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Hatch's Solyndra: Government picks another loser

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Utah Sen. Orrin Hatch did so many favors for Raser Technologies, a green technology company in his state, that the company named its geothermal power plant "The Hatch Plant." His role turned out eerily reminiscent of President Obama's support for the failed solar-panel maker Solyndra. The Hatch Plant is now shuttered, and Raser Technologies has gone bankrupt.

Hatch's Solyndra hurts Republicans in general because it highlights the hypocrisy of GOP attacks on Obama's "picking winners and losers" and "crony capitalism." But Raser's collapse also hurts Hatch specifically as he faces a primary challenge from conservative Dan Liljenquist, a former state senator.

Here's the time line of the Hatch-Raser relationship:

In 2004, Hatch met for the first time with Raser officials, who "asked him to back tax incentives for hybrid vehicles," according to a USA Today report. Hatch then lobbied Bush's Energy Department on Raser's behalf.

The next year, Hatch proposed the CLEAR Act, providing new tax credits for hybrid and alternative-fuel cars. Hatch would later note that "Raser, a world leader in efficient A/C induction electric motors, has been a strong supporter of the CLEAR Act."

Hatch also paved the way in 2005 for Raser to get a tax credit for its power plant. Hatch was the sole sponsor of a bill to extend an alternative-energy tax credit from five years to 10 years for geothermal plants. Hatch called this bill "my proposal to improve the treatment of geothermal power plants."

He successfully inserted both his CLEAR Act and his geothermal provision -- both of which benefitted Raser -- into the 2005 energy bill.

After that, Hatch started trying to send earmarks Raser's way. USA Today reported that Hatch "requested seven earmarks for more than $20 million from 2006 to 2008 to help fund research and development projects for the automotive wing of the company." None of these earmarks was passed into law.

In May 2008, Raser began building its first power plant, which would use the heat buried deep within the Earth to create steam to spin turbines -- so-called geothermal energy. Hatch was present at the groundbreaking, shovel in hand.

"If we are interested in slowing carbon emissions significantly," Hatch declared at the groundbreaking, "we must increase our green sources of base power. Today, Raser Technologies is doing just that."

At the groundbreaking, Hatch also announced a new proposal to help Raser. "Raser has also been supportive of my recent legislation S. 1617, or the Freedom Act," Hatch explained, noting that the bill would create "strong tax incentives for plug-in electric and plug-in hybrid vehicles and for the U.S. manufacture of these vehicles and their technology."

If that has a whiff of Obamanomics, it's no wonder -- Sen. Barack Obama was Hatch's original co-sponsor on the Freedom Act.

Raser was already in bad financial shape when the Hatch Plant opened in 2008 ("Raser Technologies: All Talk, No Profits" was the headline at one investment website at the time). The plant struggled, unable to extract enough heat from the ground to produce the power it had promised.

Obama's stimulus kept Raser afloat for a while. In February 2010, the Treasury Department awarded Raser a $33 million grant to pay off some debt on the Hatch Plant. It wasn't enough. In April 2011, Raser filed for bankruptcy, and the Hatch Plant is now shuttered.

The Hatch-Raser story has clear parallels to the Obama-Solyndra story, and even has Obama fingerprints on it twice. Given the GOP focus on Solyndra as a symptom of Obama's flawed business-government entanglement, Raser puts Hatch in an uncomfortable place. How can he attack Obama for Solyndra -- as he has -- given his own record of trying to subsidize a green energy firm that has gone bankrupt?

"He supported Raser," Hatch spokesman Matt Harakal told me, "because they were a Utah company, not because of any specific focus on renewable energy. ... His focus is getting Utah companies out in front of the world."

So is parochialism a better excuse than environmentalism for government meddling in the economy? Will Republican primary voters in Utah, who threw out prodigious porker Bob Bennett in 2010 in favor of Tea Party Conservative Mike Lee, buy this distinction?

I asked Senator Lee this week about Hatch's subsidies for Raser. Lee didn't explicitly talk about Raser or Hatch, but he said, "I'm uncomfortable with government saying who's going to succeed and who's going to fail. That's kind of what we do when we hand out earmarks to one business over another. And it doesn't end well."

The Hatch-Raser relationship didn't end well for Raser or for taxpayers. How will it end for Hatch?

Timothy P.Carney, The Examiner's senior political columnist, can be contacted at tcarney@washingtonexaminer.com. His column appears Monday and Thursday, and his stories and blog posts appear on WashingtonExaminer.com.

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