Arkansas Congressman Steve Womack seems to be tired of being put off by the U.S. Department of Energy.  On Thursday, the Congressman sent a letter to Secretary of Energy Moniz, demanding a meeting to get the answers about Clean Line and Section 1222 of the Energy Policy Act that he has been denied on two previous occasions.
Secretary Moniz:

I have now written you in August 2013 and September 2014 regarding the Department of
Energy's (DOE's) consideration for a partnership with Clean Line Energy Partners through the Plains & Eastern transmission line project and have yet to receive a satisfactory answer to my questions.

Since the date of my previous inquiry, I understand that the Draft Environmental Impact Statement (EIS) has been released for public comment, at which point, in accordance with your latest response to my office, "DOE will consider questions such as those raised in [my] letter."  Unfortunately, merely acknowledging this fact does not, in turn, answer the questions raised.

As you know, the path of the proposed transmission line runs directly through the Third District of Arkansas. Therefore, I am extremely concerned about Clean Line's authorization.  Respectfully, I am also very frustrated by one of your Department's disingenuous responses to my letters that identified "public interest" as one of the considerations given to the Clean Line
application.
There has been an astounding lack of assurance that my district - and the State of Arkansas- will have any interest in this project at all and no guarantee that Clean Line will supply power to my constituents and my state. I place further emphasis on this concern given the denial of a Certificate of Public Convenience and Necessity from the initial application Clean Line had submitted to the Arkansas Public Service Commission.

Section 1222 of the Energy Policy Act of 2005 has never been invoked for the approval of an
electric power transmission facility. In light of the uncertainty of this process and the Section
1222 application, in addition to a lack of assurance regarding the benefit for the state of Arkansas from such a transmission line, I must again ask the following:

• What guarantee might the citizens of the Third District be afforded when it comes to a
specific energy supply to our state rather than a highway for power to Tennessee?
How does the Department of Energy determine its authority for partnership with a private entity and the application of supposed rights to eminent domain?
• What factor does the denial of Clean Line as a public utility in the State of Arkansas play
in the final decision by the Department of Energy?

The DOE has been less than forthright in providing answers to the legitimate questions raised regarding Clean Line. Therefore, at this time, I would like to request a formal meeting with you to not only discuss these questions, but also the unacceptable responses that have been sent to both my office and stakeholders within the Third District. I look forward to your prompt reply.
Congress created Sec. 1222, Congress can take it away.

Something fishy is going on here...  maybe it's time to start an official investigation into the way DOE has been handling the Clean Line matter.  I'd start by asking them why the "Management Committee" as described in section 8a of Contract No. 1 between Clean Line Energy and the DOE, the Advance Funding and Development
Agreement Plains and Eastern Clean Line Transmission Project
, has not been meeting quarterly as stipulated in the agreement.
 
 
Will the U.S. ever get an offshore wind industry started?  One step forward, two steps back.  Just when Cape Wind might finally lay oar to the water, the utilities that signed power purchase agreements to purchase it have canceled their contracts, saying that Cape Wind failed to meet its obligations under the contract.  Cape Wind says the contracts are still valid, citing force majeure.  The companies are further squawking because they were "forced" to sign the power purchase agreements to get the state of Massachusetts to approve their merger. 

The article forgot to mention that the company has made a $40M investment in hundreds of miles of transmission lines for onshore wind since the power purchase agreement was signed in 2010.  Did National Grid cancel its contract with Cape Wind in order to stifle competition to its investment in Midwest wind?

Offshore wind continues to struggle, while Midwest wind is trying to court the U.S. Department of Energy to invoke an as yet untested section of the Energy Policy Act to "participate" in the Clean Line projects in order to usurp state authority to site and permit them, and use federal eminent domain to take land Clean Line was denied by the states.  Clean Line's projects have not been reviewed or approved in any regional transmission planning process under FERC's Order No. 1000's competitive transmission scheme.  The proposed action of the DOE would not only put the federal government in the business of transmission planning, it would also actively interfere with electric markets, two areas where the DOE does not have jurisdiction or expertise. 

Why is Midwest wind a bad idea?  Because it's located too far away and building overland transmission simply to ship electricity to the east coast is expensive, time consuming, and unfair to landowners crossed, who will receive none of the benefits, but all of the burden.

