Apparently FERC's Office of Enforcement had nothing better to do yesterday than to enjoy a summer drive down to Richmond for an enjoyable afternoon of venue shopping.
I guess they found exactly what they were looking for, because they dropped off a petition requesting a jury trial at the U.S. District Court for the Eastern District of Virginia, Richmond Division, in the matter of:
PETITION FOR AN ORDER AFFIRMING THE FEDERAL ENERGY REGULATORY COMMISSION'S MAY 29, 2015 ORDER ASSESSING CIVIL PENALTIES AGAINST POWHATAN ENERGY FUND, LLC, HEEP FUND, INC.,
HOULIAN "ALAN" CHEN, AND CU FUND, INC.
Although the Commission issued an Order assessing civil penalties on May 29, the accused had 60 days to cough up the roughly $34.5M in penalties and disgorgement. They didn't pay. FERC wasted no time filing its petition after the 60 days were up.
"It has taken Powhatan almost five years to get to court for a very simple spread trading strategy that has been blessed by 12 independent experts at our website, ferclitigation.com," said Powhatan's Richard Gates.
FERC listed six, count 'em, six lawyers as counsel for the plaintiff. It listed only two lawyers for the defense, one for Powhatan Energy Fund and one for Alan Chen, HEEP Fund and CU Fund. Does it really take six FERC lawyers to equal one defense lawyer? Who is paying for this? How much has FERC spent on this investigation over the past 5 years, and how much will it spend down in Richmond? At what point will the cost of this litigation be more than the recovery?
"While the costs of fighting off the bogus allegations have been huge and will just grow for us, we're glad we are able to stand our ground and not be forced into settlement the way others firms have. Plus, it will be nice to be in the neutral venue of a courtroom instead of this Orwellian organization that has trapped us the last 5 years," added Gates.
Richmond? FERC says it selected Richmond because:
Venue is also governed by FPA section 317, 16 U.S.C. § 825p, which provides that “[a]ny suit or action to enforce any liability or duty created by . . . this Act, or any rule, regulation, or order thereunder may be brought in [the district wherein any act or transaction constituting the violation occurred] or in the district wherein the defendant is an inhabitant.”
And the trades occurred in PJM. And Powhatan's "principal place of business" is in Henrico, Virginia. Of course FERC probably knows that the Gates brothers actually live in Pennsylvania and Chen in Texas.
Oh, there it is!
Respondents’ unlawful scheme resulted in
the misdirection and capture of over $10 million in PJM market payments, including
approximately $1,147,087 that would otherwise have flowed to Dominion Virginia Power and inured to the benefit of Dominion and its ratepayers, including ratepayers in this District.
So, FERC wants this case heard before jurors who might believe they were personally cheated out of more than a million bucks? I do hope they fully explain their use of "to the benefit of Dominion and its ratepayers" to show how much would have ended up in Dominion's pocket and how much would have ended up in Dominion's ratepayer pockets if not for the defendant's actions. Maybe FERC can also explain how much of the $34.5M in penalties and disgorgement will end up in Dominion's pocket and how Dominion will flow that recovery into the rates that will make the ratepayers on the jury whole (or not). And do tell where the rest of the money will go, FERC...
I will admit that I haven't read everything in this case, but FERC has yet to convince me that any actual ratepayers were damaged here. If Dominion had collected the MLSA payments instead of Powhatan and Chen, would they have directly reduced rates, or simply gone into Dominion's corporate coffers? Since FERC has yet to adequately explain, I'm leaning toward the latter option. Who is FERC really protecting here? Ratepayers or its pet incumbent utilities?
Gates seems to agree, "By filing the lawsuit, FERC has shown the world it continues not to support open and competitive power markets. Instead, FERC favors incumbent utilities that function without incentives to do better. Indeed, earlier this year the WSJ* described how utilities get profits by just spending more. While we believe in the societal benefits of competition, and know the law allows for it in these markets, it makes sense utilities may not want any."
Is FERC confused about who it serves? Is this case supposed to hinge on a jury's failure to understand it and instead be swept away by platitudes and grandstanding from FERC's sextet of lawyers? FERC used the word "Enron" something more than 30 times in its District Court Petition. Maybe the defense can use the word "McCarthyism" an equal number of times just to keep things fair? I suppose the jury's view of these two competing terms is going to depend on its average age.
And the quality of the public relations battle deployed.
*If you don't subscribe to WSJ and can't read this article via the link, type the phrase "Utilities’ Profit Recipe: Spend More" into Google and click through on that link. No, we're not advising that you engage in newspaper subscription link manipulation, through a scheme to engage in fraudulent Headline Googling (HG) transactions in internet search engine markets to garner excessive amounts of certain free reads of stories behind a paywall. I also recommend that you not engage in any views that constitute a wash viewing scheme in violation of the WSJ’s prohibition of that practice.
