When Angus King launched his wind energy business in 2007, the notion of clean power was gaining popularity and the former governor was anxious to be its pitchman.

“I’m excited about it,” King said at the time. “I hope it’s a positive experience for us and for Maine.”

King is still positive about wind power, and many other Mainers are, too; but five years later, King is in the less exciting position of defending his wind career.

Today there are websites devoted to fighting wind farms, and support of renewable energy has become a partisan issue in a tense presidential-election year. The biggest change, however, is that King is running for higher office, and he could end up being the one man standing in the way of a Republican majority in the U.S. Senate. Polls earlier this summer showed he has a significant lead over his challengers, Republican Secretary of State Charlie Summers and Democratic state Sen. Cynthia Dill.

Republicans have intensified their criticism of King as the developer of a taxpayer-subsidized wind farm. Also, the National Republican Senatorial Committee is spending $600,000 to broadcast a new television ad saying King used political connections to win a “sketchy” federal loan guarantee and build an industrial wind farm.

King and his former business partner dismissed the Republican attacks as baseless in interviews last week.

The wind farm they built in Oxford County is a model project that is producing clean energy, paying back its loan and rewarding the community with free power and lower taxes, they said. King maintains he personally did not receive any taxpayer money for his role in the project.

“I got zero federal dollars. None,” he said. “I was trying to do something I thought was good for Maine and the country, and for these people to imply there was something wrong or nefarious just isn’t right.”

Charlie Webster, chairman of the Maine Republican Party, said regardless of whether King used connections, he needs to answer for using taxpayer money to support a business that doesn’t deserve it.

“Republicans tend to believe in free enterprise. If you could go out and build a wind farm and not have taxpayers’ money involved, we would support that,” Webster said. “It’s a scheme. It’s not something that will ever make a profit (on its own), or something that taxpayers should support.”

King was an energy entrepreneur before he was a politician. He worked in the hydro field and founded an energy conservation business, which he sold before becoming governor in 1995.

In 2007, four years after King left the governor’s office, he and Rob Gardiner, former president of the Maine Public Broadcasting Network, formed a new company, Brunswick-based Independence Wind.

King said they believed they could develop clean energy without the environmental conflicts and complaints that accompanied other early projects.

“It was a business, so there was some hope, anyway, that we could make some money on it; but in 2007, these were two guys trying to figure out how to do wind right, in effect,” King said.

Independence Wind’s first project was Record Hill, a 22-turbine, 50-megawatt wind farm in the Oxford County community of Roxbury.

Independence Wind became a partner in a new company, Record Hill Wind, along with Wagner Forest Management and other investors. King and Gardiner held a combined 10 percent share of Record Hill Wind.

Independence Wind also earned $50,000 a year in management fees to move the project through local and state permitting process, they said.

The majority investors were in charge of the financing, which in 2007 seemed like the easy part, King said.

“It was the least of our worries,” he said.

After the financial markets crashed in 2008, there was little willingness to risk money on energy projects, according to King and Gardiner.

In 2009, the so-called federal stimulus law created new incentives for stalled “green” energy projects to proceed.

The Department of Energy used funding to guarantee loans for qualified renewable energy projects that included innovative technologies. Guarantees that the federal agency would repay loans if developers could not enable projects to obtain financing at below-market rates despite the sluggish economy.

In 2010, Record Hill applied for a $120 million loan guarantee. Its private investors included the wealthy Yale University Endowment, but the project would not have moved forward with private financing, given the poor market conditions, according to King and Gardiner.

The energy department eventually approved the application based on Record’s Hill use of a technology intended to prevent turbulence, which can shut turbines down and reduce efficiency. It is the first commercial-scale use of that technology in the United States, according to the DOE.

After Record Hill applied for the loan guarantee, Gardiner called Willy Ritch, the spokesman for U.S. Rep. Chellie Pingree, D-1st District, and asked for a letter from Pingree in support of the project, according to both Gardiner and Ritch. Ritch followed up and Pingree wrote to the DOE in April 2010, saying, “I urge the department to look favorably on this request.”

That letter, two years later, is now the basis for a line in the new TV ad saying King used his connections to win the loan guarantee. Pingree was Maine’s Senate majority leader when King was governor, and the two are long-standing friends.

Ritch said last week that Pingree would have written the letter whether King was involved or not.

“This industry is one that Congresswoman Pingree certainly supports. Both for this reason and because this is the kind of thing she does all the time, it just made a lot of sense for us to do it,” he said.

Pingree is married to S. Donald Sussman, majority share owner of MaineToday Media, including the Morning Sentinel.

King said he did not make any request for a letter, and his only involvement in the application process was to attend one meeting with the investors and an energy department official to provide information about the permitting process.

According to the energy department, loan decisions are based on a list of technical criteria, such as “innovativeness.”

