Capstone Turbine's Rebates: Good News but What's California Thinking?

CPST: Capstone Turbine's California customer base received a bit of good news on Tuesday when it was announced that, as of 2010, Capstone's microturbines will make them eligible for cash rebates from the California Public Utilities Commission's (CPUC) Self-Generation Incentive Program (SGIP).

While the news is good for Capstone's customers, and therefore also for Capstone, how the heck does the leadership of that state think they are going to pay for these cash rebates?

This news, while perceived as positive for the CPST stock, is just another example of how out of touch California is with reality. Californians love, absolutely LOVE to see the state government spend money, but no one wants to figure out how to pay for all that spent money.

Earth to California - your intentions are fine, but get back down here to reality with the rest of us. You can't even afford to pay your own employees or for the public programs that are getting out of control, how the heck are ya gonna give cash rebates for a Capstone Microturbine?

Disclsoure: VFC is long CPST.

Comments

[Pierre:]

Well, how California is going to pay for it, the problems in Tibet and a lot of people starving in Africa are important issues and we should all be concerned, but they have little to do with the fact that it is still a benefit for Capstone. It is a law now, and California will have to find the money, if they don't have enough some things will not be paid, but not necessarily will stop the rebates first. I think this article should be published in a "California" column and not Capstone's.
A rebate for Capstone customers is GOOD news for Capstone. If you want to analyze the benefits or other things related to this issue be my guest, otherwise go publish under another heading.
Best wishes. Pierre.

Oct 14 12:05 PM

[mbr:]

Disagree with Pierre, the article concerns Capstone. A rebate is good only if it can be paid and California is broke. Fortunately California is not the world and Capstone has many other opportunities

Oct 15 03:55 AM

[jerrydd:]

California has a separate fund from utility revenues to fund this and many other RE. Those who make the problem, pay for it, What a concept!! And it has worked well keeping their electric costs low compared to what it would be without it.

Not only that but many are saving a lot or even making money from this program, increasing household wealth.

Cal might not do a lot of things right but their energy programs are very good. Most of Cals fiscal problems come from misguided constitutional amendments put in by repubs yrs ago.

Oct 15 09:11 AM

[Alan Young:]

"Californians love, absolutely LOVE to see the state government spend money, but no one wants to figure out how to pay for all that spent money." So it would appear, but if you break it down to individual voters, we are not all that irrational. It's the flaw in the state constitution that requires a 2/3 vote to raise taxes but only a simple majority to spend. So the majority of us like the spending programs and try to raise revenues; the minority kill the revenue but can't (or won't) stop the spending.

It makes for ugly politics, to be sure.

Oct 15 10:03 AM

[poedinCA:]

You are living in a dream world if you think CA energy rates are low and that somehow this market intervention "increases household wealth." Good for Capstone, bad for California. California's woes have nothing to do with constitutional amendments or republican policies. The problems trace to general government incompetence and a big dose of union politics. Our pension plan for former government employees is perhaps the most egregious abuse of the taxpayer (even excluding the $50 Billion dollar loss suffered by Calpers last year). But add to that a confiscatory tax policy, a dysfunctional education system controlled by teacher's unions and an unfunded immigration problem imposed by the federal government and you basically have a disaster in slow motion.


On Oct 15 09:11 AM jerrydd wrote:

>
> California has a separate fund from utility revenues to fund this
> and many other RE. Those who make the problem, pay for it, What
> a concept!! And it has worked well keeping their electric costs
> low compared to what it would be without it.
>
> Not only that but many are saving a lot or even making money from
> this program, increasing household wealth.
>
> Cal might not do a lot of things right but their energy programs
> are very good. Most of Cals fiscal problems come from misguided constitutional
> amendments put in by repubs yrs ago.

Oct 15 11:26 AM

[manya05:]

California has always acted more as an independent nation than as a state within the United States. That is why they have always been trend-setters (like it or not you red state types). In following with that tradition, they are just behaving like Washington (or any other government out there): spend it... and then figure out how to pay for it later.

Oct 15 11:41 AM

[johnnydoright:]

Also, wont Califronia recieve funding generated from teh increase in sales tax from the company? Stop doggind this stock.. its not about business, its about cleaning up the environment... people if you are reading this... invest in teh stock, buy up the shares, and also email the company to let them know you support them... they are literally cleaning up the environment with the turbine product!

Oct 18 06:01 AM

[Pierre:]

Exactly what I was saying, the discussion starts being about California and not CPST. Nothing wrong with that, it is that it just does not belong under the CPST post.

Oct 21 03:19 PM