The Luck of the Draw

In a recent editorial, Senator Kevin Meyer touted the importance of the recently constructed and to be constructed energy projects around Alaska. He stated that there are 66 projects in the pre-construction phase and 58 projects under construction or completed. That’s 124 projects supported by legislators from around the state, 124 projects where legislators brought home the bacon, 124 projects that helped legislators get reelected. Regarding those projects, Senator Meyer suggests that it is “important to monitor the state’s investment. The legislature must remain vigilant, as granting money without strong oversight, review or audit can sometimes be more harmful than investing none at all.”


The problem is that the legislature failed to use the same vigilance, review and analysis when approving the projects. Projects were placed on the Legislature’s renewal energy project wish list with little or no analysis of the future viability of those projects. Most were merely ideas without any analysis of the long term viability of the project after it gets built. Most were not even required to submit a business plan that could show the long-term economic viability of the project.

The result will be that most of the approved projects will fail from an economic standpoint no matter how much vigilance the legislature puts forth. You can’t make a poor project successful merely by auditing it to death. You will, at least, be able to record your own failure in approving the project in the first place. The old adage “fail to plan and plan to fail” will once again raise its ugly head.

As with any appropriation, there is some value in the approved projects. Some projects actually put forth viable business plans and would have been approved on their own merit if the legislature had done the analysis they should have done before approving the projects. The projects will probably succeed because they can prove, at least on paper, that they will be successful and economically viable in the long-term if built. For those projects, I congratulate them for their diligence, their preparation, their analysis, and their willingness to do what it takes to ensure the successful viability of their project. For the rest of the projects that were approved without the proper preparation, without the proper analysis, without a business plan, good luck. Perhaps another old saying “by the luck of the draw” will be your story. Perhaps you will be successful inspite of your own poor efforts.

And to the legislators that approved the 124 projects without the proper analysis, if you approve any more renewable energy projects, at least make sure they have submitted a viable business plan. Even an optimistic business plan, which it inevitably will be, is better than none at all.

My prediction is that 10 percent of the approved projects will clearly succeed, 50 percent will fail, and 40 percent will be hoping for “the luck of the draw.”