I have a declaration to make. Clean Line Energy Partners doesn't represent my interests. I'm pretty sure they don't represent the interests of any other eastern state ratepayers or the eastern states themselves, either. It's all just a bunch of "royal we" smoke and mirrors where Clean Line attempts to speak for others who aren't present and don't necessarily agree with them. "Me and my imaginary friends..." has no place in a court of law.
That's pretty much the basis for Clean Line Energy's application for rehearing of the Missouri Public Service Commission's denial of the company's application for a permit for its Grain Belt Express project.
The Kansas City Star continues its excellent coverage of the Grain Belt Express debacle with its story about the request for rehearing.
“The project is too important to Missouri’s energy future not to pursue,” Clean Line Energy officials said, adding that the state’s ruling also deprived the rest of country of low-cost, clean energy."
Where's the proof of that? Who elected Clean Line to speak for "Missouri's energy future?" Who elected Clean Line to speak for "the rest of the country?" Nobody, that's who!
The Missouri PSC does have a role in determining "Missouri's energy future," however, and the "rest of the country" has not been actively participating in the case.
Clean Line's request for rehearing is a long-winded whine about the Commission not accepting its "evidence" at face value. Clean Line also whines that, because it is not required to participate in regional transmission planning, the Commission's consideration of federally-sanctioned transmission planning is somehow discriminatory. Clean Line wants the PSC to ignore regional transmission planning when considering the "need" for a transmission project dreamed up for the sole purpose of enriching private investors. This collateral attack on regional transmission planning organizations simply cannot be supported.
But Clean Line's main argument seems to be to hide behind the Commerce Clause to claim that Missouri's denial "...interferes with the flow of interstate commerce, be it through actions that overtly discriminate against interstate commerce through differential treatment of in-state and out-of-state economic interests, or through actions that impose a burden upon interstate commerce that is excessive in relation to the putative local benefits."
Commerce Clause? Really? I hope Clean Line wasn't expecting anyone to actually be afraid of this, and is merely wasting time in Missouri while posturing for its lobbyists in Washington, D.C., who could claim that allowing state authority to site and permit transmission is preventing needed transmission from being built.
Clean Line is not THE ONLY way to ship electricity. In fact, it might not even be the most efficient or economic because it has not been vetted as part of any regional planning process. It's not like Missouri has said wind cannot be shipped across the state on existing roads, or new roads that are proven needed by regional planners. It's that Clean Line may not build a new, private, toll road to ship electricity across the state.
Clean Line seems to believe the Commerce Clause protects any private enterprise that wants to damage a state for its own interstate commerce profits. It's really not that simple.
So, here are a couple of things Clean Line says in its brief that demonstrate just how little Clean Line cares about the rights of people impacted by its projects:
1. "...because the narrow local interests that the Report and Order serves do not justify the burden that it imposes upon interstate commerce."
In other words, protecting the rights of Missouri property owners and electric ratepayers are less than the "interstate commerce" goals of Clean Line.
2. "The Commission never considered the substantial uncontested evidence on the record of renewable energy demand and RES requirements of other states, and the substantial public benefits the Project delivers to other states. It also cited to the concerns of individual Missouri landowners -- but in the application of the Tartan factors impermissibly weighed those concerns only against the potential benefit to local interest, as opposed to the broader regional and national interest -- in concluding that the evidence shows that any actual benefits to the general public” did not justify approval."
Perhaps the Commission gave little weight to Clean Line's conclusory "evidence" of what other states and the broader regional and national interests require. The concerns of individual Missouri landowners are real and came from the landowners themselves. The "needs" of other states or the nation at large were not presented by any of these interests, only Clean Line pretending to speak for them as the voice of the national interest. Clean Line, get over yourself! When the PSC gave Clean Line the opportunity to present evidence that these national interests needed its project, the only thing Clean Line could produce was crickets. Clean Line has no "other state" or "national interest" customers who need its "interstate commerce."
3. "The Commission’s finding that the Project would probably make Missouri-based wind projects less likely to be constructed is exactly the sort of economic protectionism that the dormant Commerce Clause prohibits. So too is the Commission’s criticism of the Company’s witness on economic benefits, who the Commission found did not address the displacement of jobs and energy production in Missouri due to the Project. Courts are highly alert to “the evils of ‘economic isolation’ and protectionism.... "
So, Clean Line believes that lost economic opportunities in Missouri are "evil" or should not be considered? Or that they must necessarily be less than the "national interest?" If all local interests take a back seat to "national" ones, that's a pretty slippery slope! I mean, we might as well just surrender ourselves to some world dominating corporation and let them do whatever they want. Speaking of Evil, is the good Dr. in the house?
