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22 Transmission Ideas + Free Government Cheese = Rat Infestation

4/30/2021

4 Comments

 
He's back!  Thought you were done with Michael Skelly for good when his Clean Line Energy Partners went belly up after wasting $200M of investors' money?  Sorry.  The smell of free government cheese was apparently too much for him.  He's back... as a "founder" of Grid United.  Grid United LLC was just created a couple weeks ago and registered in Delaware.  Gosh, where have we seen all this before?
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Isn't this the way the Clean Line money burner started?  I wonder if he's called up Jimmy and Jayshree to join him again?  So... what sparked this sudden interest to join the transmission world again after such a spectacular failure?

Free government cheese!  If you put out the cheese, the rats will come!

It appears that the people and corporations who will make enormous profits from overbuilding new transmission, along with "big green" non-governmental organizations who seek to fatten their own bottom line and reach their own political goals, have been elected to the White House.  It's no coincidence that the cabals seeking political power and riches beyond imagination have taken control of U.S. energy policy.  It's also no coincidence that the White House announced new actions to "upgrade America's power infrastructure" at the very same time that one of the cabals announced a new list of 22 "shovel ready" transmission projects.  It's quite clear who is in control here.  It's corporate interests.  The swamp has been rewatered and the creatures are multiplying.

Along with the 22 "shovel ready" transmission projects, the White House announced more than $8B of federal loan guarantees for "innovative" transmission projects.
“DOE is making financing available for projects that improve resilience and expand transmission capacity across the electrical grid, so we can reliably move clean energy from places where it’s produced to places where it’s needed most,” said Secretary of Energy Jennifer M. Granholm.
Holy Solyndra, Batman!  Gosh, what if Skelly could get his hands on $8B of free government cheese to spend on a new suite of Clean Line... err... Grid United... transmission ideas?  Since no private investor would be likely to give him another penny for his transmission ideas, it's up to the federal government to give OUR money away for Skelly to play with.  And where are those "places where it's needed most?"  I've been trying to get this meaningless platitude defined for years now without success.  I think it means turning rural America into an industrial power plant for urban needs.  For some reason, urban needs are "most" and rural needs are sacrificed.  Environmental justice?  No, just a bunch of hypocrites of the highest order who intend to place their energy infrastructure on precious farmland and through the backyards of hundreds of thousands of rural residents, even though these "peasants" won't get any benefit from it.  The DOE pretends that its free government cheese is only for "innovative" transmission projects, however the list of 22 "shovel ready" transmission projects includes mostly old technology  projects that have been bumping along unsuccessfully for decades.  There's nothing innovative here... overhead wires and hulking lattice structures hundreds of feet tall are something that Thomas Edison would recognize!  There are only a handful of quasi-innovative projects on the list -- those that are buried underwater or along existing rights of way.  And even then, they are based on the century-old idea of centralized generation and miles of transmission wire.  What's truly innovative?  This!  Distributed generation, making power where it's used, is our future however there is no free government cheese for this truly innovative new energy idea.

What projects are on the list?  Of course, Grain Belt Express makes the list, but it's not the project Invenergy is trying to build.  The project on the list includes the leg through Illinois, although Invenergy has announced that it only wants to build the portion through Kansas and Missouri.  It seems the "list" only includes Skelly's version of it.  Is he going to buy it back from Polsky?  Stab him in the back this time?  Completing Skelly's dream is the Plains and Eastern project.  It's on the list, although it was abandoned more than 4 years ago!  Is Skelly going to buy that one back from NextEra?  Adding to the mystery is the "new" Plains and Eastern's route.  It ends abruptly at the Arkansas border.  It does not continue through Arkansas to make the connection at Memphis that Skelly originally envisioned.  In fact, Skelly never envisioned a connection point at the Arkansas border.  What's there?  Is that a strong connection point where a gigantic 4,000 MW converter station can be built?  Nobody knows... it all seems like simple artwork fantasy.
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Observing the report’s map, Skelly said, “If you squint a little bit, you can see the beginnings of what would be a nationally connected system. Obviously, there are plenty of gaps here, but … if these lines get done, then we have the beginnings of a something” that could “grow organically into a national grid.”
Ahh, geez, if you squint a bit you can also see an infestation of fat rats swarming the cheese.  A squinting transmission plan and free government cheese?  Is this what now passes for national energy policy?  Stop the crazy!  But wait, there's more...
Among the projects are a few originally proposed by Michael Skelly’s defunct Clean Line Energy Partners, including the Grain Belt Express and the Plains & Eastern Clean Line.

“The reason we put these projects on the list is because they’re sited, and they’ve got interconnect agreements, and they’ve got studies; they’re ready to go,” said Skelly, now a senior adviser at Lazard, who joined ACEG Executive Director Rob Gramlich and several representatives of the listed projects’ developers in presenting the report.

Say what?  These projects have interconnection agreements?  That is a BIG FAT LIE.  Neither of these projects have signed interconnection agreements for both ends of the extension cord.  In fact, Grain Belt Express seems to be hedging its bets about where it will interconnect lately.  Will it be Ralls County?  Will it be Randolph County?  Will it be Indiana?  Invenergy says it has no idea.  No idea at all.  In addition, nobody knows what NextEra intends to do with the Oklahoma portion of Plains and Eastern that it purchased.  It's done nothing to make a new project out of the ashes of the old one.  However, Skelly's new cabal has some more policies it wants to put in place using its new perch at the White House.

Given the scale of transmission need discussed above, other policies to enable large-scale expansion of transmission over the longer-term are also needed.

Anchor Tenant

Legislation could be enacted to direct the federal government to directly invest in new transmission lines as an “anchor tenant” customer, and then re-sell that contracted transmission capacity to renewable developers and others seeking to use the transmission line. This would help provide the certainty needed to move transmission projects to construction and overcome what is called the “chicken-and-the-egg problem,” in which renewable developers and transmission developers are each waiting for the other to go first due to the mismatch in the length of time it takes each to complete construction.

FERC Transmission Planning and Cost Allocation Reform
The Federal Energy Regulatory Commission (FERC) has authority over how transmission is planned and paid for. FERC can use that authority to break the transmission planning and cost allocation logjams that are preventing large regional and inter-regional lines from being built. Legislation to direct FERC to use that authority could also be helpful.

Streamlined Permitting
While most authority for permitting transmission lines is held by states, federal agencies have authority over lines that cross federal lands. Steps can be taken to streamline and expedite that process, which can currently take a decade or more.

Hey, remember why Plains and Eastern failed in the first place?  It was because the TVA (federal power marketer) refused to sign on as an anchor tenant and be Clean Line's customer.  Skelly aims to fix that by requiring that the federal government hold the hot potato of transmission capacity nobody wants or needs.  The government would pay Skelly for his project and then maybe re-sell capacity to someone else as a middle man.  And if the government is as unsuccessful as Skelly at selling transmission capacity to a utility that wants it?  Well, then, no harm done.  The government can just continue to fund unneeded transmission that nobody uses... forever.  This is absurd, uneconomic and just plain stupid.

