Senate Dems push Treasury to halt money that aids foreign wind turbine makers

Four Senate Democrats want the Treasury Department to prevent a key renewable energy program in the 2009 stimulus law from supporting foreign wind turbine manufacturing, or halt the program until legislation passes that achieves the same thing.

The senators are pushing new legislation that would modify the grant program to ensure it supports only renewable power projects that use U.S.-made materials, and create the bulk of their jobs here.

“We believe Treasury has the discretion to consider domestic job preservation and creation when distributing Section 1603 grants for wind and other clean energy projects,” states a Tuesday letter to Treasury Secretary Tim Geithner from Sens. Chuck Schumer (D-N.Y.), Sherrod Brown (D-Ohio), Robert Casey (D-Penn.) and Jon Tester (D-Mont.).

They add that if Treasury “chooses not to exercise its discretion,” then it should defer distribution of grants until their bill becomes law.

The controversy centers around a major stimulus grant program for construction of new wind farms, solar power plants and other “clean” energy generation projects in the U.S. The program allows Treasury grant funding for up to 30 percent of a project’s cost – developers can use the grants in lieu of traditional renewable energy tax credit financing, which dried up during the economic downturn. Treasury runs the program with the Energy Department.

The senators fear that the power projects, while built in the U.S., are creating component manufacturing jobs in other countries that could benefit U.S. workers.

In a Capitol press conference Wednesday, Schumer cited a planned $1.5 billion wind energy project in Texas – the lawmakers say the developers plan to tap $450 million in stimulus money but will rely on turbines made in China. “It’s so outrageous it just makes your blood boil,” Schumer said. “It’s hard to believe, it’s infuriating, it’s not why we voted for the stimulus.”

The senators’ bill would extend “buy American” provisions in the stimulus to all renewable energy projects that seek stimulus money, including the private projects that are making use of the new grants.

But DoE officials call the criticism off the mark. They note that the program funds U.S power generation projects that employ people here -- even if some components are made by foreign companies and built overseas.


“The program has doubled the pace of investment in America’s wind industry. Every dollar awarded through the 1603 program helps put Americans to work, and the funding only goes to projects built in the United States,” said DoE spokeswoman Stephanie Mueller.

“The best way to stimulate our manufacturing base is to stimulate demand for wind turbines in America, since manufacturers tend to locate where the demand is. In fact, the Recovery Act has already helped attract more than $10 billion of foreign investment into America’s wind industry, including new manufacturing plants. It’s the opposite of outsourcing, and we should encourage – not discourage – those kinds of investments,” she added.

The senators are citing a report by American University’s Investigative Reporting Workshop that found that 79 percent of the first $2 billion in grants under the program went to foreign wind companies.

But the American Wind Energy Association called the report misleading, because the grant program supports U.S. power generation projects. Also, the trade group noted that “Over 50 percent of turbine value, such as towers, blades, nacelle assembly, and some internal components are made in the U.S.”