4. "The Commission’s denial of the Company’s CCN Application runs afoul of this element of Commerce Clause analysis because it unduly burdens the delivery of electricity generated by wind farms in Western Kansas not just to Missouri consumers, but to key markets in Illinois and Indiana. The Commerce Clause violation is as apparent in this instance as it would be if Missouri sought to restrict passage of cattle raised on Western ranches for shipment to stockyards in the East."
Again, it's not as though the MO PSC said no electricity (cattle) could pass through the state... it simply denied a permit for Clean Line to burden Missouri residents by building a new toll road to ship only certain electricity (cattle) across the state. Cattle is perfectly free to use existing roads in Missouri to get to other states or anywhere it likes
5. "With the interests only of Missouri utilities and consumers in mind, the Commission made findings whose burden on interstate commerce clearly exceeds the local benefits. For example, the Commission found that Missouri had no need for the Project, and that the Project is not economically feasible, because utilities in the State could build natural gas fired plants and buy renewable energy credits. Neither is a valid reason to deny Kansas wind producers efficient access to the market or to deny utilities and their customers the ability to benefit from the Project. And the putative local interests do not outweigh this burden."
So, the ONLY market for Kansas wind power is through Missouri? Clean Line provides a "benefit" to utilities and customers? Did Clean Line prove this? I don't think so! Clean Line doesn't have any customers!
6. "Indeed, any burden to local landowners would be small compared to the hundreds of millions of dollars of savings to Missouri and other states. The evidence shows that Grain Belt Express has agreed to compensate landowners for the fee value of their land, plus an annual payment, plus any economic damages to crops. Even if, as a last resort, Grain Belt Express acquired an easement through a condemnation proceeding, Missouri courts would require that Grain Belt Express pay fair value."
Landowner burdens are "small"? That sort of depends on if it's your land, doesn't it? Who is Clean Line to determine the burden on landowners? If the burden was ameliorated by Clean Line's compensation, why are the overwhelming majority of landowners opposing the project? One could conclude it's because Clean Line's compensation doesn't even come close to making landowners whole. Clean Line also failed to prove the "hundreds of millions of dollars of savings to Missouri and other states." The PSC did not find those claims credible. How would Clean Line ever attempt to prove this claim, when it cannot set a price for electricity generated by others? It can't even set a capacity price for its transmission line at this point! There's simply nothing that shows evidence of "savings."
7. “The menace of inconsistent state regulation invites analysis under the Commerce Clause of the Constitution, because that clause represented the framers’ reaction to overreaching by the individual states that might jeopardize the growth of the nation— and in particular, the national infrastructure of communications and trade—as a whole.”
So, because all states don't have the exact same regulations governing siting and permitting of interstate transmission that somehow violates the Commerce Clause? Or is this just a peek into the rationalizations of Clean Line's Washington DC lobbyists? If every state was required to have identical laws, you might as well make transmission siting and permitting a federal process, right? I don't think that's the intent of the Commerce Clause.
8. "The Commission’s actions here are equally likely to paralyze the development of interstate electric transmission to deliver low-cost renewable wind power from high capacity states to states lack renewable energy resources. The Commission’s stated local interests, confined to protecting Missouri utilities and consumers, do not outweigh (and in no way justify) its demonstrated effort to isolate itself from a growing national concern over the lack of such transmission infrastructure by erecting a barrier against the movement of interstate commerce. Indeed, given the shipper-pays nature of the Project and the evidence regarding the cost impacts of the Project, there can be no detriment to Missouri consumers because they will bear no costs unless a utility determines that the benefits of purchasing energy delivered by the Project outweigh those costs. Similarly, no Missouri utility is compelled to buy power delivered by the Project if it isn’t lower than the cost of other resources."
Paralyze the development of interstate electric transmission? Hardly! Plenty of interstate electric transmission is proposed, approved and built through the regional planning process Clean Line chose not to participate in. Clean Line's proposals simply aren't viable, and the fault for that is entirely Clean Line's. What states lack renewable energy resources? I don't think there are any states that have no
renewable energy resources. It is not up to Clean Line to determine what kind
of renewable energy resources states build and use. That must violate some clause or another somewhere... And where's the "growing national concern over the lack of such transmission infrastructure?" I don't think Clean Line has provided any evidence of that. It's all just a bunch of vocabulary diarrhea. Blah, blah, blah, we're speaking for everyone else here and we
are what they want. I don't think the MO PSC was fooled by that, just like the people weren't!
9. "There can be no harm to Missouri from having another option to supply power. Any perceived detriment to landowners is mitigated by the law that provides them fair and reasonable consideration. If there is a detriment to landowners, it is drastically outweighed by the hundreds of millions of dollars of benefits provided by the Project, the thousands of jobs that it creates, and the immeasurable ways in which it would advance the national interest in clean, inexpensive, renewable wind energy."