There's so much free government cheese here it makes my head spin!

Free transmission tax credits.
Free government loan guarantees.
Guaranteed purchase of new capacity.
New federal government siting and permitting.
Wider cost allocation so consumers don't notice how expensive it is.
New rate incentives for transmission.
New federal planning to increase transmission expansion.

It's like different branches of the federal government are trying to out-do each other by providing layer upon layer upon layer of new cheese handouts for transmission developers.  None of it is coordinated and designed to work together.  It's a buffet line of government handouts for transmission.  A tax credit here, a loan there, a customer contract on the side, a handful of new federal permitting authority, a bowl of new rate incentives.  This is the epitome of bloated, ubiquitous government controlling your life and your wallet.  Nose to the grindstone, little serf, we've got lots of big government to pay for!!

Let's take a sanity break for just a moment, shall we?  Nearly all of the 22 transmission projects on the "shovel ready" list are merchant transmission projects.  What are merchant transmission projects?  Merchant transmission projects are distinguished from those planned by traditional public utilities in that such projects assume all the market risks, and have no captive pool of customers from which to recoup the project's costs.  Merchant projects assume ALL market risk!  They pay for themselves.  They do not have any guaranteed stream of revenue from any captive customers.  Because they have no captive customers, they are not regulated.  Transmission with captive customers (such as the proposed federal government anchor customers, or perhaps the taxpayers who are paying for all the free cheese being handed out) must be regulated because the regulation serves as stand-in for competition in a free market.  You cannot allow these monopoly constructs to charge as much as they want when there is no competition.  But, yet, that is exactly what the federal government is now proposing.  It is proposing to make itself a captive customer of an unregulated monopoly.  It is proposing to make U.S. taxpayers captive customers of an unregulated monopoly.  If we're going to start handing cash and guarantees to merchant transmission developers, THEY MUST BE FULLY REGULATED!  When they are regulated they can no longer charge negotiated rates, and they must pass cost/benefit tests that guarantee consumers will receive more benefit than the project costs to build.  There must be a fully vetted reason to build them, aside from corporate profit.  You cannot hand public money to unregulated monopolies!

And let's end, for the time being, with a little irony, shall we?  After he flamed out in the world of transmission, Michael Skelly became an activist against highway expansion in his own hometown of Houston.  Let's take a look at his comments in a recent news article about the highway project:

Community opponents of the highway expansion said TxDOT’s only solution to ease traffic problems and congestion is to build more highways, which, besides allowing more cars on the road, also covers more city area with asphalt and concrete. This has considerably increased flooding in areas surrounding highways, many of which have suffered disproportionately since Hurricane Harvey in August 2017, they said.
Michael Skelly, a local activist with the Make I-45 Better Coalition, said TxDOT has consistently ignored residents’ input on project design despite several public hearings. “In 2015, a few of us residents got together and submitted our comments to TxDOT on a 2017 draft project,” he said. “It soon became clear they were not going to commit to anything.”

4 Comments

Moving Missouri Forward To New, Beneficial Solutions

4/23/2021

0 Comments

 
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The Missouri Senate Committee on Commerce, Consumer Protection, Energy and the Environment held a hearing on SB 508 this week.  Dozens of Missourians came from all over the state to voice their support for this important legislation.  They spoke from the heart.

But a handful of folks on Chicago-based Invenergy's payroll, along with some who think they may personally profit from using the solemn power of eminent domain to force the acquisition of private property for Grain Belt Express, were also on hand to deliver company talking points opposing the legislation.

Those company talking points were balm for uneducated and closed minds.  It wasn't about reality,  it was about providing cover for those who have already made up their mind to support the project.  Let's take a look at the pure nonsense of these talking points.

1.  The legislation is unconstitutional and will result in a $30M verdict against the state.

REALITY:  It's not Invenergy's place to dictate to the Missouri legislature about the constitutionality of legislation.  Of course they said that!  It's one of the only cards Invenergy has left to play.  Constitutionality is determined by the judicial system.  Invenergy lawyers (and others in cahoots with them) are not judges.  They say whatever benefits their position that they think dumb people will believe.  As if a lawyer for one side can pre-determine what an impartial judge would decide.  Lawyers are always trying to convince people that the side they represent is right.   However there are always two sides before a judge and one of them will lose.  Which one will it be?  That's for the court to decide.

The legislature's job is to craft law necessary to serve the state and its people.  In this instance, the legislature is closing a gaping hole in the state's eminent domain law.  The statutes that allow eminent domain for public utilities are old and never contemplated the rather recent creation of merchant transmission.  There was no such thing when the current statute was written.  Back then, public utilities served the public in the state.  Merchant transmission is not a public utility because it does not have an obligation to serve all persons who want service at the same rate.  Merchant transmission serves only those who bid the highest for its service.  Only those who pay the most are allowed to use the transmission line.  In addition, Invenergy has significant financial interest in electric generation, and there's little safeguard against favoring its own financial interest in selecting the project's users.  In fact, there's absolutely nothing stopping Invenergy from deciding not to sell service on Grain Belt Express at all and instead keeping all the transmission capacity for its own use as a private driveway across the state to move its own generation to higher priced markets.  Grain Belt Express doesn't have to allow any "public" in Missouri to use the project.  Do you trust that Invenergy will keep all its promises?  You know what they say... Marry in haste, repent at leisure!

Where are all the Missouri customers?  A handful of cities who were cut a sweet deal by old owner Clean Line Energy Partners in exchange for support at the Public Service Commission is only 10% of the service the company claims it could make available in Missouri.  Why are there no other customers?  I can't find where Invenergy has even opened another bidding window to negotiate with new potential customers in Missouri.  It's almost like they're not even trying to find new negotiated rate customers in the state.

The reality here is that a substantially similar law to limit eminent domain for overhead merchant transmission projects was signed into law in Iowa four years ago.  In that instance, the legislation was inspired by a different Clean Line project, the Rock Island Clean Line.  What happened after it passed?  Was it determined to be unconstitutional and was a $30M verdict against the State of Iowa awarded?  NO.  In that instance, Clean Line scrapped its project and moved on.  No court battle, no verdict.  If the legislation was so certain to be unconstitutional and worthy of such a huge payout, Clean Line would have taken it to the court.  But it didn't.  And it's not like Iowa even lost much when the project was abandoned.  In the wake of the new law, a better solution was proposed.  SOO Green Renewable Rail is in the process of developing an underground high-voltage DC transmission project built entirely on existing railroad rights of way.  The state still gets the "benefits" of new transmission without any of the impacts to private property.  Preventing eminent domain for overhead merchant transmission turned into a big win-win for Iowa!  Why would Missouri roll out the red carpet for a dated, invasive project when it could have the latest technology without any landowner impacts instead?

