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Invenergy Sues U.S. Government After Being Denied Handouts and Loses

5/30/2020

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Ut-oh, Invenergy!  The U.S. Court of Appeals recently upheld a lower court's ruling that not only is Invenergy not entitled to grant money it did not receive, it also must refund money it did receive under Sec. 1603 Grants, and pay the government's costs related to its unsuccessful suit.

You can read the court's opinion here.

In the smallest nutshell I can manage, Invenergy built a couple of wind farms and applied under Sec. 1603 to receive a grant of 30% of its costs to build the wind farms, in lieu of taking the Production Tax Credit.  Keep in mind that this is YOUR tax money the government was doling out under the American Recovery and Reinvestment Tax Act of 2009. 

The bigger Invenergy's cost to build the wind farm, the higher its 1603 grant.  One subsidiary of Invenergy charged the subsidiaries building the wind farms a "development fee."  For one farm, it was $50M.  For the other it was $60M.  This "development fee" was added to the total cost of the wind farm.  Well, the government decided Invenergy was not entitled to a grant for the full 30% of the development fee and paid it a lesser amount.  Invenergy decided to sue the U.S. Government to collect the entire grant it felt it was due.

Except those "development fees" didn't smell right to the court.  The fees were added on after the development was finished, and the fees were very non-descriptive and didn't detail the services Invenergy performed before they performed them.  It's like Invenergy performed the services and then after the fact came up with a nicely round number of how much those services cost.

To add further funk, the "development fees" were a sham transaction, according to the courts.  The amount of the development fees made a circular trip through Invenergy affiliate bank accounts in one day, and ended up back where it started.  Did money really change hands?  Or was it just transferred around to make it look like it changed hands?  Did the affiliates really PAY Invenergy those development fees, when Invenergy gave them the money to pay the fees with?  Invenergy to affilate and then back to Invenergy.  The affiliate paid nothing, but the cost of those payments were added to the cost of the wind farm and the amount of grant Invenergy thought it was due.

The court did not believe the "development fees" were real and therefore Invenergy was not due to receive 30% of them back.  Let's see... 30% of $110M is $33M.  Invenergy wanted $33M of your tax dollars for creating an after the fact "development fee" and transferring money around in a circle.

For its trouble, Invenergy has to give back the rest of the money it wasn't entitled to, and pay the government's costs to participate in Invenergy's legal temper tantrum. I can't figure out why the government initially paid them a percentage of this money in the first place, but Invenergy should have taken their ill-gotten gold and high tailed it in the first instance.  Instead, Invenergy decided to make a fuss and demand the full amount.

What an entitled corporation!  Someone's been feeding at the government teat way too long.  I wish our government would quit handing our tax money out to Invenergy.  And if Invenergy would treat our government like this, how do you suppose they're going to treat YOU?

Lesson:  Never bite the hand that feeds you.


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Missouri:  Eminent Domain and Sneaky Legislators

5/19/2020

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The Missouri Legislature's likeness to a murderous Roman senate took on new significance as the session expired on Friday.  It also served to unmask a bunch of legislators with hidden agendas.  Uncle Sigmund would be so proud!
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Do the legislators who abandoned their constituents to carry the water of a Chicago-based company really think they can slip back into their sheep costume so quickly and nobody will notice?  Not at all.  The unmasking was effective and complete.

We all know that the senate "Conservative Caucus Republicans" rose up against the eminent domain bill for inexplicable reasons.  Why?  Nobody knows (but be sure to check campaign contributions and lobbyist reports later this summer).  They stabbed it with their steely knives and they killed it dead.

But yet they still want their constituents to believe they are against eminent domain.  Instead of explaining their actions, they choose to try to get back into character as a supporter of "property rights."  Perhaps this will stick in your throat a bit, like it sticks in mine.  Senator O'Laughlin seems quite proud that she prevented the use of eminent domain for the "Hyperloop."  Because the hyperloop is experimental, highly expensive, uses private money, and is for benefit of people who want it, not everyone.

So let me get this straight... the hyperloop should not be granted eminent domain authority because it is experimental, highly expensive, uses private money, and is an elective project for benefit of voluntary customers.

What is Grain Belt Express?  It's a first of its kind (experimental) interregional HVDC merchant transmission project.  It's going to cost more than $2B to build, and will use money from private investors who will earn a healthy return on their investment.  Its customers would be voluntary and rates would be negotiated in a free market.

Same thing.  Exactly the same thing.  GBE is an unnecessary, private-use highway that will be a huge money-maker for its owner.

Why should eminent domain be allowed for GBE when it is prohibited for the hyperloop?  Hypocrites feel free to explain...

