Federal green energy lab in Colorado handing fat paychecks to managers

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Photo - Managers of the tax-funded National Renewable Energy Laboratory in Golden, CO, are being paid salaries approaching $1 million annually, but critics question whether taxpayers get a credible return on the investment. (NREL Photo)
Managers of the tax-funded National Renewable Energy Laboratory in Golden, CO, are being paid salaries approaching $1 million annually, but critics question whether taxpayers get a credible return on the investment. (NREL Photo)
News,Watchdog

GOLDEN, Colo. - Washington's dream of a renewable energy empire hinges on a scrubby outpost here, where scientists and executives doggedly explore a new frontier.

If you live outside Colorado, you probably haven't heard of the National Renewable Energy Laboratory - NREL for short. It's the place where solar panels, windmills and corn are deemed the energy source of the future and companies who support such endeavors are courted.

It's also the place where highly paid staff decide how to spend hundreds of millions in taxpayer dollars.

But what is really going on there? Energy expert Amy Oliver Cooke drove out to the site, which looks something like Nevada's Area 51 with its remote location and forbidding concrete buildings.

NREL had started a construction project and Cooke wanted to see for herself. She didn't get far: a man in an SUV seemingly appeared out of nowhere, stopped her car, and told her to leave.

"A beefy looking fellow told me, 'It's top secret,' said Cooke, director of the Energy Policy Center at the Independence Institute think tank. "I said, 'I'm a taxpayer and I want to see what you're building' and he said it was it was 'top secret so we can bring Americans a better future.'"

With its bloated budget and overseen by a $533 million a year government-funded management company, Cooke isn't buying it.

"NREL has given us two of the most significant boondoggles, one of them being ethanol and the other being (bankrupt) Abound Solar," she said. "They were part of the team that pushed Abound Solar along. In fact, they wrote in March 2011 on their website how proud they were of their role in Abound Solar.

"Am I impressed with NREL? No, not really," she said.

NREL's taxpayer-funded management company has seen its budget more than double since 2006. That's when one of its most ardent supporters, Rep. Ed Perlmutter D-Lakewood, was first elected to Congress. The lab sits in the middle of his district.

But Perlmutter's ties go beyond merely promoting green legislation and lobbying his colleagues for NREL funds. He has received $12,670 in campaign contributions from executives of NREL and its management company, MRIGlobal, a company that describes itself as "an independent, not-for-profit organization that performs contract research for government and industry."

Perlmuter's father has served as a trustee for MRI and MRIGlobal during the past decade. Between 2003 and 2005, Perlmutter was also a trustee. These positions were unpaid. Perlmutter did not respond to phone calls seeking comment for this story.

Funded by the U.S. Department of Energy, NREL started in 1977 as the Solar Energy Research Institute, part of President Jimmy Carter's response to the 1973 Mideast oil crisis. Its budget, then about $100 million, was slashed during the Reagan era.

By the time Perlmutter was elected, NREL's budget was $209.6 million. It increased steadily before ballooning to $536.5, a beneficiary of President Obama's stimulus plan and a $135 million contract spread out over five years to construct a new science center. Its current $352 million budget is down slightly from last year's $388.6 million.

From its inception, NREL has been managed by MRIGlobal, back then called the Midwest Research Institute.

To handle lab management, MRIGlobal partnered with Ohio-based Battelle Memorial Institute, which describes itself as "the world's largest nonprofit research and development organization."

The pair formed Alliance for Sustainable Energy, a separate non-profit in 2008, for the sole purpose of managing NREL and installed NREL's top executives as its directors.

Despite record federal debt, municipal bankruptcies and a nagging global recession, those executives enjoy pay packages that are out of reach of most Americans who pay their salaries. MRIGlobal and Alliance tax documents obtained by Watchdog show most earned well into six-figures:

• Dan Arvizu, Alliance president and NREL director

2010: $928,069

2009: $691,570

2008: $652,159

• Bobi Garrett, NREL senior vice president of Outreach, Planning and Analysis

2010: $524,226.

2009: $398,022

• William Glover, NREL deputy lab director and CEO (retired)

2010: $557,571

2009: $407,361

2008: $315,465

• Catherine Porto, NREL senior vice president

2010: $406,339

2009: $223,553

The budget to manage Alliance is steadily rising. For 2010, tax documents showed, Alliance received $532.9 million from the Department of Energy, $189 million more than they were paid in 2008.

In 2010, MRIGlobal's tax return showed DOE funding of $104.8 million, while Battelle's tax return reported $4.55 billion in government grants. Its activities included management of five national laboratories (including NREL) and operating as subcontractor at a sixth.

However, at least one expert who has studied NREL doesn't see any problem with the fact that the agency is overseen by a management company.

"I have no problems with the contractors operating the lab. They would do a much more efficient job than the government," said Nick Loris, an energy policy analyst with the Heritage Foundation. "It should lower the cost of these projects."

But what Loris doesn't like is the entire concept of placing the government in a role of making energy affordable. That should be a job for the private sector.

"It's not the government's role to make energy cheaper. There is no reason the taxpayer should subsidize this," he said. "We've seen the failures when the government gets involved in these projects. If they are going to be successful in the marketplace, they wouldn't need help from the government"

Despite its bloated stimulus funding, there are signs of financial trouble at NREL. The company offered to buy out 100 jobs when its budget dropped between 2011 and 2012.

Perlmutter spokeswoman Leslie Oliver expressed concern about the buyouts, calling NREL the nation's green energy "crown jewel" and a driving economic force, the Denver Post reported.

"What about next year?" Oliver said. "Where does this stop?"

On his website, Perlmutter blamed Republicans for the cuts and claimed NREL generates 5,500 jobs. Its direct workforce is listed at 1,700.

Tori Richards and Earl Glynn are reporters with Colorado Watchdog. Richards can be reached at tori@coloradowatchdog.org and Glynn at earl.glynn@franklincenterhq.org.

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