soybean or palm oil) burn cleaner and produce less greenhouse gas than fossil fuels do, critics warn that biofuels have their own dark side. Cuba's Fidel Castro even called powering cars with food "sinister" policy, but here's a more level-headed breakdown of the impact and limitations of farming for fuel.

Corn. One-fifth of the U.S. corn crop is now turned into ethanol at 114 biorefineries, located primarily in the Midwest. To meet Bush's 2017 target of producing 35 billion gallons of ethanol, the entire current U.S. crop would need to be turned into fuel. So long, cornflakes?

Soybean. A dietary staple in Asia for 2,000 years, soybeans today are increasingly grown for oil and animal feed. The U.S. leads the world in soybean and corn production, but it would have to turn 100% of both crops into fuel in order to offset just 11% of U.S. on-road fuel consumption.

Palm. Plantations of oil palms have been held responsible for 87% of the deforestation in Malaysia already. Growing demand for biofuels is expected to only increase the pace of destruction of rain forests on the biologically rich islands of Borneo and Sumatra.

Sugarcane. Boosters see Brazil, which meets 40% of its transportation fuel needs through ethanol, as a model to emulate. But critics warn that sugarcane encroaches on wildlife habitat, degrades soils and causes pollution when fields are burned.

A Texas electricity broker is the latest entrant into the increasingly crowded marketplace of firms selling power in New York.

Reliant Energy Inc. of Houston is establishing an office in Albany to sell to large business, institutional and industrial customers.

Reliant provides power to 1.8 million businesses and residences, mostly in Texas. It has an interest in or leases 38 power plants, selling electricity at wholesale to utility companies, municipalities and companies nationwide.

In New York, Reliant is targeting the service areas of Rochester Gas & Electric, National Grid, New York State Electric & Gas and Con Edison, said Jim Ajello, senior vice president of commercial and industrial business development.

According to the state Public Service Commission, 44 electricity providers are operating in New York, and 25 more are eligible but are not currently serving customers. Nine companies are seeking PSC certification, said spokesman James Denn.

The PSC certified Reliant to act as an electricity broker last fall. Reliant then had to be deemed eligible by utility companies.

According to U.S. Energy Department figures, average electricity prices in New York are higher than national averages.

Having another power provider in the Rochester area could help to lower prices, said Lawrence Southwick, associate professor emeritus of managerial economics at the State University of New York at Buffalo.

Ajello said Reliant will offer a variety of pricing plans, from short-term variable rates to long-term fixed rates, as well as renewable energy options.

Reliant will not generate any of the power it provides to New York business customers, Ajello said. It will act as a broker, buying cheap power on the wholesale market for customers. It is developing plans to offer power to smaller businesses and is considering the individual consumer market, Ajello said.

Reliant paid a $445 million settlement to consumers and utilities in 2005 to settle claims that it had held back electricity during California's energy crisis of 2000 and 2001, causing outages and skyrocketing prices.

MDANEMAN@DemocratandChronicle.com