The Missouri legislature could accomplish the same thing by passing SB 508.  Invenergy's threats are empty.

2.  Grain Belt Express would prevent future blackouts.

REALITY:  Texageddon has become more than it was in order to use it to push new transmission for profit.  Dig past the shallow talking points.

First of all, Invenergy has not committed to building its project through Illinois and into the PJM Interconnection grid.  Lately, it's been claiming that it will only build the Kansas and Missouri portions of the project.  GBE's chances of being permitted in Illinois are far, far from certain, thanks to an Illinois Supreme Court decision in the Rock Island Clean Line case that questioned whether merchant transmission is even a public utility under Illinois law. 

However, Invenergy is pretending it can magically reverse its transmission project and suck power out of PJM on a whim.  The legal and practical ramifications of this are not even talked about, instead Missouri is being fed a glossed over fantasy.  Reality is that GBE's customers will own all the transmission capacity on the line... 100%.  Invenergy has not explained how it can commandeer that capacity back from the customers who own it in order to sell it to someone else for a different purpose.  In the Texageddon situation, which Invenergy spins for its own purpose, additional transmission would not have been useful.  Surrounding areas were also low on generation due to the weather event.  There simply was no power to be had.  Grain Belt Express is not for the purpose of "reliability," it's simply a profit center for Invenergy.  Building a DC transmission line with limited connection to Missouri's grid does not create reliability benefits.  If it did, the project would have been planned and ordered by one of the regional transmission organizations, such as SPP or MISO.  That it was not speaks to the lack of reliability "need" for GBE.

3.  The PSC and the Court has approved and upheld GBE's use of eminent domain.

REALITY:  The PSC shoehorned GBE into existing statute, although the statute did not contemplate merchant transmission and was a poor fit.  It's just the only statute that it had.  Ditto for the Court.  The PSC is a creature of statute.  It receives all its power from the legislature, not the other way around.  Likewise, Courts only interpret existing law, they do not create new law.  They have to work with what they're given by the legislature.  It is the Missouri legislature's job to craft the statutes that the PSC and the courts use for merchant transmission projects.  

Isn't it time for Missouri to update its statute to fit today's reality?  Opposing this legislation is nothing more than anchoring Missouri in the past where huge, outdated, overhead lattice transmission towers impede Missouri's agricultural progress and destroy the right to own and enjoy private property.  It is a wrong-headed obstruction to the possibility of a new, profitable energy future for Missouri.

Support SB 508!
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Evasive, Defensive, and Quarrelsome

4/16/2021

2 Comments

 
That pretty much sums up the demeanor of the Grain Belt Express witness and counsel yesterday during the Missouri Public Service Commission Hearing on a complaint filed by Missouri landowner groups.  The complaint alleges that GBE has materially changed the design and engineering of the transmission project that was approved by the Commission in 2019.

Grain Belt brought this on itself by its big announcement last summer that it was changing its project to deliver not just "up to" 500 MW of electricity to contracted customers in Missouri, but that it would deliver 2500 MW of electricity to consumers in Kansas and Missouri, a 5 fold increase.

The MO PSC Staff witness also seemed quite evasive and quarrelsome, taking forever to answer complainant's questions and concocting non-answers.  If there was nothing untoward going on here, the staff witness should not have had any trouble communicating and answering questions.  After all, he's supposed to be impartial, right?  Working in the best interests of Missourians, right?  Why did he sound like he'd just consumed a whole bunch of
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It wasn't just normal abnormal demeanor, because the demeanor changed when the judge was asking questions (but not necessarily the hedging and long thinking pauses).

Let's start with GBE's counsel who was just way too aggressive.  Counsel objected to witnesses, objected to evidence, insisted public information was confidential, objected to questions, and kept asking to have the case dismissed before it could even be heard.  Seems like odd behavior for a company who is doing nothing wrong, doesn't it?

Counsel told the PSC during its opening (38:33 on the video) that the design and engineering of the Grain Belt Express project would only be determined after construction.  In that case, why even bother permitting it ahead of time?  Let's just let transmission developers build whatever they want, however they want, and let them tell us about it after the fact. Iis GBE admitting it has no plan for its transmission project?  That it's just building willy-nilly without a plan?  It seems like GBE had a definite plan for design and engineering of its project at the time it filed an application back in 2016, and it had a definite plan when that project was approved by the Commission in 2019.  Now we learn that GBE apparently isn't following ANY plan whatsoever... just making it up as it goes along so that there is never a material change to its existing plan.  If there is no plan, there's nothing to change, right?

GBE counsel also had a whiny moment around 42:00, when it bleated angrily about complainants raising money for lobbying at the state capitol.  Nice to know that our contributions made GBE so angry, isn't it?

GBE counsel also made a change to stipulated facts submitted earlier.  He explained that the stipulation that no construction has occurred was no longer true.  GBE has begun construction, although he was really vague about it.  Since there is no plan, and design and engineering for the route is only 30% complete, (Kris Zadlo, 2:51) what the heck are they doing?  Constructing a single tower in each county, like a dog marking its territory?  Are Missourians supposed to be intimidated by that?  Or are they just symbolic "construction starts" meant to prevent the CPCN from expiring this year?  Those wind companies sure know how to pretend to construct things that they're not actually constructing in order to qualify for tax credits from the federal government, don't they?
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But, hey, guess what?  That's not how real transmission developers build projects.  They actually have checked and double checked design and engineering plans before they build anything.  They have their substation (interconnection) sites nailed down before any route design.  How could you design a route if you don't know the beginning and end point?  Once a real transmission developer begins building, it's a continuous line.  It saves the cost of transporting material and workers all over the place to construct random towers across the state.  It also ensures whatever it builds lines up correctly.  I'd hate to see how these guys lay tile... one piece here, one piece there, then hope you can fill in the empty spaces to complete the project?

But we really should give the evasive, defensive and quarrelsome trophy for the day to Invenergy's Kris Zadlo (or Zaldo, as the judge repeatedly referred to him).  Whatever his name is, he's not somebody you'd ever want to find answering your questions.

Zaldo said the GBE's press release announcing changes to the project was "a marketing exercise" to indicate GBE's openness to exploring the potential of dropping off more power in Missouri. (2:20).

Dropping off?  Like Door Dash or something?  The only "dropping off" would be if a customer contracted to take delivery at that point, right?  It's not like GBE is the Johnny Appleseed of free electricity.  So, is Zaldo saying that GBE was just trying to drum up customer interest in Missouri?  You'd think they would first want to sell the full 500 MW they first offered to Missouri, before trying to offer 5 times as much, right?  This whole "marketing exercise" thing rings hollow.  Maybe the judge should have asked him if his marketing exercise actually turned up new customers?