Nevertheless, it clearly is common practice for developers applying for loan guarantees to get letters of support from their members of Congress.

Energy Secretary Steven Chu said last fall in a congressional hearing that the department had received nearly 500 letters from members of Congress “who have urged us to accelerate our efforts and to fund worthy projects in their states.”

Pingree’s letter did not appear to speed up the process. Record Hill’s loan guarantee was approved in August 2011, 16 months later.

By the time the loan guarantee came through, King was no longer an owner of Record Hill.

In January 2011 — seven months before the loan was approved — the majority investors bought out King and Gardiner, according to documents provided by King’s campaign. The purchase price was settled at the time — more than $400,000 for King — but it would not be paid until the project was complete.

The buyout payment, known as a “success fee,” meant that King and Gardiner would continue to promote and represent Record Hill Wind even though they no longer owned a share or received a management fee.

Had the loan guarantee not come through, King and Gardiner would have had to wait for their payment until the market rebounded and the investors could get private financing, Gardiner said.

King received his $407,000 share early this year after Record Hill was officially complete.

He planned to keep working on Independence Wind’s second wind farm, Highland Wind in Somerset County — until U.S. Sen. Olympia Snowe, R-Maine, announced she would retire.

In March, King decided to run for Snowe’s Senate seat as an independent. Still well-known from his days as governor, he immediately became the frontrunner in the race and the biggest political target in the state.

King said he quickly decided to get out of the wind business entirely. He transferred his interest in Independence Wind to Gardiner for $1, leaving a $338,000 investment in Highland Wind, he said.

“Believe me, I wasn’t wild about walking away from $338,000, but I just thought it was the right thing to do. I didn’t see how I could credibly talk about energy in Maine (as a Senate candidate) while I was in a business that relied at least to some extent on federal support. … It just struck me as an obvious conflict,” King said.

Two days after King transferred his ownership, the U.S. House Committee on Oversight and Government Reform released a staff report criticizing the Department of Energy and questioning whether Record Hill and dozens of other projects legitimately qualified for the loan guarantees. It specifically questioned whether Record Hill’s technology was truly innovative and whether its investors needed the subsidy. A more complete review is ongoing, according to the committee staff.

The committee review was triggered by the bankruptcy last year of Solyndra, a California solar company that had received a $528 million loan guarantee. Republicans, who form the majority on the oversight committee, have used the costly Solyndra collapse to criticize renewable energy subsidies and President Barack Obama.

The Obama administration has defended the loan guarantee program and the projects it supported. King and Gardiner said their former project met all the standards for the subsidy, and that it simply got caught up in the partisan politics surrounding Solyndra.

More recently, Republicans have criticized another federal subsidy for Record Hill — a $33.7 million U.S. Treasury Department grant received in June.

The grant also is related to the federal stimulus law.

Renewable-energy developers have been receiving tax credits from the Treasury Department since 1992 under President George H.W. Bush. The 2009 stimulus law gave companies a new choice: Take the annual tax credit and recoup development costs over time or receive a one-time grant equal to one-third of a project’s development cost.

Record Hill is one of 37 Maine companies so far to choose a grant instead of a tax credit. Nationwide, 7,000 projects have received about $13 billion in grants, according to Department of Energy records.

One political blog post circulated by Maine Republicans last week suggested Record Hill got the grant because of King’s political connections, including donations to Obama’s re-election campaign.

King said he was out of the picture before the owners even applied for the grant. He dismissed the idea of favoritism in the tax credit program.

“If this is crony capitalism, Barack Obama has got a lot of friends,” he said.

Political influence or not, King cannot avoid the issue of subsidies for Record Hill because he had made a deal in 2011 to sell his ownership, said Steve Thurston, an opponent of wind power who clashed with King about the turbines near his part-time residence in Roxbury.

“The idea that King can somehow wash his hands of his wind business and avoid any conflict of interest in this campaign is ludicrous for me. He spent (much of) the last decade as a wind industry propagandist,” Thurston said.

King said last week he is not apologizing for Record Hill or the federal support. He said he is proud of how the project turned out and the way it is benefiting residents and repaying its federally guaranteed loan.

“People can argue, is this (subsidy) good policy or not? I happen to think it is good policy. But what they can’t argue is that somehow I got a special deal that nobody else got,” he said.

King maintains that the money he made on Record Hill was not based on the federal subsidies, although he acknowledged the investors used it to reimburse him. And he in no way got rich in the wind business, he said.

Taking into account all expenses and income, King earned $212,000 from Independence Wind, he said.

“That was based on an investment of almost $600,000 and five years of work,” he said. “And not a dollar of that $212,000 came from the federal government.”

Staff Writer Michael Shepherd contributed to this article.

John Richardson — 791-6324

jrichardson@mainetoday.com

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