Interesting article yesterday about the retirement of a coal-fired generation plant in Tennessee.  The TVA is planning to retire its Allen plant by 2018 to comply with earlier agreements it made with the EPA and "clean air" groups.  The TVA is now debating a source of replacement generation for this plant.

The TVA has proposed replacing it with a new gas-fired plant.  The TVA's analysis has determined this to be the cheapest option, and TVA is obligated to select the cheapest option.

But Sierra Club doesn't like that option because, in addition to being anti-coal, Sierra Club is now anti-gas, too.  Sierra Club has decided that TVA should replace Allen with the "wind" power Clean Line purports that it will ship to the TVA via a 700-mile transmission line cutting a slash through Oklahoma, Arkansas and Tennessee.  Clean Line has not yet proposed a fixed price for its "wind," saying only:
“We think we can provide green power at an attractive, fixed-rate price for TVA and other utilities in the region,” Clean Line Energy Executive Jimmy Glotfelty told TVA last year. “Having a guaranteed price for 20 years is a great hedge against volatile natural gas prices.”
What good is a "guaranteed price" when it's guaranteed to be higher than other options?  Why should the TVA commit to a speculative transmission line project that may never be built?  It's not responsible planning to depend on a fantasy to keep the lights on.  Clean Line is not part of any regional plan and is not guaranteed to be built.  No authority has "ordered" it, or determined an in-service date.  Clean Line has little in the way of permits to construct the project.  Meanwhile, Allen must stop supplying power in 2018.

Quite aside from the dilemma of planning its resources on speculative projects at undetermined costs, the TVA has stated multiple times that a replacement for Allen must be physically located in the same area.
The existing three coal-fired units at ALF provide both real and reactive power for the Memphis area. To continue to reliably serve the area, generation resources must be located at or near ALF.
This is an engineering problem that also cannot be solved by a "clean" wind power fantasy.  Loss of reactive power can cause voltage drop resulting in blackouts.  Read more about reactive power and why it's necessary here.

Sierra Club doesn't want to hear any of that nasty reality.  It has embarked on an expensive advertising campaign in certain parts of Tennessee
, advising people to send comments to the TVA asking them to "turn, not burn."  Sierra Club wants to have its clean energy hopes and dreams satisfied right now by bullying the TVA into committing to a wind power fantasy, instead of a rational reality that will ensure the lights stay on at the lowest possible cost.  Because, at the end of the day, that is the TVA's mandate -- to keep the lights on.  Sierra Club's resource plan for the TVA is uninformed and unworkable.  How many Sierra Club electrical engineers does it take to plan for the TVA?  The correct answer is none, because they don't exist!

Sierra Club is selling pure fantasy under the cover of "green is good."  Environmental organizations are so hellbent on "clean energy now" that they are grabbing at straws and hoping an uneducated public will support their misguided efforts.  Yes, we can transform to a cleaner energy future, but it's going to happen gradually, not all at once, and certainly not with bulldozers clearing a 3000 mile path for "clean" energy
from coast to coast.

Sierra Club says it has gathered 50 comments to the TVA supporting its
efforts.   Only 50?  How much did this ad campaign cost, and what's the cost of each comment?

The TVA will be meeting August 21 to make its decision about how it will replace the Allen plant.  You can send your own comments here.

 
 
That big revolving door at FERC keeps spinning.

Today, Commissioner John Norris resigned, three years before his term was up.  One out.

Last week, returning Commissioner Chery
l LaFleur was sworn in to a new term, and will temporarily act as lame duck chairman of the Commission.  Her chairmanship only lasts until next April.  One in.

Controversial
new Commissioner Norman Bay was sworn in earlier this week for his new term, and will advance to the chairmanship when LaFleur gets demoted next April.  One in.

The day after Bay was sworn in, FERC finally did what it had been threatening to do for the past 4 years and issued a Notice of Alleged Violations to Powhatan Energy Fund and its trader Alan Chen, officially accusing them of market manipulation.


Powhatan has been very publicly and aggressively
fighting FERC's attempt to eke out a settlement before formally charging them, and had been critical of Office of Enforcement Director Norman Bay's nomination as commissioner.  Powhatan's website has lots more information about the case.

Powhatan's response: 

“Your preliminary findings make no sense.  Should you choose to proceed with a public notice against Powhatan and/or Huntrise, please be advised that they will respond publicly and forcefully.”
So, just when FERC manages to get all its commissioner seats filled, a major public relations battle and search for a politically suitable commissioner starts all over again.  Here's a better idea:  Since FERC is all political now, maybe we should just start electing FERC commissioners, since they're supposed to regulate in the public's best interests?
 
 
Silly schemes and misleading names were in high gear during yesterday's FirstEnergy Q2 2014 Earnings Call.  You know you're in for a treat when Tony the Trickster opens the festivities with another one of his *heavy sighs*.

