Beneath Fiscal Cliff Jockeying, A Quieter Fight

WASHINGTON — For the American wind power industry, it’s as if the wind has stopped blowing. A crucial tax credit aimed at spurring renewable energy is set to expire at the end of the year, and Congress has yet to extend it. Major wind power projects are now stalled amid a shortage of finance and uncertainty over the rules going forward — a state of play threatening to eliminate tens of thousands of jobs.

“We’ve had multiple wind farm projects we’ve had to put on the back burner because of the delay,” said Mike O’Sullivan, senior vice president of development for NextEra Energy Inc., a large utility holding company based in south Florida.

Beneath the high-profile jockeying in Washington over the looming fiscal cliff — the package of tax increases and spending cuts set to take effect at year’s end absent an agreement for something more palatable — a quieter fight continues over subsidies the government provides to encourage renewable energy.

The so-called production tax credit has made wind and solar installations more financially appealing for investors, encouraging new projects. But with each passing day absent movement in Congress toward renewing the credit, investors grow more skittish about pouring money into wind and solar installations, fearful that they will not be able to secure a return on their capital, as the tax credits have traditionally reduced the cost of new projects by one-third.

O’Sullivan declined to specify which of NextEra’s projects are on ice, but the evidence of a job-killing slowdown has been emerging in multiple states. Everpower Renewables, a wind developer in Ohio, scrapped a $20 million project employing 200 construction workers; Siemens Wind Power, a major turbine manufacturer, laid-off more than 900 employees; and Katana Summit, a wind tower maker, has announced plans to shut down plants in Nebraska and Washington.

If the tax credit is allowed to expire, some 37,000 jobs could be eliminated, according to a study by Navigant Consulting.

“When you’re manufacturing, you don’t just fire up a machine and produce something off the lines,” said Liz Salerno, chief economist for the American Wind Energy Association. “You need a constant flow of orders to keep that facility up and operating, to keep people employed.”

The wind industry — which currently supports an estimated 75,000 jobs, many of them in Midwestern states that typically vote Republican — has long endured sporadic lapses of the federal credit, spurring boom-and-bust cycles within the industry, but in recent years federal subsidies have been extended with enough lead time for investors to plan ahead.

windcaplarge

A chart provided by the U.S. Energy Information Administration details ups and downs of the industry since the PTC was first enacted in 1992.

A proposal for a one-year extension of the tax credit has already passed in the Senate. The House will vote on a version of the measure, most likely as part of fiscal cliff negotiations, next month.

“We’ve had enough of a window of certainty or stability where we now have a vast manufacturing sector in this country that has been built over the past five or seven years,” Salerno said. “Now we’ve made a huge investment. We’ve scaled up manufacturing and achieved cost reductions and efficiencies and all the things that happen with a scale up, but because of the uncertainty, these folks who made the investment are unfortunately faced with having to make really hard decisions about shutting down and laying people off.”

Mexican court enters preliminary $2.7 billion judgment against Yahoo

SAN FRANCISCO (Reuters) – A civil court in Mexico entered a preliminary $2.7 billion judgment against Yahoo Inc for breach of contract involving a yellow pages listings service, Yahoo said on Friday.

Supreme Court to rule on patentability of human genes

The Supreme Court announced on Friday that it will consider a legal challenge to a patent on a breast cancer gene held by the firm Myriad Genetics. The case could have broad implications for the future of medical diagnostic techniques.

In March, the Supreme Court ordered an appeals court to reconsider a 2011 decision holding that genetic material could be patented once it has been “isolated” from the human body. At the time, the Supreme Court had just rejected patents on medical diagnostic techniques, and the high court wanted the United States Court of Appeals for the Federal Circuit to re-consider its previous ruling in light of this new precedent.

In August, the Federal Circuit, which is responsible for hearing all patent law appeals, decided to stick with its previous ruling. It once again concluded that DNA sequences could be patented once they had been isolated from the human body. Now the Supreme Court will have a chance to check the Federal Circuit’s work.

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For-Profit College Joins Division I Athletic Conference

Grand Canyon University announced this week the school is joining the Western Athletic Conference, making it the first for-profit college to join a Division I NCAA conference, the top level of college sports.

For-profit colleges have been nothing short of controversial over the past few years, as their industry — and Phoenix-based Grand Canyon — has been at the center of investigations by the U.S. Senate and the Government Accountability Office. Nevertheless, GCU will become the first school in Division I athletics that fans can buy stock in.