And, demonstrating just how argumentative he could be, Zaldo claimed just a minute later (2:21) that he never mentioned the press release.  He also claimed there is no design for the converter stations at all, and then claimed that the only material difference between a 500 MW converter station and a 2500 MW converter station was that "it would be bigger." (2:27). This guy's pretending to be an engineer?  I wouldn't let him build a lego set.

But perhaps the evasiveness reached its pinnacle when the questions about grid interconnections began.  GBE's counsel used plenty of interruptions, objections, and claims of confidentiality to try to derail this line of questioning.  Got something to hide, GBE?  Your behavior gives you away.

Zaldo finally admitted GBE had "multiple" interconnection requests at MISO.  When pressed to define "multiple" he said "about 5." (2:33:20).  When asked if all 5 were located at the original interconnection point for 500 MW, Zaldo waved his special magic cape of confusion once again. (2:35).  When asked if the other requests were significantly farther away... or at different places, Zaldo claimed they were not far apart because they're "all in Missouri."  Uhh... sport... Missouri is a big, BIG, BIG place.  Building a big converter station in Ralls County (original plan) is materially different than building a gigantic converter station in Randolph County (new interconnection request points).

Zaldo admitted GBE had "a couple" interconnection requests in PJM as well.  He couldn't recall the capacity.  (2:36)  Is that because the PJM interconnections had shrunk in size from the original plan?  Turns out GBE has only requested 2,000 MW of interconnection to PJM. Maybe, Zaldo isn't sure.  The original plan called for 3,500 MW and counted on the higher prices in PJM to make the project profitable enough to construct.  If GBE has cut its revenue from PJM by a significant percentage, does that mean that electric consumers in Kansas and Missouri would have to pay more in order to make the project marketable and profitable?  I thought Kansas ratepayers were not allowed to pay for ANY of the project without permission from the panacotta-fueled KCC?

At this point, GBE's counsel attempts to hand Zaldo a "safe word" to get out of a really tough interconnection question by claiming confidentiality. (2:38)  It didn't take long for Zaldo to use it.  And off they all went to a confidential break out session.

Really, GBE?  Your interconnection requests are public information on the MISO and PJM websites.  It may not have your name on it, but who else is requesting to make large HVDC connections along the GBE route?  We've known about your changing interconnection requests for quite some time.  Interconnection requests are not cheap, and they not frivolous actions that can be made and withdrawn with great frequency.  Changing interconnection requests indicate material change of plans.  Perhaps the most important thing about a transmission project is its ability to interconnect to the existing transmission system.  Without that interconnection, the project is nothing but a floppy extension cord not plugged in on either end.  No wonder GBE was so defensive, evasive and quarrelsome about changing interconnection requests.  That, perhaps more than any other evidence, demonstrates material change.

Parties will file post-hearing briefs by the middle of May, and the judge will make his recommendation afterwards. 

Let's hope the PSC finally recognizes that Invenergy *could* be scheming to string the state along while it builds a completely different project.  Maybe it could be a generation tie line for Invenergy's exclusive use to move its generation across Kansas and Missouri in order to sell it at a higher price?  Why would the PSC allow Invenergy to threaten landowners with eminent domain takings for such a project?  Why is Invenergy claiming to be constructing the project when it doesn't have all its easements?  Why has Invenergy not yet filed any condemnations?  Why is Invenergy hiding behind the old GBE project in order to use the threat of eminent domain against landowners?  It's a mystery.

An evasive, defensive and quarrelsome mystery.
2 Comments

Texas Isn't Buying What the Feds are Selling

4/15/2021

3 Comments

 
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Never let a good crisis go to waste.  A crisis is a gift to public relations professionals, and the very foundation of propaganda.  How can we spin this to achieve our goal?  That always seems to be the question.

Everyone knows that Texas suffered prolonged power outages earlier this year.  Those outages were caused primarily by unexpectedly cold weather that froze up electric generators and the natural gas infrastructure that supplies fuel to electric generators.  No one had to call in Sherlock Holmes to determine that the tragedy could have been prevented if the generators and natural gas supply had been properly winterized.  The generators were not winterized because Texas did not require it, preferring to rely on "market" to encourage generators to winterize on their own.  The Texas blackouts did not happen because transmission lines failed.

However, Texageddon is now being used by the federal government as an excuse to build a whole bunch of new transmission.
The White House cites Texas’ deadly power outages as a key selling point for a $2.3 trillion infrastructure package, leaving a clear – but potentially misleading – implication that Texas would get the billions needed to avert such catastrophes in the future.

As Energy Secretary Jennifer Granholm put it while pitching the plan at a White House briefing last week: “After what happened in Texas, can anybody really doubt that electricity and the electric grid is part of the foundation of who we are as a nation? And we need to invest in it if we want to make sure power keeps coming to our homes.”

For a president aiming to sell a gargantuan stimulus plan, the timing has been fortuitous.

“As you saw in Texas and elsewhere, our electric and power grids are vulnerable to storms, catastrophic failures, and security lapses, with tragic results. My American Jobs Plan will put hundreds of thousands of people to work… laying thousands of miles of transmission line; building a modern, resilient, and fully clean grid,” Biden said when he unveiled the plan March 31 at a carpenters training center in Pittsburgh.

The outage had nothing to do with the electric grid!  But that doesn't stop them from trying to sell that idea to an uninformed public.  The idea may loosely be that building a whole bunch of new transmission (20 GW worth!) and connecting it with Texas (like ALL of it?) would avert any similar crisis in the future.  There's a whole lot wrong with this idea, and The Dallas Morning News recently took a factually detailed swipe at this reprehensible fear mongering.  What a refreshing read!

First of all, Texas maintains an independent grid in order to avoid federal meddling in its electricity supply.  It is not connected to other states via high voltage transmission, and because it is not connected, it avoids federal regulation.  There is absolutely no way to connect any new transmission to Texas under the current scenario and it is questionable whether the federal government can force Texas to connect.  As the article puts it:
Texas can’t import that many electrons even in a crisis, thanks to decades of isolation from the two huge grids that span the rest of the country.

Ending that grid independence is a touchy subject in Texas. Biden’s plan doesn’t broach the topic.
Also, the entirety of the 20 GW of new transmission capacity proposed wouldn't have even covered half of the generation Texas lost.
In terms of keeping the lights on the next time Texas is walloped by an arctic blast, the most relevant idea is building 20 gigawatts of high-voltage power lines to provide “a more resilient electric transmission system,” using tax credits to leverage tens of billions in private investment.

That’s an expansion of capacity somewhere, not a promise to insulate Texas generating plants.

And 20 GW is less than half of what Texas lost during the February storm.
The propaganda tries to navigate over the fact that winterizing generators in Texas is not in the "infrastructure" plan at all, although the feds are trying to sell the plan as a solution to future Texageddons.