FirstEnergy announced its new plan to make Ohio consumers assume all the risk of its unregulated, competitive generation fleet and called it, "Powering Ohio's Progress."  But, let's get real here, FirstEnergy should really call it "Powering Our Profits," because that's its purpose.

And I blame the birth of this ridiculous scheme on the West Virginia Public Service Commission, who set up West Virginia's consumers to absorb the company's risk on its Harrison power station last year.  In that scheme, West Virginia customers took on the burden of paying the operating costs of the Harrison power station by purchasing all its generation.  In turn, FirstEnergy would sell any excess power into regional markets and return the profit it earned doing so to the consumers.  Sounds great, right?  However, the cost of owning and operating Harrison is greater than any profits that may be derived from selling excess power into the market, therefore, consumers would end up paying more.  But, the WV PSC added one important term to its crazy plan that required the company to use the profits from market sales of power to pay down the "acquisition adjustment" fee of acquiring Harrison that was added to rates.

It is because the WVPSC allowed FirstEnergy to foist the risk of owning and operating Harrison onto its consumers that FirstEnergy got so encouraged to attempt to foist the risk of two of its other competitive plants onto Ohio consumers. 

But, the big difference here is that West Virginia is a fully regulated state, while Ohio is a competitive state.  In Ohio, electric customers can choose their generation supplier, but not their distribution provider.  The electric distribution system is owned and operated by the utility who traditionally served the customers.  Even deregulated states cannot change that, unless they allow other companies to construct their own separate distribution system to serve customers, and that's neither economic nor logical.  Therefore, even in deregulated states, customers are still served by, and receive a bill from, their regulated distribution provider.  Where generation is competitive, the distribution company simply adds the charge from your generation company to your bill and passes the costs through to you.

FirstEnergy's Powering Our Profits surcharge would be tied to its regulated distribution affiliates in Ohio.  The charge is non-bypassable, which means that it would be part of your distribution service and you would pay it no matter who your generation provider is.

So, let's look at this...  FirstEnergy Solutions is the FirstEnergy subsidiary that owns the competitive generators.  As the owner, FES must cover the entire cost to own and operate the plants, and in return it keeps any profits or absorbs any losses that result from selling the generation into the competitive power market.  But, market prices have been low and are not expected to recover any time soon.  This means that FES has been subject to more losses than profits from the generators it owns.  So, FirstEnergy's scheme will force its regulated distribution companies to enter into a contract to purchase all the power generated by FES's plants at a set price that will cover FES's costs and pay it an 11% profit.  Suddenly, FES's generators are profitable and risk-free!  But the distribution customers have a bunch of very expensive power they have purchased.  Can they use it?  No!  FirstEnergy's POP plan requires the distribution companies to sell the generation they have purchased into the competitive power market at whatever price it can get.  FirstEnergy says that in the first three years, where prices can be predicted, the distribution companies and their ratepayers will take a loss on the sale of power.  However, FirstEnergy says that its crystal ball predicts that power prices will rise in the remaining years of the 15 year contract and that a profit will be made selling purchased power into the market.  Gotta ask... if FirstEnergy is so certain there's a profit for these competitive generation plants just over the horizon, why don't they hold on them?  Because there isn't.  It's all smoke and mirrors, hopes and dreams.

FirstEnergy wants to hand the risky hot potato of owning uncompetitive generators to its Ohio distribution customers so that they can absorb the risk of market prices.

What a bunch of crooks!
 
 
Block Grain Belt Express-Missouri is calling on its members, and all Missourians, to speak out about the Grain Belt Express transmission project at important Public Service Commission hearings slated to begin next week.

"We really cannot over-emphasize how crucial these public hearings are to preventing the precedent of an out-of-state company receiving the state’s power of eminent domain to take private property for its speculative, for-profit venture,” said Jennifer Gatrel, spokeswoman for Block GBE. “We must stand together as a community to protect our property rights!”

The first hearing is scheduled for Tuesday, August 12 at 11:00 a.m. at the Knights of Columbus Hall in Monroe City. That hearing will be closely followed by one at 6:00 p.m. the same day at the Hannibal-LaGrange University Theater Auditorium in Hannibal. Other dates include August 14 in Marceline and Moberly, September 3 in Cameron and St. Joseph, and September 4 in Hamilton and Carrollton.

Block GBE leadership advises citizens who wish to participate to arrive early to have their names added to the speakers’ list, and immediately find a seat inside the meeting room.

Mary Mauch, spokeswoman for the Block RICL Illinois citizens group fighting Clean Line’s Rock Island Clean Line project, has been speaking out about some of the tactics Clean Line used in Illinois last year to pack the public hearings with incentivized speakers and prevent affected landowners from having an opportunity to make their views heard.

“Clean Line bussed in groups of students, offered them a free dinner, dressed them in Clean Line t-shirts and handed out talking points that supported RICL. However, it was clear that the students were ill-informed about the actual purpose and details of the project” said Mauch. “The most disturbing aspect of Clean Line’s stacking of the speaker pool was that many affected landowners who had driven long distances to speak were turned away without a chance to have their voices heard,” she added.