In an interview with The Huffington Post prior to the official announcement, Brian Mueller, Grand Canyon’s CEO and Director, said the school had been actively working for some time to be added to one of a couple Division I conferences.

“It’s just one of the things that we think would lift the profile of Grand Canyon,” Mueller said.

The WAC has been struggling. The conference has lost realignment battles, which continued this year, and pushed out longtime commissioner Karl Benson in February.

In a statement welcoming Grand Canyon to the conference, WAC Interim Commissioner Jeff Hurd said, “This is another important step in the rebuilding process of the WAC as we continue to strengthen the conference.”

Grand Canyon, a Christian school, was recently in the news for turning down a free campus in Massachusetts offered by one of the owners of the retail chain Hobby Lobby. Mueller told HuffPost the school turned down the Bay State campus partly due to its being “too remote” from Phoenix headquarters, but also because Grand Canyon isn’t actively looking to expand beyond its current location.

“We’re really focusing on Arizona and in the Southwest,” Mueller told HuffPost. The school has invested $200 million into its Phoenix campus in the past couple years, Mueller said, and the coming athletics expansion is just part of its focus on building the brick-and-mortar school.

GCU’s stock — on the NASDAQ under LOPE, after its Antelope mascot — has risen $2 since news broke of the school’s addition to the WAC. But not everyone is as excited as GCU’s stockholders.

“I find it alarming that an institution with questionable academic practices is sort of ingratiating itself into the mainstream of American athletics,” Barmak Nassirian, an independent consultant on higher education policy, told the New York Times.

Tom Ley at the sports blog Deadspin said the WAC likely added Grand Canyon out of “desperation”:

Here we have the NCAA arriving at its logical endgame. After countless, useless investigations into the purity of its scholar-athletes, it’s opening the door to a chop shop where even the scholar-scholars come with bogus transcripts. GCU is a shameless, unsavory, straight-up business proposition—the ‘Lopes and the NCAA were made for each other.

Whatever their feelings on Division I athletics, Mueller insisted Grand Canyon’s students aren’t aware of the controversy surrounding for-profit colleges. “Most of our students don’t know and they [couldn’t] care less,” he said.

Level capping truly, unapologetically sucks

Level capping sucks. The reason is simple: level caps break a game’s motivation equation.

Games that allow you to gain new levels for your character by defeating enemies or accomplishing tasks create a carefully balanced risk/reward environment that effectively trains you to seek out the situations with the most potential for beneficial character development. Those rewards could be special weapons, decorative (i.e. not functional) items, or most importantly, experience points. Experience points (and the increased character levels they eventually bring) are central to practically every role-playing game and, increasingly, other genres that throw them in as a “role-playing element.” They’re the most important reward to be gained in these games because they determine the strength of a character and what kind of weapons and capabilities that character can have.

In a game like Borderlands 2, leveling up doesn’t just make you a bit stronger or give you a few more hit points. It’s not just incremental improvement. Rather, it allows you to unlock new capabilities for your character, such as the ability to stab enemies while cloaked, flipping off foes with a single-finger salute, or sending in a giant robot that shoots lasers from its eyes to wipe out the bad guys for you. New strategies and tactics are opened up by increasing your level.

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SNC-Lavalin fraud charges a ‘wake-up call’ for stakeholders in public-private partnerships

The massive scale of public-private partnerships — which can cost hundreds of millions of dollars — make the projects more of a magnet for greed, experts say in the wake of a corruption scandal involving construction giant SNC-Lavalin Inc.

On Wednesday morning, investigators arrived at the home of former CEO Pierre Duhaime and charged him with fraud in relation to a $1.3-billion contract to build and maintain the McGill University Health Centre’s new hospital, one of Quebec’s highest-profile public-private partnerships (P3).

This is public money but it’s also public confidence — and corruption takes many forms

The allegations against Mr. Duhaime and another former SNC executive have shaken the financial community and raised questions about the P3 process, which business leaders and others have fought hard over the years to implement. At the beginning of this week, 1,500 people from around the world met at a downtown Toronto hotel to discuss the opportunities provided by public-private partnerships. Federal Finance Minister Jim Flaherty, Alberta Premier Alison Redford, and Ontario Premier Dalton McGuinty stood before packed ballrooms and extolled the benefits of building infrastructure through private and public funding.

With cash-strapped governments looking to turn more to the private sector, P3 experts say that the charges are a “wake-up call” — not just for P3s but for the entire construction industry.

“It’s so important that we’re vigilant here,” said Matti Siemiatycki who teaches in the department of geography and planning at the University of Toronto. “This is public money but it’s also public confidence — and corruption takes many forms. It can be overinflating the price of the contracts. Another type of corruption is doing shoddy work and that is almost more frightening because we all drive on the roads and use the hospitals.