Of course it's not about giving merchant Texas generators federal money to winterize their plants.  Why should everyone else pay the cost of greedy Texas generator failures?  The generators made plenty of money, they just didn't choose to put it back into their systems in order to winterize.  The generators simply didn't CARE if that happened... they would only lose a few days revenue, and the likelihood of this happening was pretty much "once in a lifetime." 
Next, a bailout for Texas’ grid would hit resistance from states where utilities and their customers – not federal taxpayers – already made the investments needed to keep the juice on when the mercury plummets.

“Most Americans would not want to pay a higher tax if the ratepayers in Texas itself don’t want to pay,” said Geddes, the Cornell professor of policy analysis and management.

“The resilience of the grid should be borne by the user,” he argued. “If you pay for my bread, or my electricity, I might not be so careful about how much I consume.”

Historically, infrastructure of all types relies on user fees. Gasoline taxes of 18.3 cents per gallon go into the Highway Trust Fund, for instance.

There’s no equivalent “user fee” on electricity. Utility companies and ratepayers cover costs.
Why should we build trillions of dollars of new transmission on the off chance it is needed for a couple days every 100 years?  If the federal government bails out every investor owned utility when their lack of investment and maintenance in their systems causes blackout, why would any utility spend any money on their system?  Uncle Sam would be there to bail them out so they can keep all their profits and let their systems rot.  What a stupid idea!
During a briefing for regional news outlets on Monday with Buttigieg, Bharat Ramamurti, deputy director of the White House National Economic Council, maintained that whatever is invested would quickly pay for itself.

“The problems with our power grid are costing us $70 billion a year, according to the Department of Energy, and are costing lives, as we saw in Texas. We can make an investment in improving our power grid, and make up those $70 billion in a year or two,” he said.

Asked by The Dallas Morning News how much of the winterizing funds would go to Texas, he demurred.

“As with a lot of this, the goal here is to set out a vision and then work with Congress to determine some of the details,” he said.

Sasha Mackler, director of the energy project at the Bipartisan Policy Center, sees the vagueness at this stage as an invitation to haggling, rather than a shortcoming.

“They’re putting forward the goals and opening the door to congressional engagement,” he said. “It’s vague at this point by design.”
It's vague because it's not based on facts!  It's pure propaganda, and Texas isn't buying it!
3 Comments

The Assault on Rural America Has Begun

4/14/2021

1 Comment

 
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Have you ever really contemplated the crackpot conspiracy theory fleshed out on various TV shows that there is some secret entity actually running our country?  That elected officials are mere puppets of some secret global cabal?  Why is it that most of the wealth is concentrated within a very small group of people?  Does money buy power?  If you've ever wondered about these things, pull up a chair, this blog is for you...

Last week I told you about Biden's plan for investment tax credits for electric transmission lines, though there was actually little information to be had.  My Alexa must have been on the job reading my mind, because the very next day the text of new legislation introduced in Congress to make the transmission investment tax credit a reality was revealed.  Thanks, Jeff Bezos, what would I do without you and your AI spy?  If I can think it, you can deliver it!

Here's a link to the bill.  Go ahead, click through.  It's amazingly brief and facile.  Not what you'd be expecting for a complicated giving away of hundreds of millions of dollars of your money.  The real "guts" are contained in the IRS code -- this just establishes a transmission investment tax credit at 30%.  The IRS has to figure out how to run the program.  The legislation just sets the parameters for it, such as what kind of electric transmission qualifies for the tax credit?

Are you ready?
‘‘(c) QUALIFYING ELECTRIC POWER TRANSMISSION LINE PROPERTY.—The term ‘qualifying electric power transmission line property’ means— ‘‘(1) any overhead, submarine, or underground transmission facility which—
‘‘(A) is capable of transmitting electricity at a voltage of not less than 275 kilovolts,
‘‘(B) has a transmission capacity of not less than 500 megawatts,
‘‘(C) is an alternating current or direct current transmission line, and
‘‘(D) delivers power produced in either a rural area or offshore, and

‘‘(2) any conductors or cables, towers, insulators, reactors, capacitors, circuit breakers, static VAR compensators, static synchronous compensators, power converters, transformers, synchronous condensers, braking resistors, and any ancillary facilities and equipment necessary for the proper operation of the facility described in paragraph (1).


Power produced in a rural area?  So transmission for power produced in an urban area  cannot qualify for this tax credit?  You may be thinking that they don't need transmission for power produced in an urban area because it can be used where it's produced.  But think a little harder... this discourages any future power production in urban areas and encourages lots of future power production in rural areas.  It provides the carrot on a stick to a future where rural areas operate as the power production serfs that serve their powerful masters in the cities.  Power production in rural areas is encouraged through a giveaway of your tax dollars. 

But what if they used that money instead to develop power production in the cities and suburbs that use so much of it?  That would probably be a cheaper scenario, by far.  But our government is pushing for a different reality where the cities are mere power parasites feeding off the sacrifice of rural areas.

Let's peel this onion to see just how many layers there are to this bold plan to enslave rural areas...  and discover that they're not even trying to hide it anymore.  When the elites control every aspect of the narrative, plus the puppets who will carry it out, there is nothing to fear from plebeians.

This article in Renewable Energy Magazine ties this legislation to ACORE, the American Council on Renewable Energy.  Of course the legislators who are sponsoring this legislation are nothing but lobbyist puppets, doing what they're told.  If they don't buck the system, they are rewarded with campaign contributions that keep them in office.  If legislators don't do any real work writing or reading legislation, what do they DO all day?  Run around like remote-control robots making sure things happen like they are ordered to happen, preening for the cameras, feeding their egos.

ACORE put out a brief press release.  Very proud of themselves and their legislative puppets.  ACORE says this tax credit will serve their Macro Grid initiative.
“Sen. Martin Heinrich, Rep. Steven Horsford and Rep. Susie Lee’s introduction today of the Electric Power Infrastructure Improvement Act adds to the growing momentum for a federal transmission investment tax credit (ITC). As we saw this winter, America’s outdated grid infrastructure is hurting consumers and our economy. With a transmission ITC, we can enhance grid reliability, create jobs, save consumers money, and provide developers with the long-term certainty they need to invest in a 21st century Macro Grid that’s capable of delivering the clean energy future Americans want and deserve. We look forward to working with lawmakers on both sides of the aisle to pass this critically important legislation this year.”
So what, or who, is ACORE?  Here's a lovely photo collage of their rather extensive Board of Directors (for even more fun, there's also a doubly large Board of Directors Emeritus).  24 people on the BOD.  24!  How do they ever manage to get things done?  But, all that aside, look at who these 24 people are, and what "member companies" they represent.  NextEra, Pattern, Avangrid, Invenergy, Berkshire Hathaway -- all companies who stand to profit significantly by building new renewable generation and transmission to serve it.  The list also includes equipment suppliers of renewable energy technology and equipment.  But perhaps most disturbing of all is that it also includes lots of big investors such as BlackRock, JP Morgan, Bank of America, Morgan Stanley, Goldman Sachs.  And then there are some really odd, but powerful, additions, such as Facebook and Amazon.  Hang on... my Alexa is going crazy trying to take my order for renewables right now...