Block GBE believes that Clean Line may be planning a similar scheme in Missouri based on emails and other documents that were divulged by the company during an earlier complaint by Missouri Landowners Alliance regarding Clean Line’s public relations practices.

Group spokesperson Jennifer Gatrel said that the emails revealed that Clean Line had been offering students pizza parties and other “swag” in exchange for gathering signatures on a petition to the PSC supporting Grain Belt Express, and that Clean Line has been planning to bus in college students to the Missouri public hearings for months.

“This is how the transmission permitting game is played,” said Keryn Newman, a nationally-recognized grassroots consultant who observed Clean Line’s efforts to mute the comments of affected landowners in Illinois last fall. “It’s about an effort to simply out-number and out-shout impacted landowners with large numbers of indifferent individuals acting at company direction while motivated by freebies or promises of a fun party with as many friends as they can bring along,” she added.

Some of Block GBE's major concerns are property rights, property devaluation, health effects, and the impediments to farming posed by the lines. Citizens interested in standing up for Missouri and showing Grain Belt Express how much they care about their communities and property rights can get more information about the public hearings at blockgbemo.com or by calling 660-232-1280.
An updated copy of the public hearing schedule can be found here.

Copies of the Clean Line emails can be viewed here.
 
 
Where do investor owned utilities get their silly project names?  PJM gives transmission projects alpha-numeric names.  Sometimes companies name their projects for the substations they connect (i.e. Susquehanna Roseland).  But sometimes a company proposes a project so big, so expensive, and so outrageous that it needs its own cutsie-poo name, like some sort of fire-breathing, money-eating dragon (i.e. PATH, TrAIL, MAPP).

Behold, Project Compass!
PPL proposed this monster last week in conjunction with its 2nd quarter earnings call.  Maybe it was just some elaborate distraction for investment analysts?  A poorly executed joke?

At any rate, here's the motivation for this ambitious and bodacious "investment" in new transmission:
The strong year-to-date increase in ongoing earnings was driven in part by a combined $69 million from our domestic utilities, driven by returns on additional transmission investments in Pennsylvania...
Well, shoot, if you can make a little money "investing" in transmission, why not go big and make a LOT of money, right?
Also this morning, we announced a PPL Electric Utilities proposal to PJM, as part of the competitive solicitation process under FERC Order 1000. As currently proposed, the 500 kV transmission line would run about 725 miles from Western Pennsylvania into New York and New Jersey, and also south into Maryland. The project is in the preliminary planning stages. The new line would improve electric service reliability, enhance grid security and enable the development of new gas-fired power plants in the shale gas regions of Northern Pennsylvania. The proposal would create savings for millions of electric customers by delivering lower cost electricity into the region and reducing grid-congesting cost. According to preliminary estimates, the cost of the project, which is not yet included in our CapEx projections, would be between $4 billion and $6 billion. Because of the magnitude of this proposal, there is a good chance we may enter into partnerships to develop and build the project. The preliminary timeline envisions completion of the project by 2023 to 2025, assuming all necessary approvals are received and construction begins in 2017. Approvals are needed from various regulatory and regional planning entities. We'll keep you posted on any further developments.
But it doesn't sound like the analysts shared PPL's enthusiasm and confidence in Project Compass:
Daniel L. Eggers - Crédit Suisse AG, Research Division
Bill, can you maybe get a little bit more into this transmission project today? I guess, kind of how the process works from announcing, looking at something to where we'll see action. What kind of dollars you have to spend upfront? And then, if you look at the challenges you guys had with Roseland and other folks have had in the past, trying to build these new Pennsylvania East type of transmission lines, how you guys think you're going to approach it to make it a higher chance of success?

William H. Spence - Chairman, Chief Executive Officer, President and Chairman of Executive Committee
Sure. So the processes itself is one that's not been well traveled in the past, as you know. It's a relatively new process. So we'll continue to work with all the stakeholders to make sure that we do everything in our power to make sure that we get this approved on a -- as timely a basis as we can. Maybe I'll ask Greg to take you through kind of what we understand to be some of the key milestones and processes we have to do to make this a reality, so, Greg?

Gregory N. Dudkin - Principal Executive Officer, President and Director
Yes, thanks. So first off is the filings. So PJM had a window that just closed recently. So this project, Project Compass, was filed as part of that window. As far as the approvals are concerned, so this project not only is part of PJM, but also goes into the New York ISO, still need approvals from both entities. Also we'll need state approvals, as well as utility commission approvals. So for me, what increases the probability of success is just the compelling nature of this project. When you think about what's happened in the industry over the past year, the polar vortex, substation security being a big issue, coal retirements being a big issue. This project really pulls all those issues together and provides significant benefits to the consumers in the region. So I think it's the compelling nature of the benefits of this project that will help the project move forward. We are putting together an outreach plan. In fact, I've started this morning to get people that will be involved in the project, up to speed and be looking to work with others to make sure that this is a success.