Wow, there they go again, throwing Missourians under the bus for benefit of the "national interest" that Clean Line pretends to speak for. Who says the "national interest" outweighs the interests of Missouri landowners? Clean Line? Not.their.job. Where's the proof of the thousands of jobs and the "immeasurable ways"? Perhaps we could actually measure the ways in which Missouri would be harmed by this project? Actually, I think that's what the PSC did here! Nobody believes Clean Line is their altruistic economic electricity savior. Nobody. Save the drama for your mama (when you ask her to sign your petition supporting your project).
10. "It is clear that the Commission’s decision in this case was not even-handed, and that its exclusive and inaccurate focus on Missouri utilities, consumers, and landowners arbitrarily resulted in an application of the Tartan factors to the Company’s CCN Application that discriminates against the Project merely because of its interstate nature."
Actually, it was very even-handed. The Commission listened to both sides of the argument and was not swayed by Clean Line's propaganda and attempts to purchase support for its project. Nobody discriminated against Clean Line merely because of its interstate nature... it's simply a bad idea pushed by a bunch of disrespectful rich people for dubious economic reasons.
Block GBE-MO's Jennifer Gatrel hit the nail on the head when she characterized the company's request for rehearing as disrespectful:
“We continue to be disappointed by the lack of respect shown by Clean Line to landowners and citizens of Missouri,” opposition leader and farmer Jennifer Gatrel said Thursday. “They have been told no in every way possible and yet they persist in attempting to override the will of the people and the decision by our commissioners.”
You know it's a slow news day when...
The Federal Energy Regulatory Commission (Commission) hereby gives notice
that members of the Commission and/or Commission staff may attend the following
North American Electric Reliability Corporation
Member Representatives Committee and Board of Trustees Meetings
Board of Trustees Corporate Governance and Human Resources
Committee, Finance and Audit Committee, Compliance Committee, and
Standards Oversight and Technology Committee Meetings
The Ritz Carlton Toronto
181 Wellington Street West
Toronto, ON M5V 3G7
Honestly, I don't how they expect to attract anyone to this meeting
without golf outings, winery tours, massages, and hookers and blow in the Hospitality Suite. And then the heavies from FERC
show up. Way to ruin the party!
The media is calling both the House and Senate energy bills "boring."
The goal seems to be to pass an energy bill that doesn't do much of anything. For this, we pay these guys the big bucks!
Boring is much better than controversial, because honestly, these critters can get up to all kinds of hijinks when they're out of your sight in Washington, DC. Some of the more "controversial" stuff proposed earlier didn't make it into the bills that are currently being marked up, such as the "APPROVAL Act" bills introduced by the Arkansas delegation to neuter Section 1222 of the last energy policy act. Went nowhere. Nothing but hot air intended to appease angry voters. What a disappointment!
Anyhow, what IS in the bills that's of interest? Oh, there are a few things...
The House bill contains a section establishing an
Office of Compliance Assistance and Public Participation within the Federal Energy Regulatory Commission. This figurehead shall:
SEC. 4211. FERC OFFICE OF COMPLIANCE ASSISTANCE AND PUBLIC PARTICIPATION.
Section 319 of the Federal Power Act (16 U.S.C. 825q–1) is amended to read as follows:
‘‘SEC. 319. OFFICE OF COMPLIANCE ASSISTANCE AND PUBLIC PARTICIPATION.
‘‘(a) ESTABLISHMENT.—There is established within the Commission an Office of Compliance Assistance and Public Participation (referred to in this section as the ‘Office’). The Office shall be headed by a Director.
‘‘(b) DUTIES OF DIRECTOR.--
‘‘(1) IN GENERAL.—The Director of the Office
shall promote improved compliance with Commission rules and orders by—
‘‘(A) making recommendations to the Commission regarding—
‘‘(i) the protection of consumers;
‘‘(ii) market integrity and support for the development of responsible market behavior;
‘‘(iii) the application of Commission rules and orders in a manner that ensures that—
‘‘(I) rates and charges for, or in connection with, the transmission or sale of electric energy subject to the jurisdiction of the Commission shall be just and reasonable and not unduly discriminatory or preferential; and
‘‘(II) markets for such transmission and sale of electric energy are not impaired and consumers are not damaged; and
‘‘(iv) the impact of existing and proposed Commission rules and orders on small entities, as defined in section 601 of title 5, United States Code (commonly known as the Regulatory Flexibility Act);
‘‘(B) providing entities subject to regulation by the Commission the opportunity to obtain timely guidance for compliance with Com- mission rules and orders; and
‘‘(C) providing information to the Commission and Congress to inform policy with respect to energy issues under the jurisdiction of the Commission.
‘‘(2) REPORTS AND GUIDANCE.—The Director shall, as the Director determines appropriate, issue reports and guidance to the Commission and to entities subject to regulation by the Commission, regarding market practices, proposing improvements in Commission monitoring of market practices, and addressing potential improvements to both industry and Commission practices.