ACORE's mission pretends it's just an educational, tax exempt organization that doesn't lobby.
The American Council on Renewable Energy (ACORE) is a 501(c)(3) national nonprofit organization that unites finance, policy and technology to accelerate the transition to a renewable energy economy.
I guess they don't have to actually lobby... just place an Alexa in every legislator's home, office and car.

But isn't it funny that all these companies stand to make a bundle of money from new legislation that enables their business and profits?  And legislators get so "educated" about it that they write bills about things they know nothing about?  Wow!  Serendipity!

But wait... let's see what's in the next layer of this onion.  ACORE's Macro Grid initiative.  Who came up with that?  ACORE's 2020 Annual Report reveals:
Thanks to generous support from Breakthrough Energy, ACORE and Americans for a Clean Energy Grid (ACEG) launched the Macro Grid Initiative to promote investment in a 21st century transmission infrastructure that enhances reliability, improves efficiency and delivers more low-cost clean energy.
And is extremely profitable for ACORE's Board of Directors, don't forget that part.  Your beneficent pose isn't working for me.

Who is "Breakthrough Energy?"  Here's the layer where you really start to smell the rot that pervades this entire charade...
Breakthrough Energy Ventures is an investor-led fund that aims to build the new, cutting-edge companies that will lead the world to net-zero emissions.
Our strategy links government-funded research and patient, risk-tolerant capital to bring transformative clean energy innovations to market as quickly as possible.
Again, it's not about beneficence, it's about making money, lots of it.  And in order to do that, they have to influence government policies and programs at the highest level.

Even more revealing, take a good, close look at Breakthrough Energy's Board & Investors.

There you'll find some very familiar names... multi-billionaires you've heard of, along with a host of other filthy rich people from around the globe that you've never heard of.

The cast of characters includes:  Bill Gates, Michael Bloomberg, Jeff Bezos (Alexa, shut up, I'm trying to work here), and some Walton family members. 

And it also includes a huge list of other multi-billionaires from around the globe and includes members from Saudi Arabia, India, England, China, Canada, Germany, South Africa, France and Japan.  And China.  Did I mention China?

These folks who funded ACORE's Macro Grid initiative are intending to invest in renewable energy projects in order to get even richer.  But it's not just that... let's dial back out.

Where did the transmission investment tax credit first get mentioned?  In President Biden's "Infrastructure" thing.  Do you suppose he independently came up with that idea and it was just happy coincidence that it lined up with what the global elite wanted?

Or do these global elites, who control a substantial portion of the world's wealth, also control our elected officials?

Who really wants to make sure all energy of the future is produced in rural areas, and not in the cities?  Is it really about climate change, or is it simply a rent seeking operation?  And how would the .00001% distract the hoi polloi from their bold scheme?  Maybe they buy up the media, control the narrative, and create a crisis that pits the average American against his neighbor and uses up all their energy and attention fighting each other while the robber barons help themselves to what little wealth we have left.

So... transmission investment tax credits.... yes or no?
1 Comment

Updating an Old Law to Reflect Today's Reality in Missouri

4/13/2021

3 Comments

 
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Ever read something and feel that it made you dumber?  That's pretty much my summation of a news article and OpEd that recently appeared in Missouri, along with an article in a law school journal.  A law school journal?  Isn't that supposed to be an in depth examination of the law using facts?  The things they're teaching kids these days...

Let's start with the law journal piece, because it's just so much fluffy opinion.

Missouri’s Chance at Low-Cost Renewable Energy ‘Gone with the Wind’? in the St. Louis School of Law Journal uses references to opinion pieces to make its point.  Is that how current law students intend to win future court battles?  "Because Sierra Club told me this should be my opinion, therefore, it shall also be the opinion of the Court...".  All "facts" are unproven, one-sided claims and studies.  There is no balance here.  If this was a journalism student writing for the school newspaper, he should receive a failing grade.  But it's law, where reality is molded to support a desired outcome.  Works great unless there is an opposing side. And there's always an opposing side!  Maybe the author should have spent more time researching eminent domain and its requirement that property taken must be put into "public use."  Public use and public "benefit" are two separate things.  The public may not use  Grain Belt Express.  It's a privately owned project for the exclusive use of its selected customers.  Just because some wrongly believe it provides some economic public "benefit" does not mean it's for public use.  Building a Walmart in your Mom's backyard would provide economic benefits to the public, right?  Or how about a casino in your spare bedroom?  A McDonald's next door?  All businesses spur commerce, new taxes, and convenience to users, however we don't use eminent domain to site them.  It's not like anyone can come in off the street and sell its cheap Chinese goods at Walmart, sell their own burgers at McDonald's, or set up their own shell game in the casino's lobby.  That would be public use.  I hope the law school soon includes a class on the 5th Amendment, maybe some study of Kelo v. City of New London.  It's desperately needed before these new lawyers are unleashed on society.  This piece discusses political opinion, not the law.

Next let's look at this article in The Kansas City Star.  It also concentrates on purported "benefits" and opinion, not the law.  Granted, it is a newspaper, but the article is about proposed legislation to change the law.  Shouldn't they be concentrating on the law?  There's nothing in there that sheds any light on changes to the actual law, or why legislators and voters believe the changes are necessary.  It nothing but a trojan horse of "benefits" that aren't really necessary.  It toots loud and long about "reliability" benefits, claiming that GBE will bring "needed" reliability to the electric grid.  However, reliability is something studied, planned and ordered by regional grid operators, such as Southwest Power Pool (SPP) and Midcontinent Independent System Operator (MISO).  If you need new transmission for reliability, SPP or MISO will order it to be built.  GBE has not been ordered for reliability.  It is a merchant project planned by private interests for their own pecuniary gain.  Its only purpose is to make money for Invenergy.  It's "reliability" you don't need.  If you did, SPP or MISO would order it, but they have not.  It also makes some crazy claims about the ability to redirect the project to bring power to Missouri from Indiana, instead of the other way around.  Maybe that would work if it was a public access transmission line, but it's not.  GBE plans to sell 100% of its capacity to generators on the Kansas end of the line and load serving entities who supply power to consumers at the Indiana end of the line.  These entities would own all the capacity on the line for their own use.  The idea that MISO or SPP could commandeer this private use transmission line and use it to ship power from generators in Indiana to load serving entities in Missouri doesn't work.  How would the contracted customers be compensated for that?  What would happen if the load serving entities on the Indiana end of the line were counting on GBE's capacity to meet their own power needs, and GBE suddenly stopped delivering power and, instead, began sucking locally generated power out of Indiana for use by load serving entities in Missouri?  There's a lot more to this story that isn't told.  It's an idea that makes little sense but it is spoon fed to an ignorant public as possible.