Why is offshore wind a good idea? 
Responsibly developed offshore wind power offers a golden opportunity to meet our coastal energy needs with a clean, local resource that will spur investments in local economies - creating unparalleled job growth and avoiding the need to export hard-earned energy dollars outside the region.
Or so says a mid-2014 report from the environmental community, Catching the Wind.  But yet, some of the same groups who touted the benefits of offshore wind in this report were simultaneously intervening in Midwestern wind transmission line cases and telling state utility commissions that there's a "need" for Midwestern wind on the East coast.  So, which is it?

Or is the Sierra Club just a bunch of hypocrites?  I'm leaning toward that hypothesis, since the Sierra Club is all over the map on the issue of eminent domain for energy projects, as pointed out by an Arkansas landowner.
The eminent domain issue has become a key point of contention between Pilgrim and the Sierra Club. An attorney for the Sierra Club has said that Pilgrim has no rights of eminent domain because it is a private company and not formally designated as a utility by the Board of Public Utilities.
But yet, the Sierra Club thinks that Clean Line, a private company not formally designated as a public utility in Arkansas, should use eminent domain as "the middle ground" to take the rights of way it finds necessary through the state.
On the other side are landowners who see the power lines marching across their land as more big government intrusion into their lifestyles and even interfering with their livelihoods.

Additional arguments against construction of the lines are possible health effects, and the fact that the entities proposing the construction are private companies.

It seems strange an argument against private industry would be made. The United States to a very large degree operates that way. It’s capitalism, right?

Rights of way must be secured for these power line projects private or otherwise, just as any project in the public interest such as a toll road or a railway. Fair market price must be paid for any property taken for rights of way.
I think the Sierra Club is an opportunist, using whatever arguments it thinks will delay or alter energy plans it does not like (those involving fossil fuels).  Sierra Club has no qualms about using landowners as pawns to further its environmental agenda and has shown it will jump on board even the worst energy projects, if they are only cloaked in "clean" labels.  Sierra Club needs to develop a rational and coherent energy policy and stick with it because people are abandoning the club in droves.  Maybe Sierra Club thinks that's okay, since it can more than make up for the members it loses with more grant money from big, mysterious, "environmental" funds.  However, true grassroots integrity shall remain elusive.
Let's get on with the offshore wind, shall we?  If the East coast wants "clean" power, they need to make it in their own backyard.  Once they get over the initial direct cost shock (as opposed to the hidden incremental cost increase of building new transmission lines across the country -- they're not going to avoid the costs), they may realize that being clean and green and responsible for their own environmental footprint provides other social and economic benefits as well.
 
 
In setting national environmental policy to improve and coordinate Federal plans, functions, and programs, Congress recognized that each person should enjoy a healthful environment and that each person has a responsibility to contribute to the preservation and enhancement of the environment.

The policies and goals of National Environmental Policy (42 U.S.C. § 4331, Congressional declaration of national environmental policy) are intended to:
(1) fulfill the responsibilities of each generation as trustee of the environment for succeeding generations;

(2) assure for all Americans safe, healthful, productive, and esthetically and culturally pleasing surroundings;

(3) attain the widest range of beneficial uses of the environment without degradation, risk to health or safety, or other undesirable and unintended consequences;

(4) preserve important historic, cultural, and natural aspects of our national heritage, and maintain, wherever possible, an environment which supports diversity and variety of individual choice;

(5) achieve a balance between population and resource use which will permit high standards of living and a wide sharing of life’s amenities; and

(6) enhance the quality of renewable resources and approach the maximum attainable recycling of depletable resources.

The intent of Congress seems to have been lost in the creation of the Plains & Eastern Draft Environmental Impact Statement.  Consideration of these goals should be evident, but the closest the Statement comes to evaluating these issues is in Chapter 3, Section 3.5, Environmental Justice. However, that section simply consists of bureaucratic “box checking” with its tables of racial and economic statistics and finding of “no significant impacts.”

What our federal government failed to consider in its study are the very real impacts the Plains & Eastern project (P&E) will impose on one segment of society for the sole benefit of another.  That the beneficiaries of the Plains & Eastern project are intended to be economically advantaged and politically influential eastern cities with a “green” conscience, and that the ones who must make the social and economic sacrifice to meet this need are rural landowners without political clout does not seem to have been of moment in the study.

Rural landowners and farmers have been fulfilling their responsibilities as trustees of the land that feeds us all for generations.  P&E will interfere with their responsibilities.  In addition, P&E will also interfere with their ability to make a living, bisecting small farms that provide income and/or real estate investment wealth to those who depend on their land for economic purposes.