And now for the unmasking...  while some Senators liked to pretend they were for private property rights and landowner interests, they flipped the heck out when they found out they had passed legislation requiring Invenergy to pay a 50% "heritage" premium on strips of land taken by eminent domain for the overhead transmission project.  Slipped into a senate transportation bill, the legislation allowed county governments to make "heritage" designations of farms.  Any so designated farm required an extra 50% premium on fair market value if it was taken by eminent domain.  Consider this... GBE isn't taking entire properties, it's only taking a 200-ft. wide linear strip of land.  It wants to pay for the "value" of just that strip of land, and not for the value lost on the entire farm.  What GBE pays to take an easement is chump change.  Why shouldn't it have to pay 50% more to compensate the owner for the compromised heritage value of the entire property?  It actually sounds reasonable.

But the senate flipped out and called the bill back, squashing that idea.  They called it "sneaky."  Honestly, I think it's a lot sneakier to pretend you're for private property rights when you're actually working for an out-of-state company that wants to help itself to private property for the least cost.  These legislators actually disrespect landowners so much that they can't make GBE pay a small premium to confiscate their property.  They will let NOTHING get in the way of GBE taking your property cheaply so that it can build an extraneous transmission line for its own enormous profit.

When push came to shove, Missouri legislators chose Invenergy, instead of landowners, citizens, voters.  Remember that in the voting booth.

So, what's next?  Plenty of hurdles left on the field.  Time to circle the wagons.
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The Grain Belt Express StabGab

5/13/2020

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The Missouri Corn Growers Association's e-StalkTalk newsletter informs:
This week marks the final week of the Missouri legislative session for 2020. With a six-week hiatus in the middle of their normal work period due to COVID-19, both chambers returned to Jefferson City expecting to pass the budget, maybe some high-priority pieces of legislation, and little else. However, that is not the case. The state budget was passed on time and now sits on Gov. Mike Parson’s desk. Leadership and committee chairs have attempted to pull together many omnibus pieces of legislation with “noncontroversial” provisions to get through the process before the final gavel drops on Friday, May 15 at 6 p.m.

Two items of interest to Missouri Corn include a measure to rein in eminent domain and a separate provision to require higher blends of biodiesel to be included in diesel fuel sold in the state. Rep. Mike Haffner (R-Pleasant Hill) worked diligently with Rep. Don Rone (R-Portageville) to attach the biodiesel legislation on the House floor to Senate Bill 618, which is now in conference committee. SB 618 also contains the provisions related to eminent domain, which Missouri Corn also supports.

Sen. Justin Brown (R-Rolla) and Rep. Jim Hansen (R-Frankford) are the champions for the eminent domain legislation.

There was a debate on this provision on the Senate floor last week when Sen. Brown attempted to amend it on a bill. Much to MCGA’s frustration, several Republican and Democrat senators stood up to block the provision. This important legislation is also still attached to Senate Bill 662; however, this bill has not yet been assigned a conference committee. In addition to supporting these pieces, MCGA staff is working hard to safeguard against detrimental provisions during a time when tracking legislation and interacting with elected officials is challenging to say the least.
Say what?  Several Republican senators stood up to block the legislation?  Who are these senators?  Word is that they are the "Conservative Caucus Republicans."  According to this article:
The caucus includes Sens. Eigel, Hoskins, Cindy O’Laughlin, Andrew Koenig, Bob Onder, and Eric Burlison.
Why would these Republicans be blocking legislation opposed by big Democratic campaign supporter Michael Polsky of Invenergy?  If the legislation is blocked, Polsky will be able to increase his profits from the Grain Belt Express by acquiring private property cheaply using eminent domain.  I wonder if he will use his increased profits to fund future Democratic campaigns?  Maybe even future opponents of the Conservative Caucus?

What Polsky does with his riches isn't any secret.  Just Google Michael Polsky + Hillary Clinton to find out about Polsky's huge 2016 fundraiser for her at his home in Chicago.  $2700 per person. 
Hillary Clinton spoke Tuesday about meeting with "a big group of clean renewable energy businesses," without noting that these companies' leaders gave financial support to her campaign and received taxpayer subsidies through the stimulus program.
"I met yesterday in Chicago with a big group of clean renewable energy businesses and they're just ready to go," Clinton said on the campaign trail in Iowa. "But they need some help from the government.
The meeting was in fact a $2,700-a-head fundraiser at the home of Tonya and Michael Polsky, the CEO and president of Invenergy, and hosted by four others whose companies received "help from the government" in the form of $2.2 billion in taxpayer-funded cash grants to boost wind, solar and hydroelectric-based projects.

And why is Polsky such a huge Democratic supporter?
Polsky, who also threw a fundraiser attended by President Obama ahead of the GOP midterm victory in 2014, received over $662 million in funding to boost wind and solar projects by the firm — with various partnerships throughout the country receiving the funds.