Daniel L. Eggers - Crédit Suisse AG, Research Division
Okay. So we should -- this will be, I guess, probably a little quiet from our perspective for -- in a period of time, while you get your ducks in a row. Is that kind of how we should think about it?

Gregory N. Dudkin - Principal Executive Officer, President and Director
Yes, I would say so. Because of all the entities we have to work with my sense is that we have a better idea about the timeline as far as approvals probably by the end of this year. But it should be fairly quiet from your perspective.

Daniel L. Eggers - Crédit Suisse AG, Research Division
And then the money you guys are putting into it now, is there a route for recovery if this is not successful or is this money you guys are burying on PPL for the time being?

Gregory N. Dudkin - Principal Executive Officer, President and Director
Yes, this is something that is not recoverable. So we'll -- if it doesn't go forward, then we'll just had to eat that.
Eat.  Eat.  Eat.

There's nothing "compelling" about this project.  It's uninspired, unrealistic overbuild in its purest form.  Why should ratepayers shell out billions to "fix" a bunch of minor problems?
Neel Mitra - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division
Question on the transmission project. It looks like the map you provided, the starting points are really kind of where the new CCGTs, that are announced for PJM in '16 and '17, are being built. Is the -- is kind of the economic reason for the project that some of those gas plants that are going to be built right on top of the shales, they just don't have enough transmission capacity to get to where they need to, to provide reliability? Or is there another real economic benefit that I'm not seeing?

William H. Spence - Chairman, Chief Executive Officer, President and Chairman of Executive Committee
Well, there's a number of potential benefits, and I'll let Greg describe some of those. But that clearly could be one of them, but there are others as well.

Gregory N. Dudkin - Principal Executive Officer, President and Director
Got it. And so, I would say when we are -- when potential generators come to us, one of the issues is they need to obviously connect to our transmission. And in some cases, that can be very, very high cost. So part of the thinking on the economics is if we sited through the region, the cost to connect for those generators would be much less. So again with potential coal retirements, we think there's economic advantage for that on a going-forward basis. And we use pretty conservative assumptions around generation retirements. But beyond that, there are reliability benefits. Again, we talked about substation security. There are benefits that, actually, we didn't really factor in the economics. But I think there'll be a significant economic benefit there, reduced congestion. So all that, when you factor all those together, it is a significant positive economic benefit to the consumers.
Oh, right, we're supposed to spend billions to make it cheaper for new merchant generators to sell their electricity in a "competitive" market.  If these new generators can't afford to compete in the market by paying their own way to existing transmission connections, then they're not profitable and competitive and shouldn't be built.

Reliability?  Where's the driver for that?  Or are we going to put the cart before the horse again and create the "opportunity" for transmission before creating the "reliability" issue it is intended to fix?

Substation security?  How do existing substations get made safer by building new ones?  Is it because we're going to increase the number of possible targets to water down interest in just a few crucial points?

Didn't factor in the economics... but I'm sure they can make something up!


Wow, pretty weak reasoning there, Greg!
Paul Patterson - Glenrock Associates LLC
A lot of my questions have been answered. But just -- and I know it's some way off in the future here, but when the transmission line is built, what do you expect it to do to the market? Is there any basis differential or any sort of impact you could sort of suggest, that sort of in the ballpark, that would happen as a result of these major projects.

William H. Spence - Chairman, Chief Executive Officer, President and Chairman of Executive Committee
Yes, as you can imagine, because it is so far out and there's so many moving pieces, coal retirements, how many new gas pipelines may be built to move shale gas away from the constrained areas, and so forth, that we really don't have a forecast that we could point you to suggest which way prices would move as a result of this transmission project.

Paul Patterson - Glenrock Associates LLC
Okay. And no part of the project is going to be really done before 2023, is that correct?

William H. Spence - Chairman, Chief Executive Officer, President and Chairman of Executive Committee
That's our target. So with it, the earliest would be 2023.
See question above... they didn't factor in the economics, they're going to make that part up later!
Rajeev Lalwani - Morgan Stanley, Research Division
My first question is on the transmission project that you announced. Can you provide some insight on any competing projects that PJM is also looking at?

William H. Spence - Chairman, Chief Executive Officer, President and Chairman of Executive Committee
At the moment, we're not aware of any competing projects. This is a very unique project, that I'm very proud of the team here that came up with the concept and the forward thinking to put something of this nature in front of PJM. So we're not aware of any competing projects. And the requests that PJM have had, have been smaller projects to basically address some relatively small reliability concerns. I think there 4 or 5 of them. And this project and I response to some of those, but it goes well beyond that. Again with something that we think is very unique and compelling from a stakeholder process -- perspective.
Because, ya know, when the only tool you have is a hammer, everything looks like a nail.