P&E will preclude the ability of rural landowners in Oklahoma and Arkansas to live in safe, healthful, productive, and esthetically and culturally pleasing surroundings as unsightly, gigantic transmission lines may endanger their well-being and interfere with their productivity and sense of place. 

P&E is not without environmental effect.  Weighing the destruction of one part of the environment to benefit another is not a matter of simple trade offs when there are other options available that are not as damaging to the environment.  P&E has not been determined needed to meet any identified public policy goal by any authority tasked with planning the electric grid.  P&E has no customers.  Other options exist for eastern cities, such as offshore wind, local solar, or other local and regional renewable energy projects that provide local jobs and economic stimulation.  Americans are not being given a choice, where market forces determine their best option.  Participation in P&E by the Department of Energy is a top-down, government-forced “solution” to a problem that does not exist.

P&E will affect the historic, cultural and natural aspects of the rural environment, causing rural landowners to sacrifice for the needs of eastern cities.  There is no balance here, all the sacrifice is coming from one segment of society, while all the benefits flow to the other.  What are eastern cities willing to sacrifice for their “green” conscience?  Atlantic offshore wind has been struggling to be built for years, but rejected time and again for esthetic or cost reasons.  When eastern cities are faced with having to live with the infrastructure that supports their habits, they reject it in favor of other solutions.  When those solutions remove the sacrifice, but not the benefits, to rural landowners in other states, the intent of national environmental policy is forgotten.  This paradigm has existed for decades, where Ohio Valley residents have sacrificed their health, environment and economic interests to mine and burn coal that is turned into electricity and transmitted to eastern cities.  P&E is just more of the same sacrifice of one segment of society for the needs of another.

There is no balance to be found between population and resource when the needs of the many continually override the needs of the few.  No Americans are disposable at the whim of others, no matter the color of their skin or their economic position.  Wide sharing of life’s amenities requires that each person accept responsibility for their own needs.  If eastern cities require cleaner energy, they have the ability to create it themselves, and in fact, many already are doing so.  Top down government solutions, such as P&E, are inconsistent with individual choice.

Rural America is a finite resource that is fast disappearing and must receive careful consideration in DOE's EIS.

I believe the underlying mission of the federal government has been forgotten in the preparation of the EIS and, instead, a blinders-clad bureaucracy has simply proceeded through the motions of preparing it without considering its purpose.  P&E is asking the federal government to wield the sledgehammer of eminent domain to force its project on a rural America that has rejected P&E.  Integral to the big picture is the fact that P&E is nothing more than a business plan, an idea for profit, and does not fulfill any identified reliability, economic or public policy need.  There is no amount of sacrifice that is acceptable for the pecuniary interests of private investors.

Don't forget to file your EIS comments here!
  Deadline is March 19!
 
 
Isn't that amazing?  FirstEnergy has learned to work faster for shale clients.  Remember that next time you want some service... pretend you're a shale gas company.

And here's another amazing fact:
Their promise and rapid pace of development happen to coincide with the Akron-based electricity company’s recent focus on making its transmission segment the lead revenue growth generator for FirstEnergy, where Mr. Bridenbaugh serves as vice president of transmission.
Serendipity, right?

So, who pays to supply electricity to new shale gas companies?  You do.
Most of the time, when the company upgrades a transmission line or builds a substation to service a new gas processing plant, the investment is recovered from the utilities that benefit from the upgrade.
Utilities.  Got that?  Not shale gas companies.

How much will you pay?
...the company has said it wants to retrench in its utility and transmission businesses, both of which provide a guaranteed rate of return. For transmission projects, the return is often in the double digits.
Lots.

Why are you paying?  Because the new shale gas companies make the existing grid unreliable, and you need reliability!  (which came first?  the chicken or the egg?)
Because the new, shale-related loads are springing up in rural areas with older or nonexistent infrastructure, the new pull on the lines often presents a reliability risk for other customers drawing electricity in the area. Therefore, many such projects end up going before PJM Interconnection, a Valley Forge-based organization that manages the nation’s largest grid, servicing 13 states in the northeast including Pennsylvania.

PJM has a formula to determine who’s responsible for the cost of upgrades.