‘‘(3) OUTREACH.—The Director shall promote
improved compliance with Commission rules and orders through outreach, publications, and, where appropriate, direct communication with entities regulated by the Commission.’’.
What? Why isn't the Commission already doing these things? And more importantly, who does this Director report to? Sounds like he reports to Congress as their special FERC minion. Is this Director supposed to take the place of a consumer advocate at FERC, freeing up the resources of state consumer advocates to concentrate on consumer issues within their own states? If so, how come this Director has no real power, other than to issue reports and recommendations? How will this position be filled? Appointment? Hired by the Commissioners? Whose interests would this Director REALLY serve? Sounds like nothing but a feel-good figurehead sucking the taxpayer teat that produces nothing of use to consumers.
The Senate bill has a couple of items of interest, including a "Transmission Ombudsperson" who, unlike the House's FERC minion, serves only the industry, smoothing things over for companies who want to build transmission (or at least that's how the Senate thinks it will work).
- (b) TRANSMISSION OMBUDSPERSON.—
(1) ESTABLISHMENT.—To enhance and ensure the reliability of the electric grid, there is established within the Council on Environmental Quality the position of Transmission Ombudsperson (referred to in this subsection as the ‘‘Ombudsperson’’), to provide a unified point of contact for—
- (A) resolving interagency or intra-agency issues or delays with respect to electric transmission infrastructure permits; and
(B) receiving and resolving complaints
from parties with outstanding or in-process applications relating to electric transmission infrastructure.
(2) DUTIES.—The Ombudsperson shall—
(A) establish a process for--
(i) facilitating the permitting process for performance of maintenance and upgrades to electric transmission lines on Federal land and non-Federal land, with a special emphasis on facilitating access for immediate maintenance, repair, and vegetation management needs;
(ii) resolving complaints filed with the
Ombudsperson with respect to in-process electric transmission infrastructure permits; and
(iii) issuing recommended resolutions
to address the complaints filed with the
(B) hear, compile, and share any com-
plaints filed with Ombudsperson relating to in-process electric transmission infrastructure permits.
If this Ombudsperson ever exists, put him on your speed dial and complain regularly! Although he'll probably just sit around, take long lunches and frequent vacations because the federal government has a very narrow responsibility to issue electric transmission infrastructure permits. It's up to you to wake him up occasionally! Another do-nothing on the taxpayer dime.
Hey, but wait, perhaps if the section codifying Obama's "Interagency Rapid Response Transmission Team" (RRTT or "er-tit" as we dubbed it) makes it through, Ombudsperson will have more to do! The er-tit is supposed to "
expedite and improve the permitting process for electric transmission infrastructure on Federal land and non-Federal land." Again, very few federal transmission permits, but the er-tit is supposed to whip the federal agencies to approve the few permits they do have jurisdiction over faster, faster, faster! The er-tit consists of representatives from a laundry list of federal agencies, but has absolutely NOBODY watching out for the interests of consumers or landowners. Full-speed ahead for the er-tit and its industry flunkies! I shouldn't laugh... the original incarnation of the er-tit rammed through a federal process for the Susquehanna Roseland transmission line in Pennsylvania and New Jersey that cost ratepayers $60M, plus interest over the next 40 years, to pay off the demands of former Interior Secretary Salazar
. Let's hope the new er-tit behaves better.
So, anything can happen in the Congressional energy world, as the busy little bees try to add things (bad things? good things?) into these energy bills before the recess. How come the consumers don't have a lobbyist working for their interests on Capitol Hill? It's up to you to babysit these Congress critters!
The only news story to leak out of the Illinois Commerce Commission's three public hearings on Clean Line's Grain Belt Express project presents an opinion that is not factual.
"To bring Illinois forward in clean energy, we need dedicated direct current lines here in our state," said Taylorville's Patty Rykhus.
"Dedicated?" Dedicated to what? If Patty thinks Grain Belt Express is "dedicated" to clean energy, she's mistaken. Electric transmission is "open access," and even though Clean Line asked the Federal Energy Regulatory Commission for permission to give preference to wind generators when assigning capacity on its project, the Commission denied their proposal. Clean Line cannot be "dedicated" to any form of energy.
Does Patty think that HVDC lines bypassing Illinois will actually move "clean energy forward" in Illinois? Where might she have gotten that idea?
GBE spokespuppet Mark Lawlor tries to tell the reporter "In the first five years of this line being in operation it will reduce wholesale rates by $750M." Where's the proof of that, and why would he say such a thing?
First of all, the Missouri Public Service Commission recently examined the company's claim that the project would reduce wholesale rates in Missouri and rejected it.
The GBE production modeling studies do not support the GBE allegation that the Project would result in lower retail electric rates for consumers.