Obviously there is no need for a new transmission project of this magnitude, but PPL thinks they can "compel" PJM into agreeing to this massive boondoggle without any competition developing.  This is exactly how PJM got into trouble on Project Mountaineer.  When it's not about reliability or economics, it's greed, not need.
Angie Storozynski - Macquarie Research
Okay. And lastly on the transmission project, I know it's many years out, but just looking at how the Susquehanna-Roseland went and the 3-year delay to cross, what, a 3-mile stretch through the Delaware Water Gap even though there was an existing right of away. I mean, obviously, we don't see exactly how this proposed line goes, but should we expect similar issues with siting of the transmission line?

William H. Spence - Chairman, Chief Executive Officer, President and Chairman of Executive Committee
Greg, do want to take one?

Gregory N. Dudkin - Principal Executive Officer, President and Director
Sure. Thanks. So certainly, when you're talking about a 725 mile line, siting is going to be a big issue. So we will work with all the stakeholders. We've had success, actually Susquehanna-Roseland is a great example. So it took us a while, but we were building through a national park. And I think it had been very successful. I think the folks there appreciate the care we took of the park, and so I think our reputation is good in that area and that's why I think we'll be successful.

Angie Storozynski - Macquarie Research
So this proposed line doesn't go through any national parks or any environmental -- that shouldn't face any environmental issues?

Gregory N. Dudkin - Principal Executive Officer, President and Director
No national parks.
No, no national parks.  Their last escapade in a national park cost the ratepayers $60M in hush money to the Department of Interior. 

ALL the stakeholders?  Landowners and ratepayers, grab your stakes, we're heading out!
 
 
The Association of Tennessee Valley Governments (ATVG) is an advocate for TVA and the local governments that reside in the Tennessee Valley region.  ATVG represents the nearly 1,000 local governments that reside within the seven-state TVA region. They represent local governments in Alabama, Georgia, Kentucky, Mississippi, North Carolina, Tennessee, and Virginia.  There is strength in numbers. Collectively, they are over nine million people strong.

The Association of Tennessee Valley Governments has urged the Tennessee Regulatory Authority to "...exercise caution as it considers the application of Clean Line Energy Partners, LLC, for a certificate of public  convenience and necessity to operate as a public utility with powers of eminent domain within the State of Tennessee..."

One more strike against Clean Line, and this time it's coming from seven states that Clean Line has targeted as potential customers for its Plains & Eastern Clean Line.

On August 1, the ATVG made the following resolution, to be forwarded to the United States Department of Energy, the Tennessee Regulatory Authority, the Tennessee  Congressional delegation, the Governor of Tennessee, and the TVA Board of Directors
:
Whereas, the Association of Tennessee Valley Governments (ATVG) represents local governments within more than 200 Tennessee Valley River Region Counties which closely monitor issues associated with the
Tennessee Valley Authority (TVA); and

Whereas, TVA's mission focuses on providing low cost, reliable electricity, environmental stewardship and economic development to the people of the Tennessee Valley; and

Whereas, the TVA Act of 1933 mandates that TVA provide power to its customers at the lowest feasible cost; and

Whereas, TVA is currently evaluating a proposal to purchase a large amount of wind generated electrical power from the Oklahoma panhandle from Clean Line Energy Partners, LLC, and transport It 700 miles using a single high voltage direct current transmission line that will bypass the existing network of power
lines to Memphis, Tennessee; and

Whereas, such a partnership between Clean Line and TVA would likely transport wealth outside the Tennessee Valley to the detriment of the nine million residents of the Valley; and

Whereas, TVA has stated that electricity demand in the Tennessee Valley is not expected to return to 2007 levels until 2020; and

Whereas, the nation's power grid is a complex, interconnected network of generating plants,
transmission lines and distribution facilities; and

Whereas, bypassing the grid to purchase electricity from such a long distance away increases security threats by providing additional exposure for natural or malicious events due to the extreme distance between generation and point of use without needed network redundancy; and

Whereas, wind is an intermittent power source that lacks the dispatch capability of other resources and does not eliminate the need for base load or dispatchable power plants like other more dependable resources such as nuclear, natural gas, coal and hydropower; and

Whereas, the number of property parcels and property owners that may be negatively affected by eminent domain as a result of the construction of this proposed 700 mile transition line is unknown;

now, therefore

BE IT RESOLVED by the Association of Tennessee Valley Governments (ATVG), that we strongly encourage the Tennessee Regulatory Authority to exercise caution as it considers the application of Clean Line Energy Partners, LLC, for a certificate of public convenience and necessity to operate as a
public utility with powers of eminent domain within the State of Tennessee until it is proven that its proposal meets TVA's obligation to provide reliable power to its customers at the lowest feasible cost.
The ATVG recognizes the security, reliability and economic drawbacks of importing unreliable wind energy hundreds of miles, considerable price considerations aside.  ATVG has also heard the message of the Clean Line opposition groups loud and clear -- eminent domain for Clean Line's projects is just plain WRONG!