My sense, given the construction inquiry, this is one piece of a broader story

“But I wonder: Is this a P3 story or is this an infrastructure story? My sense, given the construction inquiry, this is one piece of a broader story.”

The ongoing Charbonneau Commission inquiry has shed light on collusion schemes that inflated the cost of Quebec projects to benefit the Mafia, certain political parties, construction companies and city officials. In October, Lino Zambito testified before the commission that he helped rig dozens of public works contracts — mainly in Montreal — before his company went bankrupt in 2010. P3s, he said, are fertile ground for corruption and collusion.

Perhaps it’s the hefty price tags attached to P3 projects, which are often worth hundreds of millions of dollars, that make them appealing targets, one professor said. Across Canada, there are 180 P3 projects worth more than $58-billion.

“Since P3 contracts typically lump together designing, building, financing, maintaining, sometimes operating the facility, they tend to be honking big numbers because you’re packaging so much together. To the extent that crooks are attracted to the really big-ticket items, it makes it that much more attractive as a target for misbehavior,” said Thomas Ross, director of the Phelps Centre for the Study of Government and Business at the University of British Columbia. “That’s not saying it’s P3, it’s the size.”

But there are measures that place P3s in a better position to protect against corruption.

“Because there has been a lot of suspicion about P3s when we first started to do them, there was a big push for transparency,” Prof. Ross said. “Because taxpayers were nervous and public sector unions were opposed to P3s, that kind of forced governments to up their game. I’m told now traditional procurement is much more open and transparent, because it’s following the improvements made on the P3 side.”

Companies bidding on a project want transparency as well, since they will spend millions on a proposal. “The evaluation criteria are set up so the proponents should almost be able to self-score,” Sarah Clark, CEO of Partnerships B.C., said.

The standard P3 procurement process in most cases involves an independent fairness monitor to oversee the selection phase.

In addition, Partnerships B.C., for example, uses various committees — a relationship review committee and a due diligence committee — to further scrutinize the bidders.

“It’s an arduous process,” said Roger Bridges, president of Knowles Consultancy Services Inc., which has acted as a fairness monitor on 180 projects in Canada including about 30 Alternative Financing and Procurements (Ontario’s P3 model). “This is done by private finance and they want complete faith in the process. If they don’t have faith in the process, they won’t put forward their investment dollars and the government body will not get what they want. So there has to be trust in the system.”

P3 deals, versus traditional deals, operate like a lease rather than purchasing with cash up front; but the price you agree to at the outset, is that you pay — and no more. This curbs unforeseen ballooning costs.

“You end up with a fixed price contract so any additional costs that might be incurred either because of delays in the design or delays in construction, that risk has all been transferred to the private sector,” said Mark Romoff, president and CEO of the Canadian Council for Public-Private Partnerships.

“The private sector has to continually maintain the facility, so if they decide to skimp on the input, then the road won’t hold up five years down and they’re forced to repair it because they have an obligation. There are all of these elements of a P3 which ensure that the risk is assumed by the private sector and if they don’t meet their obligations, they’re penalized. That’s the charm of this.”

Porn trolling case thrown out for "attempted fraud on the court"

Porn trolling has never been a glamorous business. But as judges, bar associations, and others have gotten wind of just how sleazy the porn-trolling business model is, trolling law firms have faced more and more obstacles. One trolling firm hit a new low on Tuesday, when an exasperated federal judge in Tampa, FL, threw out its copyright infringement case.

In a surreal court session, Judge Mary Scriven grilled several individuals with ties to Prenda Law, a law firm that specializes in copyright trolling, and its alleged client, a porn company called Sunlust Pictures. (We say “alleged” because Prenda now claims, unconvincingly, that it was never involved in the case.) It quickly became obvious that no one in the courtroom had any significant ties to the supposed plaintiffs, or even knowledge of who they were. So Judge Scriven dismissed the case for, among other things, “attempted fraud on the Court” for sending a “representative” to court who knew next to nothing about the company he was representing.

State of confusion

In an exposé published earlier this year, the blog Fight Copyright Trolls details how Illinois attorney John Steele opened a branch of his law practice in Miami despite not being licensed to practice law in Florida. A Florida attorney who specializes in representing defendants in troll cases, Graham Syfert, thought Steele’s operation seemed fishy and asked the Florida Bar to investigate. The bar got Steele to sign an affidavit promising not to practice law in Florida.

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