Typically, for projects like those on FirstEnergy’s shale plate, it’s shared between the direct beneficiary — a compressor station or processing plant — and the regional utilities whose customers also see a benefit from improved service and reliability.
Hmm... I wonder if regional utilities want to pay half my electric bill this month?  Because, you know, I could jump up from my chair and turn on every electric appliance and light in the house right now.  And that might hurt regional reliability... right?
 
 
As if PJM's electric market rules aren't already complicated enough, now PJM is insisting that RPM participants follow rules that aren't even rules yet.

Well, yeah, we all know that PJM answers to no one.  No, really, a certain PJM employee actually told a reporter once, "PJM answers to no one," when he was trying to sell the PATH project to West Virginia citizens. 

And PJM's market monitor told a newspaper once, "following the rules does not mean you are not manipulating the market."

So, it appears that PJM gets to make up its own rules, often before or after the fact, and nobody can protect you, because PJM is omnipotent and all.  Following the tariff doesn't appear to offer any protection against being accused of manipulation.  And, now it seems that PJM members have obligations to abide by proposed rules that aren't even in the tariff...

Recently, PJM filed changes to the capacity market portion of its tariff which, if approved, will establish a deadline for data submittal.  The new deadline will occur in early January each year.  In its filing, PJM has asked FERC to approve the tariff revisions by April 1st. 

But, PJM and Monitoring Analytics seem to think the proposed portion of the tariff is already in effect and are requiring capacity suppliers to submit certain data now.  FERC has yet to approve these new rules!  But, what could happen if the new data is not submitted by the proposed deadline in January, even though the tariff revisions are proposed to be effective in April and are NOT YET IN EFFECT?  Could the market participant be referred to FERC under a tariff violation claim?

So, not only is it possible to be guilty of something without actually violating PJM's rules, it is now also unacceptable to violate new rules that are not yet in effect! 

I think the bloated bureaucracy that is PJM needs to be slimmed down and cleaned up, because free M&Ms only have so much charm.

 
 
Coming across common themes over and over tells me something... maybe I should write about it?

I've seen a whole bunch lately about the politics of transmission line proposals, more precisely how politics affects the state public utility commission process.

This morning, I read something that pushed the issue into blog post status.

Iowa Governor Terry Branstad has warned his state legislature not to interfere in the business of the Iowa Utilities Board.
Branstad, who appoints the members of the utilities board, warned against "political interference" into the administrative review process by which a pipeline carrying Bakken crude oil and a transmission line transporting wind-generated electricity could be approved.

"It would be mistake to get politics into this," Branstad said. "We should abide by the processes that have been put in place."
Maybe Branstad doesn't understand those "processes?"  Our government is separated into three branches:  The Executive Branch carries out existing laws and recommends (but does not alone create) new ones.  It administers our government.  The Legislative Branch makes laws, at the will of the people it represents.  The Judicial Branch interprets existing laws.  Branstad is a member of the executive branch.  The Iowa legislature is a member of the legislative branch.  The IUB is a member of the judicial branch, although unlike a regular court, a utility board can make up copious rules about how they're going to carry out the laws made by the legislative branch.  Trying to figure out which one is more powerful is an exercise in futility... and politics.

Branstad, as Governor, appoints the members of the IUB.  This is a political process.  A member of the executive branch will appoint those he believes will carry out his mission.  Once appointed, IUB members are supposed to serve independently as they interpret utility laws, however, a crafty governor can control this process by allowing appointments to expire while the incumbents continue to serve at the daily whim of the governor, who can remove the incumbent and replace him at any time.  I have no idea if this is the situation in Iowa, but I have seen just this situation perpetuate in several states.  When it happens, the judicial branch comes under the thumb of the executive branch and can be easily influenced to make certain decisions on a political basis in order to remain in place.

The legislature makes the laws that direct the actions of an independent, quasi-judicial utility board.  The judicial branch cannot create laws, but receives its marching orders from the legislative branch.  If the legislature is displeased by the actions of the Board, it can make new laws to shape the decisions of the Board.  In this way, the legislature can influence the judicial branch.  However, there's more protection on this side of the coin, because the legislative branch is operating at the will of the people, and must obtain consensus from many to create new laws.

I don't know why Branstad believes it's not already "political."  The state utility board process is about as political as it gets.  While he warns the legislature not to get involved in a situation he controls, what the legislature eventually does will be political.  It's all political!