Let's hope the ICC does a similar evaluation. Lawlor goes on that way because the promise of lower wholesale rates is the ONLY reason the ICC granted the company a CPCN for their Rock Island Clean Line project last year. But the ICC did not find the project "needed,"
only that it might "...promote the development of an effectively competitive electricity market that operates efficiently...".
That still doesn't give Clean Line the eminent domain authority they seek in Illinois. Maybe Patty should educate herself before making statements on TV that aren't factual. And Lawlor should know better.
Dumping a whole bunch of "cheap" energy into a local market may have the initial effect of lowering prices through supply and demand, but Clean Line isn't selling electricity at wholesale. Its entire business model is based on power purchase agreements between generators in Kansas and east coast utilities. Lawlor leaves out quite a bit in his quest for the perfect (if not entirely factual) sound bite.
Big win for landowners in the story though. Landowner Clint Richter clearly articulates the problem of using eminent domain for purposes of enriching investors speculating in "clean" energy markets:
Shelby County landowner Clint Richter said that, "it's not that we're not for renewable energy, but we're against a private company coming in and taking land that's ours for their own private gain and I think that's what is really happening here."
WAND-TV's Ed Cross asked, "why is that such a concern?"
"Well it's a concern because I think all of us know what it's like to work hard to save up money to buy land to something that's special and important to you and to have someone come in and basically say 'hey I want that, I'm going to take that land, and I'm going to make some money off it,' I don't think that sits well with a lot of people," added Richter.
That's what the viewers will take away from this story. Way to go, Block-GBE Illinois!
In response to "stakeholders" following the trail of breadcrumbs that lead to 888 First Street, N.E., Washington, DC
, FERC's Office of Energy Projects has come out with a "Suggested Best Practices for Industry Outreach Programs for Stakeholders."
*sigh* Reads no better than any industry propaganda, beginning with its title. Was FERC really attempting to mollify the public and prove that it's acting in the public interest with this? FERC staff needs to take this brochure home to grandma and ask her if she thinks it was written in a conversational and informative manner. She'll probably buy you some gigantic, ugly, 1940's-style underwear next Christmas in response. Or knit you a suit jacket and pop into the office with cookies at random intervals to make sure you're wearing it.
FERC realizes that landowners are "stakeholders!" Yay! But it's all downhill from there. While FERC recommends involving "the public" early in the process on the first page, venturing further shows recommendation that the company involve local elected officials before landowners, in order to "sell" them on the project (while making campaign contributions?). In this way, the company can head off landowner concerns by indoctrinating the public's representatives in the "company way" so that when landowners find out about the project and turn to their local elected officials for help, there is none to be had. Of course, this is easily turned around with enough landowner (voter) pressure, making early elected official notification sort of useless.
There's also recommendations for a whole bunch of "stakeholder" meetings, where only selected "key stakeholders" are invited to participate. Landowners aren't invited to these, they only get to participate in public "open house" meetings, where they are presented with the project as a fait accompli. FERC supposes involving "key stakeholders" can "result in developing partnerships with special interest groups, municipalities, and community business organizations." Holy back room deal, Batman! Is FERC suggesting that a company buy cozy relationships with certain community groups that can benefit from the project so that they can throw the impacted landowners under the bus for their own profit, or for the simple benefit of making sure the project is not constructed in their own back yards, but in the back yards of others who are politically powerless or not participating in this process? Wrong approach!
This whole brochure fails because it's based on the "information deficit" model. It presumes that the only reason people oppose projects is because they lack enough information. It supposes that if a person is bombarded with enough "information" (propaganda) that they will acquiesce to having their lives turned upside down for benefit of others. It doesn't work. Never has. Never will. It actually increases the potential for entrenched opposition and local political battles.
FERC obviously doesn't notice that it has placed itself squarely in the corporate camp. Maybe they didn't intend to, but this brochure reveals who FERC identifies with... and it's not landowners. FERC presumes a proposed project must be built as proposed. FERC could use a crash course in how and why opposition develops. Come out of your ivory (city soot coated) tower! There's much to be learned!
Presenting the public with a project as a fait accompli is the first crucial mistake. Nobody likes to learn that a company, or their elected officials, or the Sierra Club, or the Chamber of Commerce, or the "good ol' boys" in their town (or even FERC... especially FERC) have been secretly developing a project that takes their property. People's property is sacred to them. You might as well show up with a plan to conscript our children. You'd never do that, right? But it's the exact same punch in the gut feeling when a landowner learns others have been conspiring to take what belongs to him.
If you really want impacted landowners to get on board with a project, you need to involve them in the decision making from the start. Instead of saying, "we need to build this," how about saying, "we have a problem and here are several ways to solve it, but we're open to suggestion"?
Only when the public gets some ownership of the decisions made are they likely to work cooperatively toward a solution. This is a still a democracy, right?
As if it's not bad enough that investor owned utility regional transmission organization cartels decide which of their members get to profit from building new transmission of questionable worth, now ITC thinks these cartels should take over transmission ratemaking from the Federal Energy Regulatory Commission.