Outside of Polsky, Clinton fundraiser hosts Gabriel Alonzo, Mike Garland and Jim Spencer received nearly $1.6 billion combined for projects to push forward renewable and wind-based energy production.

Overall, Clinton has been a backer of alternative energy, with an emphasis on solar, during the seven months of her campaign. In July, Clinton pledged to put the U.S. down a path to creating enough renewable energy to power every U.S. home by 2027. The former secretary of state also vowed to have installed over 500 million solar panels across the country by the end of her first term in office.

Clinton called Tuesday for extending the tax credits that make these projects "worthy of investment," arguing that many jobs will be created as a result.
Meanwhile, debate continues at the legislature.
Also Tuesday, a joint committee of representatives and senators decided that eminent domain restrictions that would prevent the Grain Belt Express energy transmission project from becoming a reality will remain in an omnibus utilities bill.

The Grain Belt Express, an energy transmission project that would extend from Kansas to Indiana, would run across Missouri through eight counties, according to the project’s website. As planned, it would deliver 500-megawatts of wind-generated power to Missouri’s electric grid — with some going to Columbia.

Senate Bill 618 would hinder the project because of a provision that restricts the use of eminent domain, which refers to the government’s ability to acquire private land when it is needed for public use as long as compensation is provided.

The bill says, “no entity shall have the power of eminent domain under the provisions of this section for the purpose of constructing above-ground merchant lines.”

Lawmakers said that the House was not willing to compromise or consider removing the eminent domain restrictions.

During the conference committee, Sen. Jamilah Nasheed, D-St. Louis, asked if there was a reason the eminent domain issue was included as part of the overarching utilities bill.  She said that she and others “may like the underlying bill” but wanted to do something different on the eminent domain question.

Rep. Jim Hansen, R-Frankfort, referenced the Missouri Supreme Court’s 2020 decision in favor of the Grain Belt Express project but emphasized that the court had not ruled on the issue of eminent domain. The Supreme Court “did not rule on whether or not they had the right to eminent domain,” Hansen said of the individuals pushing the Grain Belt Express project. “I think it’s our job to make eminent domain laws dealing with a project that this state has never seen before by a private company.”
He added: “Pass it. Let’s go to the Supreme Court.”
It's no mystery why the Democratic senator wants to "do something different on the eminent domain question."  It frees up some Invenergy profits to fund future Democratic campaigns in Missouri.  But why are conservative Republicans opposing it?

Rep. Hansen is spot on!  The Supreme Court did not ponder whether eminent domain was constitutional for GBE because there is no law yet and therefore the issue was not properly before them.  So, what's the harm?  Pass it, and let the Supreme Court do its job on constitutionality.  It's not the legislature's place to rule on this issue.  Each branch of the government has a distinct job.  It is the legislature's job to pass legislation wanted and needed by their constituents.  To hold up or outright oppose enormously popular legislation would make a Roman senate proud.
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Et Tu, Brute'?

The legislative session may end on Friday, but the landowners will long remember the harassment and eminent domain suits to come because some senators decided to work for the interests of Chicago-based Invenergy in 2020.

If you don't want to see it end this way, contact the Senators standing in the way of this legislation and let them know how you feel.  Do it right now!
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What's the Highest and Best Use of Your Property?

5/8/2020

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One day, you may find yourself harangued by a utility land agent, eager to purchase an easement through your property.

The agent may start out offering you the lowest value in the company's prepared, secret value range for easements on your property.  This number is derived from "market value" studies of similar properties in your area.  The utility conducts these studies for its own information.  Try asking to see the relevant market value study used to value your property and watch the agent dance. 

The market value study attempts to make a comparison between your property and others that have sold in the recent past.  But instead of using all data available, certain data is rejected.  Everyone knows that this "Garbage In, Garbage Out" magic math method is used to skew the results.

Once a company has completed its market study, your property is compared to the typical property and adjustments are made, either positive or negative, based on your property's own unique attributes.  If you've ever seen a property appraisal, it's the same basic concept.

The utility is comparing your agriculturally zoned property to another zoned the same way.  However, zoning could change to allow other possible future uses, couldn't it?

In some instances, a farmer's wealth is tied up in his land.  Instead of a fat 401(K) account stuffed with employer match, the farmer may rely on development or sale of his property to finance his retirement.  Building an overhead electric transmission line, or a buried gas or oil pipeline changes future possibilities for the property.  What once was a prime chunk of land for building new homes is now not suitable for that purpose.  How is the landowner compensated for foregone future use of his property when a land agent makes an offer?

He's not.  Consideration of factors like this, known as a property's “highest and best reasonably available use” under Pennsylvania law, only come into play when the value of your property is determined by a court during an eminent domain suit.  You may end up being more suitably compensated if you refuse all the land agent's offers.

