Powering the Dream_ The History and Promise of Green Technology - Alexis Madrigal [67]
But that was not to be. In 1989 Congress extended the solar tax credit for 1990 by just nine months instead of a year. The crazy deadline Luz had just been hitting had suddenly been moved up three months. In racing to finish the plant, they incurred $30 million of cost overruns after previous plants had come in on budget. At the same time, the Republican governor of California, George Deukmejian, vetoed a property tax break in the waning days of his administration that Luz had received up until that point. Nevermind that Luz’s eighty-megawatt plant would pay four times the property tax of a comparably sized natural gas plant, Deukmejian wasn’t about to give a tax break to a solar company.
The company was seriously hurting as they staggered into 1991, but they had some hope, at least in California. A Republican, Pete Wilson, had been elected governor and he knew Luz well, having helped secure the investment tax credits that made their projects financeable. So Luz kept building its tenth solar power plant, despite its precarious situation and the lack of the property tax exemption. “We had 2,500 people working in California. Wilson didn’t see any reason the legislation shouldn’t go through, so we decided to keep the project going,” Goldman recalled. “He said he’d try to get it going on the fast line, which meant it’d be through by March. If we got it passed, we could get the project funded.”
Luz would live another life.
A CRIME OF NEGLECT
In the spring of that year, with the fate of Luz in the balance, the bill came before the State Assembly and Senate. It had broad support, having passed the year before with 90 percent of the Assembly voting for it. The passage of the legislation seemed assured.
But while Luz’s pleas felt righteous from the inside, outside observers were less kind about the tax break Luz was trying to hand itself. In 1991, as the property tax provision came before the California government, the state faced a projected budget shortfall of more than $14 billion.61 Though the projected cost to the government was fairly small, something on the order of a few million dollars per year, Luz’s lobbying methods drew attention from the reporters paid to watch the state capitol building.
At a hearing about the bill, Tom Bane, a Democrat with strong ties to Willie Brown, then speaker of the state house and a politician who did not have the most ethical reputation, showed up to support Luz. His plea, as recorded in the Sacramento Bee, was not exactly the sort of endorsement a company wants splashed in the metro news section.
“I know a lot of the people who have invested in this company,” said Bane during the hearing. “If this project goes down, they’re going to get nothing.”62
The Bee further characterized the bill as “among the most heavily lobbied bills of the year so far, with squads of lobbyists and public relations experts scurrying around the Capitol on its behalf.”63 The Israeli government was lobbying on behalf of Luz. Willie Brown’s folks were lobbying on behalf of Luz. The Sierra Club was lobbying on behalf of Luz.64 Everybody, it seemed, thought the property tax break should pass. And that smelled fishy to Sacramento Bee journalists. Dan Walters, who is still with the Sacramento paper, recalled,
I think the attention was sparked mostly by the fact that it was a one-company tax break of serious proportions while the state was experiencing a budget crisis that was, proportionately, worse than the one it now faces and that it was getting an extraordinary push from liberal Democrats who ordinarily opposed such corporate tax breaks as they bemoaned cuts in health, social services and education spending.65
Solar or not, “soft” energy or not, Luz was playing hardball