In a Petition for Declaratory Order filed yesterday, ITC wants the Commission to rule:
1) that binding revenue requirement bids selected as the result of Commission-approved, Order No. 1000-compliant, and demonstrably competitive transmission project selection processes will be deemed just and reasonable when filed at the Commission as a stated rate pursuant to Federal Power Act (“FPA”) Section 205; and 2) that such binding bids are entitled to protection under the Mobile-Sierra standard, and may not subsequently be changed by means of a complaint filed under FPA Section 206 unless required by the public interest.
FERC's Order No. 1000 was supposed to open the doors to competition in order to make transmission cost competitive. RTOs are now supposed to consider costs when deciding who gets to build a project. Some, like PJM, require bidders to submit a total project cost with their bid. It is not subject to accuracy checks, so a company can submit a low bid to win the project, and then recover cost overruns. This makes the cost bid worthless. Other RTOs, such as MISO and SPP, require the bidder to submit yearly revenue requirements for the life of the project (40 years). Unlike a "total project cost" estimate of a project's total capital investment, a revenue requirement also includes the utility's return, Operations and Maintenance costs, taxes, and other costs to more accurately represent a ratepayer's actual cost. Of course, these revenue requirements are just estimates, actual rates may differ.
On top of that, competition has inspired transmission companies to offer not to exceed "cost caps," where a transmission company eats any overages. This serves to make cost bids more accurate and encourages the company to actually perform, instead of its usual apathy to cost concerns because the company is simply passing its costs into rates that someone else pays.
Good idea, right? Except when a cost cap and company performance actually makes the project come in under budget, ratepayers can reap the benefits of even lower rates. ITC wants that to stop. It wants to recover the full amount of its cost cap, even if it spends less. How rickety will transmission become once corporate greed and shareholder returns enter the picture? How many equipment cost and construction practice corners will be cut to decrease costs and increase profits?
Here's a better idea: Dangle a fixed reward of a percentage of cost underruns for the economical company when a project is successfully constructed, instead of encouraging them to adopt a culture of greed by proposing an endless cycle of cost cutting to increase profits. ITC's proposal is crap.
First of all, RTOs don't know diddly doo about rates and ratemaking and care even less. RTOs are NOT regulators in the public interest. They operate in the interest of their investor owned members. There is no real public involvement in any of their decisions, and more importantly, no due process for ratepayers to participate in examination of the rates proposed in the cost cap "revenue requirements" that ITC wants to lock in at the RTO level.
There's a whole lot that goes into ratemaking aside from known costs, such as the company's rate of return. How is an RTO supposed to decide that? In addition, only the Commission has jurisdiction over transmission rate incentives that can increase return. Does ITC propose that the RTO take over this process in order to set the return at a "competitive" rate decided through the bidding process? And what about incentives that don't have anything to do with rates, such as guaranteed recovery in the case of abandonment? Would those still be the domain of the Commission, or shall they delegate those to RTOs as well?
Message unclear. Ask again later.
Having the utility design its own rates in a "competitive" manner would do nothing but encourage collusion that results in rates that are not just and reasonable. No rate should ever be bullet proof.
Ask a transmission developer proposing a new transmission line and you'll get an answer in the neighborhood of 10 times the cost of an overhead line. (Example: $1B overhead = $10B buried)
Ask an engineer for a company proposing an underground project and you get an estimate that burial would double the cost of a similar overhead line.
(Example: $1B overhead - $2B buried)
I've been told both of these things. So, who to believe? Who might be exaggerating to serve their own purposes?
Apparently it only does "almost double" costs to bury HVDC transmission. That's what the Department of Energy concluded in its recently released draft environmental impact statement on the ill-fated Northern Pass project.
A complete burial of the Northern Pass transmission line would nearly double the project’s cost, but reduce potential negative impacts on the environment, tourism and local property values, according to a draft report released by the U.S. Department of Energy Tuesday.
While the proposed Northern Pass project — made up primarily of overhead lines strung between Pittsburg, N.H., and Deerfield, N.H. — would be the cheapest option at roughly $1.02 billion, it would also pose the greatest environmental and visual impact, the report says.
Four of the alternatives call for a complete burial of the transmission line. Another calls for partial burial beneath Interstate 93 through Franconia Notch, or along Routes 112 and 116 through the White Mountain National Forrest.
Five call for burial along existing roads and highways, options with the least environmental impact, the report says. All of the underground alternatives carry the highest costs, ranging from $1.83 billion to $2.11 billion.
But nowhere near a magnitude of 10 times the cost. Liar, liar, pants on fire!
In addition, a buried line provides significant benefits over its aerial cousin.
The visual impact, which includes “large industrial-appearing lattice structures,” could negatively impact New Hampshire’s tourism and recreation, the report says. And the proposed overhead route likely would cause the largest drop in residential property values and have the least economic tax benefit to host communities.