Bravo, ATVG!  And congratulations to the thousands of hard working grassroots activists across the midwest who remain resolute on their path to victory!
 
 
W T
PPL?
I think PPL needs to do a round of drug testing of its employees.  Whoever came up with this idiotic idea must be on something.

PPL announced today that it had "submitted an application to PJM" to build a 725-mile 500kV line, estimated to cost $6B, through four mid-Atlantic states.

Never going to happen.

Residents of affected states are still reeling from PJM's last big transmission building idea, Project Mountaineer, that cost them billions, including nearly half a billion dollars for planned projects that were never built.  Try it, PPL, and you will experience coordinated, strategic opposition like you've never seen before!

The Morning Call seems to be the first media outlet to... err... call PPL out on its outrageous money-making scheme.  PPL interstate transmission project both costly and lucrative:  Project would fill utility coffers while costing ratepayers billions of dollars.

Morning Call says:
The project also would be a significant source of revenue for PPL Corp., PPL Electric Utilities' Allentown-based parent. Under Federal Energy Regulatory Commission rules designed to encourage infrastructure investment, utilities may earn a profit of 11.68 percent on transmission projects.
That translates into a profit of up to $700 million. PPL would share the money with any other utilities that participate in the project.
PPL customers, meanwhile, would see the cost, including utility profits, reflected in their rates — though the burden of paying for the project would be shared by ratepayers in all four of the states involved.
But, Morning Call only sees the tip of this iceberg.  PPL can apply to the Federal Energy Regulatory Commission for transmission rate incentives that would up its profits significantly.  In addition to incentive ROE adders that can increase the 11.68 percent several percentage points, PPL can also ask for guaranteed cost recovery in event of abandonment, a return on construction work in progress that enables them to begin earning that juicy return immediately, even before the project is completed, and many other outrageous financial rewards.

In addition, Morning Call's math is wrong.  The $700 million profit the reporter calculated is only that earned in THE FIRST YEAR of operation.  Transmission project rates work sort of like a 40-year mortgage.  The return is calculated and paid on the depreciating balance of the project cost every year!  So, in the first year of operation, PPL would earn a return on $6B and collect a certain amount of depreciation on the project assets that would lower the balance owed by ratepayers.  The second year, PPL would earn a return on the depreciated balance, and additional depreciation.  And so on, over the 40 year (or more) life of the capital assets.  PPL's possible profit from this ridiculous project is a nearly endless goldmine!

And, one last thing Morning Call gets wrong -- this project will be paid for, in part, by ratepayers in all 13 states in the PJM region because of its size.  A 500kV project built in PJM is cost allocated at 50% to all ratepayers based on peak usage, with the other 50% being assigned to the cost causers/beneficiaries.

Moving right along into PPL's feeble assertions that its project will:
If approved, PPL predicts, the project will improve energy reliability and security and provide customer savings by eliminating transmission bottlenecks and encouraging development of lower-cost natural gas-fueled generation plants.
The new plants would help replace energy supplied today primarily by coal-fired plants that, under increasingly stringent federal air quality standards, are expected to be retired in coming years.
This doesn't even make sense.  The coal-fired plants that will be closing are located in the Ohio valley, not on the east coast.  Once those coal-burners are offline, it will free up significant transmission capacity for any new "mine mouth" Marcellus shale gas-fired plants built in the Ohio valley.  Why would we need to build a new west to east transmission line when there's already plenty of them sitting idle due to coal-plant closings?

PPL says they will have a robust public input process to find out where to site the line.  Seriously?  That strategy doesn't work anymore.  It's all about need for the line in the first place, not where to put it.  Get with the brave new world of transmission opposition, PPL!

And speaking of siting the line... where is that new Maryland substation supposed to be on that featureless map?  If you compare it to a real map of Maryland, it looks like it's in Howard or Carroll counties.  But, what if there was land available in neighboring Frederick County for a proposed substation?  Oh, deja vu!

This has got to be the most thoughtless transmission proposal I've ever seen. 

Never going to happen.
 
 
New kids on the Block!  Block Clean Line Plains & Eastern (Pope, Newton, Johnson & Conway Counties) has launched as a geographically-based offshoot of Arkansas Citizens Against Clean Line Energy, and in concert with the larger nationwide "Block" movement against all Clean Line Energy transmission projects.  Arkansas is on fire!

After several years of Clean Line's unnoticed, cozy planning with federal agencies and environmental and business interests, affected landowner "stakeholders" have recently found out about Clean Line's destructive plans for their private property, and word is spreading quickly.  The Clean Line cat is out the bag!  (Along with some deee-licious ham!)

These resourceful grassroots activists have managed to dig up even more embarrassing Clean Line foibles (just when you thought we'd gotten to the bottom of the barrel!)

