By John McClaughry
Here’s a tale of two savvy young men from Vermont who hit the jackpot by selling their startup company to a larger one for $40 million.
Let’s turn the clock back to 2009. The two now rich men were Board President and Clean Energy Program Director at the Vermont Public Interest Research Group. VPIRG was then, and is still, a nonprofit organization with a budget in excess of $1 million a year, promoting a wide range of liberal causes and coalitions. (Its budget in 2020 was $1.954 million).
A major part of VPIRG’s program (51% in 2019) was its advocacy for “incentives for clean energy developers.” It was out front in the campaign to rid Vermont of the 600 MW Vermont Yankee Nuclear Plant, which after years of state extortion and legal battles (which it largely won) closed down in 2014. Yankee nuclear was “clean energy,” just not developed by VPIRG contributors. Ironically the major factor in its closing was electricity produced more cheaply from fracked natural gas, which VPIRG outspokenly opposed.
Among the long list of energy policies urged by VPIRG was putting $30 million into the Clean Energy Development Fund, to finance homestead solar power systems financed by, among others, David Blittersdorf, whose personal foundation has long been a major contributor to VPIRG.
VPIRG also pushed for tax benefits for “community development of solar power generation,” the “feed in tariff” law that required utilities to purchase renewable power at up to four times the market price; the Renewable Portfolio Standard that requires utilities to buy state-mandated quotas of wind and solar electricity, and the net metering law of 2011 (which allowed Blittersdorf’s customers to sell their power to utilities at a retail rate, leaving other customers to absorb the poles and wires cost of the power grid).
VPIRG also took credit for killing legislation aimed at “blocking renewable energy development.” Beginning in 2015, VPIRG was in the forefront of a campaign to impose carbon taxes on gasoline, diesel, heating fuel, and propane, which happily failed despite the efforts of as many as 23 VPIRG lobbyists working the legislature on its behalf.
In 2019 VPIRG supported a “Climate Strike” that marshalled gullible teenagers to lie down in the streets to block traffic in the name of overcoming the looming climate crisis. The following year VPIRG went all out to pass the Global Warming Solutions Act, setting tough mandatory requirements for reducing carbon dioxide emissions. It also created a pseudo-state government Climate Council to instruct the executive branch to issue far-reaching new regulations to bar fossil fuels for transportation, electricity, and business, school, church, hospital and home heating.
Gov. Scott vetoed the bill, but the legislature overrode his veto. The council is hard at work organizing all of VPIRG’s climate and energy mandates into a breathtakingly extensive and costly action plan to be announced on December 1.
The 2010 election brought into office Gov. Peter Shumlin – previously known as the “Senator from VPIRG”. He was an enthusiastic climate alarmist who warned us of “an unspeakably horrid future” for our grandchildren if we failed to make enormous sacrifices to battle the menace of climate change now. It was clear that with Shumlin leading a Democratic legislature many if not all of VPIRG’s climate program would become law.
So, in 2012 VPIRG Board President Duane Peterson and its Clean Energy Program director James Moore departed those positions and launched a startup called SunCommon. Its business plan was to market and install renewable energy (i.e. solar) systems to commercial, industrial, and residential customers. Its revenues grew to $33.1 million (2020). Its acquisition by Williston-based iSun promises significant synergies in marketing and installing solar power msystems throughout northeastern US.
This is the way capitalism is supposed to work. Two energetic and capable people envision a company that, given our state’s energy policies, should if aggressively promoted earn a good profit for their investors.
But there’s this troubling reservation. Could SunCommon have succeeded if Vermont’s energy and climate policies were what they were in 2009? Clearly not.
So, Peterson’s and Moore’s VPIRG coworkers raised $20 million (2009-2020) and devoted maybe half of that to persuading politicians and legislators to rig a bunch of special deals to create a hot market for a company like SunCommon to make money.. As soon as they saw that coming, Peterson and Moore created SunCommon to cash in. (Peterson remained on the VPIRG Board until 2018.)
There’s nothing wrong with a company created to take advantage of business opportunities made possible by political decisions. It’s somewhat less creditable when the owners of the company cash in on what they and their coworkers spent millions of dollars to put in place for a decade before their big payday.
Eighty years ago, some people criticized Henry Kaiser and Henry Ford for being “war profiteers.” Yes, they made a profit selling ships and tanks to their government to win a war. But neither of them conducted a campaign to persuade Japan to bomb Pearl Harbor.
John McClaughry is vice president of the Ethan Allen Institute.
John examines the on goings under the Golden Dome and finds the foxes are in the proverbial hen house, also known as lobbyists in action…….Again.