Check out this case from Pennsylvania that was recently decided by the 3rd Circuit.  While the court found that the pre-taking valuation was too high, it was a matter of multi-family housing vs. single-family housing.  It wasn't a choice between agricultural and residential or commercial.  What was really interesting is the court's affirmation of the post-taking valuation which found that the easement materially affected the property's value for future development.  It found that the utility's authority to "approve" future land use in the easement gave the utility the ability to arbitrarily deny any future land use proposed by the property owner, and this affected the property's future value for development.

How might a transmission line easement across your property affect your future plans and take money out of your pocket?  Just one more reason to slam the door in the land agent's face.


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Grain Belt Express Burdens Landowners

5/6/2020

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Grain Belt Express is a merchant transmission project.  Merchant transmission is different from traditional transmission projects built by utilities and approved by regulators on a cost-plus, rate-of-return basis.  Utilities have captive customer bases, and new transmission necessary to serve their customers is paid for by the customers.  This is not a voluntary or elective action.  The customers are "captive" and must pay for the transmission as part of their service.  On the other hand, merchant transmission does not have a captive customer base.  Its customers are voluntary, and the rates they pay are freely negotiated between the customer and the merchant transmission owner.  The idea is that merchant transmission cannot impose its costs onto any person who does not voluntarily participate in its project.

Merchant transmission should not be granted eminent domain authority.  Eminent domain authority allows the involuntary condemnation of private property.  It allows the authority to impose involuntary costs on landowners who choose not to participate in the transmission project.  The landowner's property value is not freely negotiated between buyer and seller when the transmission company has eminent domain authority.  The price is capped at whatever the transmission company wants to pay.  If the owner doesn't accept the offer, the property is taken through eminent domain and the price paid is set by a court (or mediation).

Merchant transmission uses eminent domain to keep its land acquisition costs low, although it is not charging its customers on a cost-plus basis.  The benefits of acquiring land cheaply aren't flowing to the customers, they're flowing into the pockets of the merchant transmission owner.

Just in case you need to see this concept in action, take a look at the minutes of a February 5, 2020 meeting of the City of Columbia, Missouri Water and Light Advisory Board.

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Property rights could drive up the cost of Grain Belt Express.  But what does Columbia care?  Its negotiated rate cost through MPUA is fixed by a contract signed years ago.  Property rights will not increase Columbia's cost of electricity.  Respecting private property rights will only increase Invenergy's cost to build the project.  If Invenergy's costs to build the project go up, and its rates charged to Columbia stay the same, private property rights come out of Invenergy's profits, not Columbia's pockets.

Invenergy is the only one who benefits from eminent domain.

Eminent domain should NEVER be authorized for merchant transmission.  It does not benefit the customers or landowners.  It only benefits the for-profit transmission owner, Invenergy.
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URGENT transmission EMERGENCY!

5/6/2020

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The American Manufacturers (industrial consumers) had the nerve to ask FERC to extend the comment date for its NOPR on transmission incentives to 60 days after the national emergency is over, or Oct. 1, whichever comes first.  The American Public Power Association and a transmission users group supported the extension.

Investor Owned Utility front man Edison Electric Institute objected because delaying the comment deadline could eventually cause the economy to fail to recover and the lights to go out.  WIRES, transmission's trade group, agrees.  Just adding a couple months onto the time frame of instituting more profitable incentives creates an URGENT transmission EMERGENCY!

Here's your soundtrack for this post.  Turn it on.  Volume up!
You're not shy, you get around
You wanna fly, don't want your feet on the ground
You stay up, you won't come down
You wanna live, you wanna move to the sound
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Got fire in your veins
Burnin' hot but you don't feel the pain
Your desire is insane
You can't stop until you do it again
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But sometimes I wonder as I look in your eyes
Maybe you're thinking of some other guy
But I know, yes I know, how to treat you right
That's why you call me in the middle of the night
Picture
You say it's urgent
So urgent, so oh oh urgent
Just wait and see
How urgent my love can be
It's urgent
Picture
You play tricks on my mind
You're everywhere but you're so hard to find
You're not warm or sentimental
You're so extreme, you can be so temperamental
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But I'm not looking for a love that will last
I know what I need and I need it fast
Yeah, there's one thing in common that we both share
That's a need for for each other anytime, anywhere
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It gets so urgent
So urgent
You know it's urgent
I wanna tell you it's the same for me
So oh oh urgent
Just you wait and see
How urgent our love can be
It's urgent
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You say it's urgent
Make it fast, make it urgent
Do it quick, do it urgent
Gotta rush, make it urgent
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Want it quick
Urgent, urgent, emergency
Urgent, urgent, emergency
Urgent, urgent, emergency
Urgent, urgent, emergency
So urgent, emergency
Emer emer emer
It's urgent
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    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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