So, if you want to influence your state utility board process, you must engage in politics.  You can talk to your legislators to gain their support to make new laws that guide the decisions the utility board makes.  You should probably talk to your governor about refraining from getting involved in the utility board processes.  Branstad has it completely backwards!

Politics is described as:
the activities associated with the governance of a country or other area, esp. the debate or conflict among individuals or parties having or hoping to achieve power:
Companies proposing new transmission projects hope to influence the judicial process as much as individuals or groups opposing the transmission project.  In order to do so, they push the legislative or executive branch to shape the judicial decision.  Despite plenty of denial, the judicial processes of a utility board are heavily influenced by politics.  It's the reason transmission developers spend so much lobbying your representatives to support their projects AGAINST YOUR WISHES!

Public opinion drives political decisions.  A legislator is carrying out the will of the people.  If enough people become involved in a utility board process, they can shape the process through their legislators, who may be more interested in their duty to the people than the free lunches and campaign contributions transmission corporations provide.  The bigger the public push back, the better your chances.

Transmission developers also court other groups and individuals to take a position supporting their proposal.  Sometimes a quid pro quo situation develops.  This happens because a utility board is unlikely to approve even the best project if it is under political fire not to do so, therefore the transmission developer needs allies to create, at least, an appearance of support.

So, can a large, loud uprising of the people affect the decision of a utility board?  You bet'cha!  But don't get confused by the difference between public opinion and public comment.

Public opinion is an aggregate of public comment.  The public comments citizens make to a utility board, in isolation, rarely drive the decision of the Board because they are typically not based on legal arguments about the laws the Board must follow in its findings.

Utility law guru Scott Hempling recently pondered the effectiveness of public comments in his monthly essay.  This month, he featured several questions that he will use as projects for his utility law students.  Here's one:
Engaging the public:  Candor requires an admission:  The lay citizenry's views do not count as "substantial evidence," required by courts to sustain agency orders.  Does that fact make public hearings (i.e., the non-technical hearings) shams?  If not, then what is the value of public participation?  What are ways to create that value, at reasonable cost?   Traditionally, agencies announced public hearings in the newspaper's "legal notices."  How useful is that approach today?  What are an agency's responsibilities to educate the public and seek its views?
The "substantial evidence" Hempling mentions must come through the legal process, either through an attorney or individuals acting pro se.  While a utility board's decision is politically-driven, it must back up its decision on a legal basis.  The utility provides its proposed legal basis for approval through the evidentiary hearing process.  Opposition must therefore provide its own legal basis for denial in this same venue.  The utility board, thus armed, can choose from whichever body of evidence it needs to to back up its decision (and hopefully make it stick.)  It's pretty hard to make a decision that's not legally sound stick through appeals.  It would be doubly-hard for a utility board to make a decision that denies evidence of future reliability issues coming from a supposedly independent third party, such as a regional transmission organization.  Therefore, a utility or RTO may choose to find new information upon which to withdraw its proposal, instead of forcing a utility board into a denial.  But, again, this is a political process that takes place that allows utilities to withdraw and save face (and money, but that's another story).

So while your own individual comment may not carry much legal weight, when combined with the comments of thousands of others, it is a very powerful, political tool!

If Branstad truly wants to keep "politics" out of utility board decisions in Iowa, he should start a little closer to home.  The legislature, as the body tasked with making laws, can make any laws it chooses, whether Branstad likes them or not.  Sure, he could veto a new law, but doing so to a new law widely supported by the people would come at his own political peril.
"Never doubt that a small group of thoughtful, committed citizens can change the world;
indeed, it's the only thing that ever has."
- Margaret Mead
 
 
The Columbus Dispatch reports today that AEP has hired Goldman-Sachs to explore the potential sale of its unregulated coal-fired merchant generation fleet.

Coal-fired power plants are no longer profitable.  AEP and FirstEnergy have been unloading these liabilities on the backs of ratepayers in regulated states, and even have cases pending to unload them in unregulated states. 

The power plants are no longer profitable because the price of power has fallen below the cost to operate them, and these plants need a bunch of expensive retrofits to comply with new EPA regulations.  AEP and FirstEnergy are in a bind because they placed all their eggs in the same basket by hanging onto coal plants way past the time when smart utilities unloaded them at fire-sale prices.  Corporate greed strikes again!

The WV PSC just recently approved an AEP subsidiary's purchase of all but 140MW of one of the company's merchant plants, making Wheeling Power and Appalachian Power customers responsible for operating it and absorbing any losses.