The most disturbing issue here isn’t capitalism per se as charged by a commenter, it is the undo influence of the renewable energy industry and it’s activists lobbyists over our elected representatives. Looking back to the Shumlin administration and an accommodating legislature we find the renewable energy industry with near absolute control in pushing its agenda forward…..Hardly a word from the Legislature challenging the renewable energy industry agenda. It is this dynamic that has allowed the founders of SunCommon to become multi-millionaires…….Where’s Bernie on these greedy millionaires?
And the irony of all this is the left’s historic outrage at the influence of business lobbyists.
Thank you John for this reminder of the self-dealing that has occurred in Vermont. There is commonality here with what occurred in Maine. As Governor in 1999, Angus King instituted the country’s first “Renewable Portfolio Standard”, which required utilities to buy wind energy. Soon after he left office, he became a wind developer. His successor, Governor John Baldacci, created a “Governor’s Task Force on Wind Power”, made up of his appointees, which he instructed to create a law that essentially greased the skids for wind power by streamlining the permitting process. After Baldacci left office he became Vice Chairman of Avandgrid, the wind power arm of Iberdrola, the company that owns Maine’s largest public utitlity. His chief legal counsel and chairman of the Maine Public Utitlity Commission, Kurt Adams, while still working in that capacity, signed an employment agreement with First Wind, one of Maine’s early wind developers. This agreement provided him with stock options, which vested when left public service and went to work for First Wind. As PUC chair Adams advocated successfully for land use regulations which gave special treatment to wind power projects.
The vilification of Capaitalism always relys on a lack of understanding regarding how Capitalism and the free-market system works. Government involment in the free market almost always causes an imbalance, whether it’s student loans, the minimum wage, or renewable energy subsidies. The problem here is that our new millionaires played both sides of the equation: working to unbalance the market for solar powered infrastructure and then entering the market to profit from the imbalance they created. This is not Capitalism, it is an illustration of how the natural balance of the free market is distorted by government involment, and how the door is open for corrupt behavior.
Capitalism is built on the Hegelian principle of problem: solution.
You’ve elucidated this principle in action in Vermont.
You use the correct terminology of ‘profiteers’ – putting profit ahead of humanity, as always.
When you capitalists realize that capitalism IS what is destroying the planet…money talks, always (pay to play)…then we can have an honest discussion.
This just slings mud amongst players in the sandbox.
Those of us outside the sand box realize that the real story with the planet is so different from what we are being told/lied to about, and are actually doing what really counts to save the planet: disengaging from capitalism and creating a counter economy that puts human life first, last, and hindmost.
Capitalism actively destroys life.
It kills syntropy.
When we talk about THAT elephant in the room…then we can have an honest discussion.
Until then, this is just one capitalist slinging mud at another capitalist (entity) over the pickings, their share of the pie.
Capitalism does not equate to corruption. You need an education. I would suggest Basic Economics by Thomas Sowell.
This (Allison’s characterization) is, unfortunately, a typical conflation of what ‘Capitalism’ and ‘profiteering’ actually are.
There are two distinct forms of ‘Capitalism’. First, there is ‘Free Market Capitalism’. And then there is, what is commonly referred to as, ‘Crony Capitalism’ – the latter being a euphemism for Fascism.
Profiteering, ‘the act or activity of making an unreasonable profit on the sale of essential goods [and services] especially during times of emergency’, can occur in both circumstances. But Free Markets almost immediately self-correct for unreasonable profits. Profits that are legislated by elected or appointed oligarchies, on the other hand, are the epitome of cronyism (i.e. fascism), and can’t be corrected by free market conditions.
Unfortunately, it seems, the headline of this article is misleading in this regard for not differentiating between the two forms of Capitalism.
As Mr. McClaughry points out, had SunCommon come to fruition in a true free market, a market free of arbitrary government subsidies, it likely would not have been successful. But that Peterson and Moore participated in the political creation of those arbitrary subsidies, and then ‘profiteered’ by them, is ‘despicable’ (again, a euphemism to be sure). It is ‘Crony Capitalism’ at its worst… not to be confused with ‘Free Market Capitalism’.
And ‘Crony Capitalism’ is, unfortunately, becoming more and more wide-spread, I suspect, because most people don’t understand the difference.
An outstanding explanation of what we are facing in Vermont. Crony capitalism is also sustained by Big Government Socialism here in the Green Mountains.
Thank you John for shining a wide lens on the shady side of the prog/gov/solar bedfellows. Liberals just love capitalism so long as the few rich can use it for their benefit at the expense of the regular, hard working folks.
TYPICAL
An eye opener, for sure.
Now let’s wait for legislation to allow for pocket nuclear plants around the state.