The article also attempts to convince that we need to "upgrade" the wider electric grid, and GBE will accomplish that.  No, not even close.  Our current grid is often compared to an interstate highway, open for the public to use.  However, GBE is not a part of the wider electric grid.  It's a private toll road from Kansas to Indiana that charges a fee to its contracted users.  Only those contracted users can use the highway.  It does not provide benefit to communities crossed because they cannot use it.

In addition to providing a source of affordable, renewable energy to communities along the route, Invenergy says it expects to provide broadband capability to internet service providers — connecting as many as 1 million Missourians with high-speed internet.
No, it does not provide a source of energy to communities along the route.  And it doesn't provide broadband either.  Just putting broadband capabilities on the project does not connect communities along the route.  The communities would still have to make the connection and construct the "last mile" of infrastructure that makes the actual connection to users, and that's expensive.  Another "benefit" that's not useful.

And then perhaps we should consider the comments of Invenergy's Kris Zadlo, and maybe the MO PSC wants to consider them as well during its hearing this week regarding purported changes to the project.  Is Invenergy changing the project?  Depends on what day it is.  In some media, they claim they will build the project without the leg through Illinois that connects to Indiana, and increase the offering of capacity to Missouri.  But it tells the PSC it's not changing the project... and then it reverts back to the original project it had permitted for purposes of lobbying against new legislation.  Which is it, Invenergy?
Aside from Missouri’s proposed legislation, Zadlo said the project only needs final regulatory approval in Illinois before construction begins. It’s expected to be online by 2025, he said.
Invenergy has more personalities than Sybil!

Last, let's take a look at today's Op Ed from Senator Bill White in The Missouri Times (still pretending to be a news source?)

White claims that the legislation is unconstitutional because it changes the law.  Hang on a minute... is he saying that the legislature is prevented from changing the law?  The legislature's job IS to change the law! 

GBE was approved using a law that doesn't fit.  The MO PSC's authority to approve transmission and grant eminent domain was created before merchant transmission was invented.  The  law was written for public use projects that the PSC determined were needed for reliability, economic purposes, or to provide service to customers who don't have it.  Missouri doesn't have any laws regarding merchant transmission, therefore the PSC tried to shoehorn GBE into the existing law, even though it was a poor fit.  The current legislation amends the existing law to include provisions for merchant transmission.  Because merchant transmission is for private profit, and not for public use, it shouldn't receive eminent domain authority.  It is entirely within the purview of the legislature to update existing laws to fit today's reality, and that's exactly what the legislature proposes to do.  Senator White purports that Invenergy could sue the state for making new laws that frustrate its profits.  How ridiculous is that?  Why is Senator White inviting an out-of-state corporation to sue the state for making laws that benefit its citizens (but not necessarily foreign corporations)?  Does Invenergy want to invest more time and lots more money engaging in a long-term legal battle?  At some point, Invenergy needs to cut its losses and move on.  Either bury this project on existing rights of way to quell landowner opposition, or abandon this project entirely.  What would people in Senator White's district think if a merchant transmission project was granted eminent domain to take their land?  I don't think they would be any happier than landowners in other parts of the state.  White isn't thinking long term for the benefit of his constituents, he's only thinking about the immediate effects in his own backyard.  Not In My Back Yard?  Sure, great, let's build it!  How short sighted and self indulgent is that?

Every year about this time, Chicago-based Invenergy pours money and influence into Missouri in order to protect what it sees as future profits.  Isn't it about time for Missouri to shrug off out-of-state lobbying and make laws that benefit its citizens?  Support HB 527!

Why is this legislation needed?  Because existing eminent domain laws are dangerously out of date.  Changing old laws to reflect today's reality provides vital protection to Missouri's citizens!
3 Comments

Transmission Investment Tax Credits Make No Sense

4/9/2021

1 Comment

 
Infrastructure.  An increasingly meaningless word that you may associate with prosperity and new "free" things for your use.  Don't lose sight of the obvious... there's no such thing as a free lunch.

As part of a poorly planned boondoggle-to-be, our federal government wants to throw our money at merchant transmission, however it's ultimately going to be an exercise in futility.

Tax credits for new electric transmission.  What is that, exactly?  Do you know?  The proposal is completely devoid of details or any kind... I've been searching for over a week and I'm coming up empty.  Either there is no real and thoughtful plan to accomplish this, or the government is hiding its true intentions.  Tax credits for new electric transmission don't make sense, and they certainly don't fit into the reality of how transmission is funded and recovered through the electric rates we pay.  It's almost like the government has picked up the only tool at its disposal (money) and is going to try to use it to hammer everything in sight.

An investment tax credit would allow an investor in new transmission to recover 30% of its investment through tax credits.  Those tax credits would lower the investor's tax burden so it could pay less taxes.  Say an investor plunks $100M into a transmission project... he would receive a credit of $30M against his consolidated tax bill.  It's attractive because the investor could end up paying no taxes at all.  If he pays no taxes (or $30M less than he would otherwise owe), everyone else would have to pay more taxes to cover the government's income gap.  It's money directly out of your pocket given to big corporations who invest in transmission.  And it's not like they're not expecting to earn a hefty return on their $100M investment... they certainly are.  Nobody invests in something like transmission with the idea that the tax credit is their only reward.  To make matters worse, it is proposed that this tax credit can be monetized to create a tax refund for credits not used to reduce the investor's tax bill.  In the past, tax credits that could not be used because the investor didn't pay taxes in an amount equal to the credit were sold to other corporations who needed them to reduce their own tax burden.  But, like any secondary market for free government cheese, these credits were sold at a discount on their face value.  Perhaps a company would pay $10M for a $20M tax credit.  The tax credit did not have any cash value.  Now, however, a company with a $30M investment tax credit who could only use $10M to reduce its tax burden to zero would actually get paid the balance in the form of a $20M tax refund.  And where would that $20M come from?  You, Mr. Taxpayer.  It would come directly out of your pocket.

Now let's examine this tax credit and how it would work in the world of electric transmission.  There are two main types of transmission projects:  Cost Allocated projects, and Merchant projects. 

