Capitols and capital

"Capitols and capital" Continued...

Solar panel manufacturer Twin Creeks Technologies was the first green energy company to receive a Mississippi stimulus. In April 2010, the California-based company announced its intent to set up its first commercial-scale plant in the state and received a $50 million loan award. Twin Creeks held its grand opening in May of this year, but it still isn't manufacturing a commercial product. The company has promised to create 500 jobs over the next five years, and 180 by the end of 2011, but in June it reported having 15 employees. On Oct. 3 it listed two job openings on its website.

Twin Creeks' new 88,000-square-foot factory, funded with $22 million in state dollars, sits in Senatobia. No sign or logo identifies the plant. Twin Creeks spokesperson Tarpan Dixit says the plant is not in commercial production but in "validation mode" and waiting for certification-but that's not the message conveyed by state officials. At Twin Creeks' grand opening in May, Barbour said he was "delighted to celebrate the start of production" at the factory. In September Kathy Gelston, chief financial officer of the Mississippi Development Authority-the state's economic development agency-said the factory was producing "sellable panels."

Tate County Economic Development Foundation director J.E. Mortimer recently toured the factory and saw the equipment: "We are still looking for really good things from this company. ... Solyndra is nothing at all like Twin Creeks." Gelston has said the green energy companies can only use the loans for building and equipment, so taxpayers have collateral if any of the companies collapse. But she admits that the Authority hasn't assessed the forced liquidation value of the assets, should a fire sale become necessary.

Some involved in the Twin Creeks deal have political connections. W.G. Yates & Sons Construction of Philadelphia, Miss., built part of the Twin Creeks plant. Executives and family members from W.G. Yates' parent, The Yates Companies, gave $25,000 to Barbour's federal PAC in August 2010. The Yates Companies also donated this year $10,000 of in-kind air travel to Haley's PAC, a Barbour fundraising arm in Georgia. Several partners at one Twin Creeks backer, DAG Ventures, are Republican donors. Firm co-founder John Duff Jr. gave more than $100,000 to the Republican National Committee, and then started giving to the Democratic National Committee.

Yates spokesman Kenny Smith said, "The Yates family did give money to the governor's Georgia PAC because they were optimistic that he was going to run for president and they were supporting him in that effort. It had absolutely nothing to do with the work at Twin Creeks."

It's hard to know about funding of the five other companies: Secretive hedge funds back some of the companies, hampering transparency. One venture capital firm, Khosla Ventures, funds four of the six green companies that received loans from the state. Artis Capital Management, a hedge fund with ties to Khosla, backs two of the companies. Artis (also a backer of Solyndra) is an intensely secretive $1 billion hedge fund. Its website is password-protected, and its investors are unlisted. Public filings with the SEC only reveal the company's president and counsel, and neither appears to have ties to the Barbour administration. Last year Artis partner David Lamond gave a paltry $500 to Haley's PAC in Georgia.

Barbour has also promoted an experimental $2.4 billion clean coal plant owned by Mississippi Power Company (MPCo.), which is part of Southern Company. When the plant comes on line, rates for poultry farmers will increase by more than 30 percent, and other customers also anticipate increases. (In the public electric utility model prevalent in southeastern states, power companies are regulated monopolies required to provide customers with the cheapest electricity available, but they are also private companies: Captive customers must pay for any improvements approved by state regulators.)

The new plant idea has much to commend it: The plan is for the plant to mine on-site, low-grade lignite coal, insulating customers from market volatility in fuel costs. It is likely to be the first commercial-scale power plant in the nation to capture its carbon dioxide emissions. MPCo. argued for the plant's economic benefit by comparing it to the alternative: a plant with much lower construction costs that would run on natural gas, a fuel that has historically been subject to significant market cost spikes.

Barbour said the new plant would be a "home run for Mississippi," but his backing for the project raised some eyebrows: Southern Company since 1999 has spent more than $2 million with BGR Group (formerly Barbour, Griffith & Rogers), according to federal lobbying disclosure documents. Barbour helped found BGR and, according to a blind trust document filed with the Mississippi Ethics Commission, owns shares and has a profit-sharing plan with the firm. (Barbour's blind trust is supposed to insulate him from conflicts of interest: Assets are placed into a trust at the time of inauguration and kept by a trustee away from the official's eye.)


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