Oregon eyeing Mesilla, Cascade Sierra Solutions on energy tax credits
Oregon officials are investigating Texas-based Mesilla Valley Transportation to determine if the carrier took unfair advantage of the state’s Business Energy Tax Credit (BETC) program, which is intended to assist companies that provide jobs in Oregon, generate “substantial energy savings,” and operate vehicles on state highways. The Oregonian newspaper broke the story earlier this week, citing investigations of its own into the fleet’s operations.
The Oregonian report stated that Mesilla (which currently lists 817 trucks as Oregon- based) received final approval for 752 separate tax credits between 2007 and 2009, worth some $4.5 million. The credits were used to help outfit its truck fleet with fuel-saving devices; they represent two-thirds of the total tax incentives awarded for trucks during that period. The real sticking point, according to the newspaper, is the fleet apparently operates “only a tiny fraction” of their total miles in Oregon.
The newspaper also called into question the role of Cascade Sierra Solutions (CSS), which helped Mesilla access the tax credits to finance the vehicle upgrades. Both Mesilla and CSS have stated that they operated within program guidelines.
Sándor Lau, development director for CSS, told FleetOwner that the organization “has done everything totally by the book with the explicit authorization of the Oregon Department of Energy." He added that, “[We believe] the BETC is doing exactly what it was intended to do for the environment, the economy and national security.”
In a letter to stakeholders dated February 24, Sharon Banks, CEO of CSS, stated that:
“Everyone at Cascade Sierra Solutions is driven by our passion and mission of saving fuel and reducing emissions from heavy-duty diesel engines. Imagine our shock and disappointment to learn The Oregonian had written an article highly critical of our work.
“…The Oregon Business Energy Tax Credit (BETC) program provides incentives to upgrade Oregon registered trucks to become more energy efficient, and these incentives play an important role in building Oregon’s green economy. About half of our work is with owner-operators who have fewer than five trucks. Their margins are getting slimmer and slimmer. Energy savings supported by BETC enable them to continue operating.
“... owner-operators benefit from BETC and Oregon benefits from their entrepreneurial spirit. Larger trucking companies have also participated in the program and not all of them are headquartered in Oregon. Eligibility for each project is determined and authorized by the Department of Energy before any CSS project proceeds. …With the support of the BETC program, CSS has generated $5.1 million in business for Oregon equipment manufacturers, installers and other green businesses just in 2009.”
A “Fact Sheet” on Mesilla provided by CSS lists information not covered in the newspaper piece:
- “In 2000, Mesilla Valley Transportation [MVT] decided to establish a green fleet and expand operations on the West Coast.
- MVT opened a small terminal adjacent to the Jubitz Truck Stop in Portland, [OR], as well as an office focused on freight efficiency in Coburg. Both facilities are in operation today. The Coburg office is co-located with Cascade Sierra Solutions.
- It invested over $70 million in state-of-the art, [EPA] SmartWay-certified trucks. Oregon’s Department of Energy approved a tax credit of $4.5 million to help offset that investment.
- MVT has struggled to increase new business in Oregon because the recent economic downturn greatly reduced the amount of freight available to haul.
As the investigation commences, The Oregonian reports that “state energy officials and legislators are scrambling to fix loopholes that allowed Mesilla to take advantage of Oregon’s generous tax breaks.”