A cost allocated project is ordered by a grid operator and its cost is allocated among ratepayers in the region who benefit from the project.  A regionally ordered project is reviewed by an independent grid operator to make sure it meets some need, such as reliability, or market efficiency (making the cost of electricity cheaper).  This identifies the benefits and beneficiaries of the project, and informs the allocation of costs among ratepayers.  The developer assigned to build the project collects its cost to build from captive ratepayers using a "cost of service" rate scheme.  Cost of service means the transmission owner can only collect its cost to serve, plus a regulated return (profit, or interest) on its investment.  Its transmission rates are dependent upon the true cost of the project.  The cheaper the project is to build, the less it costs ratepayers.  One example is  land acquisition costs, which are a huge line item for new transmission.  If a transmission developer acquires eminent domain authority to keep land acquisition at low "market based" prices using the threat of condemnation against landowners who hold out for higher prices, it can hold its land acquisition costs to budget.  A lower budget flows through to the ratepayers who pay for the project.  If a transmission owner acquires property at a low price, the benefit of that low price flows through to consumers as lower electric prices.

Merchant transmission projects, on the other hand, do not require any independent review by grid operators.  A developer would propose a merchant project as a strictly for-profit endeavor.  The developer thinks it sees a fat pay day by moving electricity from an area with low electricity prices to an area with high electricity prices.  That way the cost differential could be leveraged as profit by selling a cheap product into an expensive market.  Because it is not reviewed and its benefits to captive ratepayers identified, a merchant transmission project is not cost allocated to ratepayers.  Instead, a merchant project collects its costs to develop and build through negotiated rates with voluntary customers.  A merchant proposing a project puts its new transmission capacity out for bid by potential customers, and sells the new capacity it creates to the highest bidders.  If a merchant sells its capacity at a price high enough to support the cost to build its project and still make a profit, then the project goes ahead.  The amount of profit a merchant can make is not regulated.  It can make as big a profit as its negotiated rates provide.  Therefore, a merchant's cost to build its project determines its profit.  Using eminent domain to lower land acquisition costs does not flow through to its ratepayers... it only increases the merchant's profit.  The negotiated rates stay the same whether the merchant acquires land at low "market based" rates, or pays the amount necessary for the landowner to sell without the coercion of eminent domain.  The only difference between these two scenarios is the amount of profit a merchant makes between its cost to build and the amount it charges in rates.

Because cost-allocated projects are ordered by regional grid operators, the transmission developer is isolated from any loss if a project does not get completed.  Cost-allocated projects are guaranteed to be reimbursed to their owners even if they are abandoned.   The captive ratepayers would be forced to re-pay a cost-allocated transmission developer.  However, merchants have no captive ratepayers and therefore no ratepayers to cover its cost in the event of abandonment.  If a merchant transmission project is not built or completed, its owners absorb the loss.  They are not getting their investment back because they never delivered anything to contracted customers.  Therefore, merchant transmission developers are taking a huge risk that their investment may never produce any return, and in fact, may disappear entirely. 

That's exactly what happened to the investors in Clean Line Energy.  Various investors sunk around $200M into the development of Clean Line projects and lost every last penny.  Merchant transmission is inherently more risky because the investment is not guaranteed.  Would a 30% investment tax credit encourage investors to take more risks on merchant transmission?  For a failed project, the investor would still lose 70% of its investment.  I'm not sure that would make a big difference to me if I was investing that kind of money.

And let's look at how an investment tax credit would be applied to cost-allocated projects with regulated rates.  Cost of service rates pass on the utility's cost to provide the service.  This includes any taxes the utility pays.  Taxes are passed through to ratepayers.  Therefore, tax credits are also passed through to ratepayers.  However, utilities may bank credits and use them over a longer period of time.  Turning those credits into tax refunds does nothing for utilities recovering their costs through rates.  In addition, big utility conglomerates often pay little to no taxes by leveraging their different businesses into one consolidated tax bill.  A recent list of corporations who pay no taxes was flush with utility companies.  In fact, utilities were the greatest percentage of non-taxpaying companies.
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What use do corporations who already don't pay taxes have for more tax credits?  I guess they could sell them at a discount... but that doesn't necessarily encourage them to invest in more transmission.

Who is this investment tax credit for, exactly?  Seems more geared toward merchant transmission projects, but the reality is that tax credits will do little to ameliorate the investment risk of merchant transmission. 

The biggest risks for merchant transmission are finding customers and getting their projects permitted.  Investment tax credits do nothing to solve these problems.  It's just a giveaway; a government boondoggle that's going to increase your own tax burden.  The government is lying to you by asserting that investment tax credits for transmission are going to spur new investment in transmission.  There's plenty of new transmission investment happening already.  Major U.S. electric utilities spending increased to $40 billion in 2019 from $9.1 billion in 2000, according to federal officials.

Is transmission investment really a "problem" that needs to be solved?  The Federal Energy Regulatory Commission already provides financial transmission "incentives" designed to increase transmission investment.  In fact, FERC has put new transmission incentives on its monthly agenda for next week.  How would FERC's incentives work with investment tax credits?  Do we really need two different systems of financial incentives?  The issue may be that FERC's incentives are paid by captive ratepayers.  They don't work for merchant projects.  Is the government trying to create handouts for merchant projects?  Perhaps one of the most distinguishing characteristics of merchant projects is that they cover their own costs and recover them through negotiated rates with voluntary customers.  Nobody is "on the hook" to pay for merchant projects, therefore they escape scrutiny and regulation.  If we're going to start handing taxpayer funding to merchant transmission, perhaps it's time they become regulated to rein in their profits?

There ain't no such thing as a free lunch.

And there is no way siting and permitting issues will be ameliorated by increasing corporate welfare.  Tax credits also will not compel utilities to become voluntary customers of merchant transmission.  Lack of customers was the biggest reason Clean Line Energy Partners failed.  You can build it, but they may not come.  Merchant transmission looks to distribution utilities for a customer base.  However, many local distribution companies are owned by large utility conglomerates that also build and own transmission.  Why would they want to pay for merchant milk when they could own their own cow?  If a distribution company needs new transmission, it's more likely to favor new transmission built by affiliates.  Because transmission is such a cash cow, utilities would rather build it themselves than pay someone else to build it.

But wait... there's another shoe that is in the process of dropping.  Our government also wants to create a new "Grid Deployment Authority" at the Department of Energy that will enable lots of new transmission.  Another bright idea without much description.  But that's a topic for another day...

1 Comment

    About the Author

    Keryn Newman blogs here at StopPATH WV about energy issues, transmission policy, misguided regulation, our greedy energy companies and their corporate spin.
    In 2008, AEP & Allegheny Energy's PATH joint venture used their transmission line routing etch-a-sketch to draw a 765kV line across the street from her house. Oooops! And the rest is history.

    About
    StopPATH Blog

    StopPATH Blog began as a forum for information and opinion about the PATH transmission project.  The PATH project was abandoned in 2012, however, this blog was not.

    StopPATH Blog continues to bring you energy policy news and opinion from a consumer's point of view.  If it's sometimes snarky and oftentimes irreverent, just remember that the truth isn't pretty.  People come here because they want the truth, instead of the usual dreadful lies this industry continues to tell itself.  If you keep reading, I'll keep writing.


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