In 2013, the WV PSC approved FirstEnergy's plan to dispose of its Harrison Power Station the same way, by making customers of Mon Power and Potomac Edison responsible for it.

The WV PSC never met a coal-fired power plant or rate increase that it didn't like.

Encouraged by the WV PSC, the Ohio companies next decided to try to unload more of their coal-fired assets on ratepayers in Ohio.  Except... Ohio is a deregulated generation state.  Demonstrating extreme creativity, the tedious twins came up with ingenious plans to shift responsibility for the plants to ratepayers anyhow.  FirstEnergy came up with its "Powering Our Profits" plan.  I don't know if AEP came up with a cutsie-poo name like FirstEnergy, but it also put forth a proposal to transfer responsibility for its
plants to Ohio ratepayers.

Gotta wonder how those cases are going to turn out at the PUCO, considering:


AEP has proposals pending with Ohio regulators that would provide a profit guarantee for five plants, four of which are part of the unregulated fleet. The company has said the plans would allow it to continue operating the plants, as opposed to a potential sale or shutdown.
But now it looks like AEP is getting ready to sell them instead.  Smart move.  Finally.

FirstEnergy is still too dumb to buy a clue.
 
 
Do you agree that the three market  participants he named were “bad eggs”?
Why or why not?
What kind of a question is that?  How are "bad eggs" legally defined?  Does FERC have an educated egg-dicator used to make this determination?
Those are the kind of questions FERC has been asking  folks not involved in its investigation as it tries to scrounge up some witnesses against Kevin Gates and Powhatan Energy Fund.  In November, FERC sent ten pages of questions (including the egg question, along with one about "bad apples") to a guy who talked to Kevin Gates about a job in the summer of 2010.  Bryan Hansen, who bravely chose not to be represented by a lawyer after FERC pounced on him, didn't seem to have much dirt to spill after all.

But FERC hit paydirt with another guy who was looking for work in 2010 -- the guy with the opinion about the eggs and apples.  In an email to Gates back in 2010, this guy worried that Alan Chen was going to "kill the goose that laid the golden egg," a badly-designed PJM market product that was profitable for everyone.  I think this guy was just watching too much Willy Wonka.


In the wake of FERC's December 18 Show Cause Order, the accused had 30 days to respond.  Gates, Chen and the companies requested a 30-day extension due to the holidays and new information that needed to be reviewed.  OE opposed it.  The Commission did what it often does... it split the baby and granted a 2-week extension.  The response is now due on Groundhog Day.  Auspicious!

FERC held a technical conference today about UTC transactions, where one of the panelists was from Twin Cities Power Holdings, LLC (any relation to the Twin Cities Power LLC that recently settled with FERC for $3.5M in a different market manipulation case?)  It seems that FERC and PJM are still trying to figure out the markets they have designed to "benefit consumers."  Maybe they should read the glossary at FERClitigation.com to figure some things out.

Meanwhile, it looks like Harry Reid's angry and sarcastic staffing services for federal energy commissions may be on the way out.

And new FERC Commissioner Collette Honorable, former chairwoman of the Arkansas Public Service Commission, is on the way in.  She's a breath of fresh air for this struggling federal commission.

Maybe she'll open her own twitter page, like Commissioner Moeller did last month.  He's tweeted four times (once about the Powhatan mess), has followed no one, but already has 192 followers, which I'm sure includes every suck up energy lawyer in DC, but probably not Harry Reid.  Isn't it nice to be so popular?
 
 
I noticed something funny the other day.  It seems that FirstEnergy is having trouble telling the same story about its transmission building endeavors to different audiences.

Just like new transmission lines proposed to criss-cross the midwest to allow "wind" to interconnect with the existing transmission system are nothing more than gigantic generator lead lines, FirstEnergy's "Energizing the Future" campaign to build new substations and transmission in West Virginia are nothing more than gigantic service lines to new Marcellus shale processing plants.

Generator lead lines (the transmission necessary to connect a generator to the existing transmission system) are paid for by the generator.  It's part of their cost of selling power, just like the rest of their plant.

So, why are service lines for new customers the responsibility of all customers?  If I wanted to open a plastics factory in my backyard and asked Potomac Edison for service, I bet they'd charge me plenty...  like the entire cost of the service line connected to whatever voltage I required for my plant, or the cost to upgrade existing lines to serve my plant.