First interesting tidbit is the Tennessee Regulatory Authority Clean Line Plains & Eastern docket.  Clean Line filed a petition to be granted public utility status back in April, along with the usual letters and resolutions of support from various business interests and local government entities.  No landowners or other stakeholders stepped up to intervene or protest.  Should be smooth sailing for Clean Line, right?

Wrong!

The TRA issued an Order on May 13 Convening A Contested Case And Appointing A Hearing Officer.  No rubber stamp for Clean Line in Tennessee!  Toto, I think they're not in Kansas anymore!

The TRA docketed the exchange of letters between Senator
Alexander and Rep. Fincher and the TVA.

Clean Line's submitted testimony is rife with the same old specious claims about how much the project is wanted and needed by the TVA and mysterious "others."

Clean Line president Michael Skelly says:
The TVA and other load serving entities have a strong and growing demand for cost-effective electricity from renewable resources.

There has and will continue to be a demand for affordable and reliable renewable energy in Tennessee, the larger TVA service footprint, and throughout the Mid-South and Southeast.

The Project will allow TVA and other utilities in the South to reliably and consistently access the country’s most cost-effective wind energy resources.

In particular TVA has been a leader in realizing the benefits of wind energy in the Southeast. In its most recent Integrated Resource Plan, TVA called for 2,500 MW of renewable energy purchases by 2020. Wind energy from economical locations such as the Oklahoma Panhandle can provide a consistent, long-term, low-cost energy supply to TVA and other load-serving utilities in the Mid-South and Southeast.

These wholesale buyers may include TVA as well as other utilities inside and outside of Tennessee that seek to purchase low-cost electricity generated in the Oklahoma Panhandle region.
I guess Skelly is now in charge of the TVA's integrated resource planning?  Maybe not.  TRA staff recently submitted their first data request, covering some of the same hard questions landowners across the Midwest have been asking the company, to no avail.  This time, Clean Line has to answer.
The Petition states that the Company will provide wind power to TVA and other potential customers. Please identify all other potential customers that Plains and Eastern has had discussions with regarding the purchase of power and provide copies of any agreements reached with these customers.

On page 6 of David Berry's testimony, he provides a list of wind power purchase
agreements involving the TVA (purchaser). To your knowledge, discuss the TVA's process for choosing to enter into such projects, including whether the projects go through the RFP process.

Is TVA or other potential wholesale purchasers under any obligations (including any state or federal requirements) to purchase additional wind power to meet its renewable energy objectives? Provide supporting documentation. To your knowledge, is TVA currently meeting its renewable energy objectives? Will TVA be able to meet its renewable energy objectives absent approval of Plains and Eastern's petition?

Provide a copy of all Memorandums of Understanding with TVA.

Please explain and describe in detail any guarantees or assurances that Plains and Eastern can provide lower cost renewable energy to TVA than TVA currently purchases.

Please list all available state and federal tax credits that Plains and Eastern currently
receives related to projects in other states and federal credits that the Company anticipates receiving upon completion of the project proposed in this docket. Are these federal credits figured into the pricing model used by Plains and Eastern? If so, please explain in detail the impact on rates, as well as the Company's overall operations, that
would result if these federal credits were discontinued by the federal government.

On page 9 of Michael Skelly's direct testimony, he states, "The TVA and other load serving entities have a strong and growing demand for cost-effective electricity from renewable resources." Provide the source from TVA and other potential entities stating they have a growing demand for renewable resources.

On page 11 of Michael Skelly's direct testimony, he states, "The Project will allow TVA and other utilities in the South to reliably and consistently access the country's most cost effective wind energy resources." Please provide all underlying support and rationale
relied upon for the assertion that this project will allow access to "the country's most
cost-effective wind energy resources."

For clarification, please provide the estimated number of construction jobs that would be
created in Tennessee if the petition is  approved. Also provide the estimated duration of these temporary construction jobs.

For clarification, please provide the estimated number of permanent full-time jobs that
would be created in Tennessee upon  completion of the project.

Please describe any assurances and/or guarantees that Plains and Eastern will hire
Tennesseans for the temporary construction and permanent jobs detailed above.

Provide the latest update on the environmental impact statement being prepared by the DOE under NEPA. Also provide the latest update on all federal reviews/environmental studies being performed by the DOE.

Provide an update regarding Plains and Eastern's CCN application in Arkansas.
Well done, TRA!

Also, the trade press has developed a sudden and voracious appetite for all things Clean Line after Arkansas NPR affiliate KUAF did an in-depth story.

First the "Recharge News" wrote a piece all about Clean Line's aspirations to use the federal eminent domain power of the Department of Energy to take privately held land from the people of Oklahoma, Arkansas and Tennessee.  Except, the reporter got it wrong and had to correct his original assertion that Clean Line had received eminent domain authority in Oklahoma.  The reporter got schooled about the legal status of Plains & Eastern by an Arkansan, not by company president Michael Skelly.  The reporter also "miscommunicated" the authority for the federal EIS, claiming that "Clean Line is in the process of preparing a draft environmental impact statement (EIS) for the project, which it hopes to release later this year for public comment."  Oh, so that explains why DOE personnel, who are actually preparing the DEIS for release and public comment this fall, act more like minions of Clean Line than the federal government.  Something really stinks in that stall!