Putting the line underground, as opposed to overhead, lessens the impact on tourism, recreation, historic resources and the environment, the review says.
Burying the line requires less vegetation removal and has fewer effects on wildlife, including protected species. The buried lines are less susceptible than the overhead lines to damage from extreme weather.
Construction of the overhead line would generate fewer short-term and permanent jobs than an underground alternative, the report says.
But, the report says, blasting during construction would generate more noise than putting the lines overhead. And burial of the line would increase the potential for erosion.
Really? That's the only drawback? Noise from blasting? So, how much "blasting" would Clean Line need to do to bury its proposed transmission lines across Midwest farmland? Little to none? What if much of the additional cost of burial was tied to blasting up the "Granite State" to create trenches? And erosion? I think that could probably be handled. Once buried, out of site, out of mind, right?
C'mon, Clean Line, get with the program and re-engineer your projects as underground lines! How much have you spent (and moreover how much will you have to spend in the future) trying to get your lines permitted? It would have been much cheaper (in terms of both money and time) to have done the smart thing and proposed your projects as buried lines in the first damned place!
And don't give me any of that crap about how its technologically impossible to bury long lines. The engineer who gave me the spot on double cost estimate also told me there is no mileage limit. He's got a lot more cred than you do at this point...
How much does opposition cost? How much does buying support cost? How much does lobbying to change laws cost? How much are a whole bunch of contested eminent domain cases going to cost? How much do repeat or additional approval processes cost?
Clean Line says its currently proposed transmission line will only add something like 2.5 cents per kw hour to the 2.5 cent cost of wind energy. So, even doubling the project costs, it's still possible to deliver at 7.5 cents/kwh, right? Well, unless Clean Line has been lying about the delivered price of wind via its projects...
Maybe Clean Line's projects won't be "economic" enough to provide big returns to their investors without foisting some of its costs off onto bypassed landowners by taking land as cheaply as possible through condemnation and eminent domain?
We all know that the public's appetite for "green" energy only stretches so far as their wallet. When faced with increased electric bills for "green" energy, the majority of the public will snap their wallet shut and oppose it. So, why would this same public expect that Midwest landowners should accept economic sacrifice and burden to keep urban electric bills low? It's only appealing when its been greenwashed and politicized, and none of that nasty infrastructure gets planted in THEIR backyard!
And... this question bubbles up... why does the DOE's draft EIS for the Northern Pass include multiple routing options that require underground lines when DOE's draft EIS for the Clean Line Plains & Eastern project proposed NO underground options? Are the people and environment of Oklahoma and Arkansas worth less than those in New Hampshire? Or is it just that Northern Pass has gotten bigger, politically-connected, push back and top-notch legal help?
It's about time to recognize that the public will no longer accept the burden of overhead lines. Anywhere. There's a better way. "Green" energy costs more. Deal with it.
The ICC's press release
about the upcoming Grain Belt Express public hearings makes clear who should attend the hearings:
The hearings are set in communities in the western, central and eastern portions of the state in order to reach out to Illinoisans who would be directly affected by the proposed transmission line. As proposed, the line would run through Pike, Scott, Greene, Macoupin, Montgomery, Christian, Shelby, Cumberland and Clark counties.
Hear that, Clean Line? The hearings are for ILLINOISANS WHO ARE DIRECTLY AFFECTED BY THE TRANSMISSION LINES. They are not for bussed in, hungry, college students (which are at a premium during the summer months anyhow), and they are not for flown in company executives who stand to profit from supplying components for the project. They're probably not even for vans full of out-of-work union guys who have no specialized skills in building HVDC transmission lines.
So, there will be none of this:
And certainly none of this:
So, for those folks who ARE ILLINOISANS DIRECTLY AFFECTED BY THE TRANSMISSION LINES, this hearing "forum" is for you!
The forums will have two parts; the first part of the forum will be an opportunity for the public to provide oral and/or written comments into the record. This portion will last for 90 minutes and each speaker will have a 3-minute time limit. After the public comment portion, ICC staff will conduct an informal question and answer session.
The dates, times and location for the Public Forums are:
Tuesday, July 28 at 5 p.m. at the Pike/Scott County Farm Bureau office at 1301 East Washington in Pittsfield.
Wednesday, July 29 at 9:30 a.m. in the Pana Junior High Auditorium, 203 W. 8th Street in Pana.
Wednesday, July 29 at 4 p.m. at the Gerald R. Forsythe Performing Arts Center, Marshall Junior High School, 806 N. 6th Street in Marshall.
Don't let Clean Line steal YOUR seat at the forum! Arrive early, sign in with the clerk if you wish to speak, and take a seat.
Note to Clean Line: Don't embarrass yourself again. Just.Don't.Do.It.