The State Journal reports that FirstEnergy is building new transmission and substations in West Virginia to support the Marcellus shale industry.
Projects include the new Waldo Run transmission substation and a short 138-kilovolt transmission line in Doddridge County near Sherwood. The $52 million project is expected to support industrial users and enhance electric service to more than 6,000 customers in Doddridge, Harrison and Ritchie counties. The substation will accommodate additional load growth at a new natural gas processing facility, which consumes large amounts of electricity separating natural gas into dry and liquid components.

FirstEnergy is also working on a 138-kilovolt transmission line that will support the natural gas industry, as well as enhance service reliability for nearly 13,000 customers in the Clarksburg and Salem areas. The 18-mile, $55 million Oak Mound-Waldo Run transmission project is expected to be placed into service by December 2015.

The company is also evaluating additional transmission upgrades as new service requests from shale gas developers continue throughout the Mon Power territory. FirstEnergy is currently evaluating new transmission facilities in Wetzel County to support a midstream gas processing plant that continues to expand.
Would the existing 19,000 customers need their electric service "enhanced" if not for the addition of the Marcellus facilities?  Probably not.

So, what is FirstEnergy telling the landowners affected by their new, Marcellus-supporting projects?
Project Need
FirstEnergy has identified the reliability risk of low voltage conditions on the transmission system under certain conditions. The proposed project addresses the reliability issues. Its assessment is based on existing conditions and the need for system reliability to safely meet the electrical needs of the region now and into the future.
Nothing about shale gas development or new Marcellus facilities there.  Just mysterious "low voltage conditions on the transmission system under certain conditions."  Wanna bet those "certain conditions" are the construction of Marcellus facilities?

It seems that FirstEnergy has two stories here.  The one for its investors is all about building things to support Marcellus.  The one for ratepayers is about building things to support existing customers.  Obviously, one of these stories isn't exactly honest.

Why isn't the Marcellus industry paying the cost of new electric facilities to support its business? 

Why are West Virginia electric consumers, who have been subject to more and more rate increases recently, being asked to pay the cost of harvesting Marcellus gas?  Isn't the gas industry in West Virginia profitable enough without subsidies provided by ratepayers?

And if that isn't bad enough, FirstEnergy's transmission scheme is all about pumping more and more "transmission spend" into its transmission subsidiaries, like TrAILCO, that earn a sweet 12.7% return on equity courtesy of federal transmission rates.  In addition, these lower voltage transmission lines are beyond the jurisdiction of state regulators.  As noted on FirstEnergy's "fact sheet:"
Regulatory Approval
TrAILCo will submit a letter to the staff of the Public Service Commission of West Virginia advising them of the project.
Just a letter.  No debate.  FirstEnergy is a utility with eminent domain authority in West Virginia so they're just going to write a letter to the PSC, and come take your property.  They don't even need to notify you until they show up with the bulldozer.  Who needs due process?
Easements
In most locations, a new 150-foot wide right-of-way will be needed for the proposed transmission line. In a few locations, the new right-of-way will be 200 feet wide.
Who wins here?  The Marcellus industry.  FirstEnergy. And your elected officials owned by both industries.

Who loses?  Ratepayers.  Again.
 
 
Just one more post about Requests for Rehearing of the Illinois Commission's issuance of a conditional permit for the Rock Island Clean Line.

The Illinois Landowners Alliance not only reiterates the arguments put forth by ComEd and the Illinois Farm Bureau, but adds a stylish lambasting of the Commission for permitting "a significant and unwarranted intrusion upon landowners."
ILA’s witnesses and its many other members have expressed repeatedly their uniform opposition to the Project, routing and treatment of landowners and their concerns. The Order’s granting of a CPCN to Rock Island will permit Rock Island to force its way onto landowner property to “make land surveys and land use studies” (220 ILCS 5/8-510), a significant and unwarranted intrusion upon affected landowners for a project that is so speculative and tenuous.
Although the ICC significantly conditioned RICL's permit before any actual construction begins, and denied them eminent domain authority at this time, the ICC also allowed RICL immediate access to private property to conduct its "surveys."

It's a powder keg.  Let's hope it doesn't explode before the ICC reconsiders its misguided decision to order the trespassing and destruction of private property by a company with no financial assets.  The landowners don't seem to have changed their opinion about RICL and probably aren't going to welcome them to their properties with open arms and a forgiving attitude.  I hope the ICC thinks this though...