The reporter also tells us that the DOE approval of this scheme to take privately held land for corporate profit is "eventual," although even he couldn't use the word "partnership" without quotes. 
The eventual “partnership” with DOE through its agency Southwestern Power Administration (SWPA), which markets power in six south-central states, would be limited to use – if needed – SWPA’s eminent domain authority to obtain right-of-way in Arkansas.
So, what do the consumer-owned electric systems in SWPA-land think about its role in this scheme?  Another sharp Arkansan dug up this document, Comments of Ted Coombs, Executive Director of Southwest Power Resources Association before a House subcommittee.  Here's what Coombs thinks of Clean Line and DOE's little Sec. 1222 scheme:
SPRA has concerns in general about implementation of Section 1222, and specifically about the proposed Plains and Eastern project. Of specific concern is the protection of SPRA’s federal power customers from any and all liabilities arising from the planning, design, construction, operation, maintenance, and/or ownership of Section 1222 projects. Other concerns include the
demonstrated need for any proposed project and that such projects promote   interconnection of the grid in which they are located.
And maybe Coombs thinks that Section 1222 isn't exactly legally bulletproof:
SWPA’s original authority to construct transmission facilities is limited by Section 5 of the Flood Control Act of 1944 to “only such … facilities as may be necessary in order to
make the energy and power generated at … [Corps] projects available” to its wholesale
customers. SPRA is concerned about extending SWPA’s authority to construct transmission facilities beyond this original mandate.
And, to make matters worse, Transmission Hub also did an in-depth interview with Arkansas Rep. Charlotte Douglas, who opposes the Plains & Eastern project.

Looks like Clean Line is once again channeling Admiral Yamamoto"I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve."
 
 
Well, it looks like the wild and crazy X Partay going on between the California Public Utilities Commission and utility PG&E has come to an end, for now.

Fierce Energy reports that the City of San Bruno and the CPUC have reached a settlement in the City's suit over CPUC's violations of the public records act.  In exchange for dropping its suit and agreeing to assume its own legal expenses, the City will finally get access to the documents it's been requesting for more than a year.

CPUC thinks it's scored big time in the settlement because it always intended to hand over the documents anyhow:
"The CPUC is committed to facilitating access to records requested under the California Public Records Act and always intended to meet the broad public records requests of the City of San Bruno," said CPUC interim General Counsel Karen V. Clopton in response to the allegations. "The delay in doing so was due to the breadth of the city's requests, the volume of records to be located and reviewed, and the limited availability of staff resources to conduct a comprehensive search and review. Under the settlement, the CPUC has produced records that it would have made publicly available regardless of the complaint."
So, what was in the documents?
"[The] disclosure (from more than 7,000 pages of documents received after San Bruno filed the Public Records Act lawsuit against the CPUC) demonstrates an ongoing, illicit and illegal relationship between the CPUC and PG&E," said San Bruno Mayor Jim Ruane in a statement. "Not only do these private communications violate the law, but they provide evidence of a relationship between the utility and the CPUC that is familiar, collegial and cozy."

The private emails over the past 36 months are alleged to expose more than 40 violations of the law against ex parte contact by Peevey and top CPUC staff in the San Bruno case.

In a statement, the City of San Bruno said: "We cannot have the same man who has proven to be biased presiding over the so-called 'penalties' that the CPUC will levy against PG&E. Nor should the citizens of our state be endangered by the CPUC's inability to ensure pipeline safety issues."
Time to clean house at the CPUC, and about a thousand other captured regulatory agencies.
 
 
Marcelino Cuadra is in big trouble.  He's been sentenced to seven years’ probation after he pleaded guilty to charges of corrupt organizations, theft of services and conspiracy to commit theft of services in connection with electric meter tampering incidents in Pennsylvania.  He also has to complete 60 hours of community service and re-pay nearly $350K to electric utility PECO.

Cuadra was convicted of tampering with numerous business and residential electric meters to "fix" them so monthly usage would be reduced.  He says the electric customers paid him for the "fix."

Compare Cuadra's plight to West Virginia's recent meter scandal, where FirstEnergy subsidiaries Mon Power and Potomac Edison were found by the Public Service Commission to have failed to read customer electric meters bi-monthly as required.  This resulted in consecutive estimated bills where monthly usage would be reduced, only to show up on an actual read bill months later that amounted to thousands of dollars.

What was FirstEnergy's sentence?  A $7.5M yearly rate increase to pay for monthly meter readings.

I think it must have all been in the technique employed to commit the act, since both seem to be the result of corrupt organizations and conspiracy.

But, don't call Marcelino, there are safer ways to save energy.