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Congestion is Fleeting, Transmission is Forever

8/26/2018

The Baltimore Sun published an editorial last week calling for a pause and re-evaluation of the Transource Independence Energy Connection transmission project.

Do we really need it?

Elected officials, including Maryland Governor Larry Hogan, Maryland General Assembly Delegates Szeliga and Reilly, Pennsylvania House representatives Kristin Phillips Hill and Stan Saylor, have all joined citizens of both states in calling for cancellation of the IEC project.

This project never was a good idea in the first place. It was PJM's first competitive market efficiency project, where PJM floated a congestion "problem" and eager transmission owners (and wannabe transmission owners) submitted ideas for solutions they could build if selected. PJM selected what it felt was the best idea, and four years later here we are. Four years. That's a long time in the energy world, where needs are constantly fluid. Generators going on and off line, transmission upgrades, and changing load constantly alter the need for new transmission. Attempting to make a changing market "more efficient" by adding new transmission, and then waiting more than six years to actually bring the new transmission online is an exercise in futility. It's nothing but a cash cow for the transmission company lucky enough to be guaranteed to recoup its investment (plus interest) in such an unnecessary pursuit. PJM's market efficiency competitive transmission process is deeply flawed and can probably never work. Transmission just takes too long, while the "congestion" proposed to be alleviated is a constantly changing and fleeting issue.

The PJM Market Monitor (MMU), Monitoring Analytics, issues yearly reports that cover congestion in the region, along with other issues to make a determination whether PJM's markets are competitive. The MMU's function is to monitor and report on PJM markets and make recommendations to keep markets competitive. PJM is regulated by the Federal Energy Regulatory Commission (FERC). The MMU describes congestion:

Congestion is neither good nor bad, but is a direct measure of the extent to which there are multiple marginal generating units dispatched to serve load as a result of transmission constraints. Congestion occurs when available, least-cost energy cannot be delivered to all load because transmission facilities are not adequate to deliver that energy to one or more areas, and higher cost units in the constrained area(s) must be dispatched to meet the load. The result is that the price of energy in the constrained area(s) is higher than in the unconstrained area.

Congestion cannot ever be completely eradicated. Lowering congestion in one area may increase congestion elsewhere. Building expensive, new transmission projects to lower congestion in PJM sub-regions is not the answer. Sometimes the answer is incremental upgrades to existing transmission, or the building of new generators closer to load. PJM does not order the construction of new generators. PJM does order the construction of new transmission. And when the only tool you have is a hammer, every problem becomes a nail. The MMU has made the following recommendation every year:

The MMU recommends the creation of a mechanism to permit a direct comparison, or competition, between transmission and generation alternatives, including which alternative is less costly and who bears the risks associated with each alternative.

But PJM has yet to adopt this recommendation. The millions of dollars wasted on the Transource IEC should become a catalyst to get this done now. Would new generation in the DC/Baltimore/No.Va. area be cheaper than construction of a greenfield transmission project in Pennsylvania and Maryland when all the costs to the new transmission area that will not benefit from the project are figured in? Maybe, but we'll never know. PJM refuses to even acknowledge these costs, preferring instead to limit its "cost" of the project to actual dollars spent building the project and making low "compensation" payments to landowners affected. But what about the increase in energy costs to those customers? What about the economic costs to those communities from shouldering the burden of new infrastructure? What about the devaluation of land and conservation easements that the communities have invested in with taxpayer dollars? None of that is figured in by PJM. It's high time true costs are calculated for communities that receive no benefit from new "fly over" transmission projects that provide little to no economic benefit. The benefit to the whole cannot continue to overrule the disadvantages to individual communities.

Attempting to monkey with congestion is an attempt to levelize prices across a region. Should the same energy costs to customers near a coal-fired generator in Pennsylvania be available to customers in Washington, D.C., who closed all their dirty electricity generators years ago? Shouldn't there be a price to pay for that? If congestion relief lowers prices in Washington, D.C., then prices must rise elsewhere. Think of it as a teeter-totter. As prices fall somewhere, they must go up somewhere else. The MMU says:

For example, congestion across the AP South Interface means lower prices in western control zones and higher prices in eastern control zones. Load in western control zones will benefit from lower prices and receive a congestion credit (negative load congestion payment). Load in the eastern and southern control zones will incur a congestion charge (positive load congestion payment).

If you reverse that, no more congestion credits in the western zones. Everybody pays the same price in both eastern and western zones.

The MMU's annual State of the Market Report has a section devoted to congestion costs tracked over the year, as well as an analysis of current transmission planning.

Let's take a look at the MMU's tracking of congestion costs over the past 10 years:

The 2014 State of the Market reported AP South as the biggest congestion constraint in the region.

The AP South Interface was the largest contributor to congestion costs in 2014. With $486.8 million in total congestion costs, it accounted for 25.2 percent of the total PJM congestion costs in 2014.

And in a knee jerk response, PJM opened its competitive market efficiency transmission window seeking proposals to mitigate the constraint. Transource IEC was the winning bid.

Fast forward 4 years and the 2017 State of the Market reported

The Braidwood - East Frankfort Line was the largest contributor to congestion costs in 2017. With $43.4 million in total congestion costs, it accounted for 6.2 percent of the total PJM congestion costs in 2017.

This constraint is nowhere near AP South. It's out in the far western part of the PJM region. The AP South congestion has fallen to 6th place on the congestion list with a total of $21.6M, or 3.1% of the total PJM congestion cost. Do we need a $320M transmission project to fix this (plus 10.4% interest yearly on the unpaid balance for a pay-back period of 40 years)?

Of course we don't. But the last one to realize this seems to be PJM. If PJM is so slow to react to changing energy markets, perhaps it shouldn't plan and order market efficiency projects that take more than 6 years to come to fruition. Perhaps it needs to adopt the MMU's long-standing recommendation to change the way it evaluates congestion fixes. Perhaps PJM is simply in love with its processes and has forgotten its mission to benefit consumers.

It's time to cancel the Transource Independence Energy Connection.

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Miss Kitty Hamm Analyzes a Missouri Supreme Court Decision

8/15/2018

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Miss Kitty Hamm fancies herself a leading member of the Feline Bar. Miss Kitty Hamm is an amazing cat who not only can read, she can type for brief periods of time after consuming a certain pungent herb from her human servant's garden. Miss Kitty Hamm got her dander in an uproar this morning after looking over my shoulder (really sitting on my keyboard) while I was reading a story in a fake news source. Miss Kitty Hamm suddenly hissed and raced into the garden. The following is what happened next.

For the love of a catnip mouse and a bowl of warm milk, my dear Hansy-poo!

The Missouri Supreme Court opinion did not say:

“What (the justices) said is that the only public interest determination to be made in Missouri is by the Public Service Commission,” said Hans Detweiler, vice president of development for Clean Line Partners. “So the counties… should not be making their own public-interest determinations. They should only look at engineering questions.”

The Missouri Supreme Court opinion said, and I quote:

Further, Grain Belt acknowledges it will be required to obtain county assent pursuant to section 229.100 if it intends to construct utilities impacting publicly owned roads. The provisions in that section, however, are not relevant to the Commission’s decision-making process in issuing a line CCN. Section 229.100 does not purport to give counties the authority to stand in the shoes of the Commission in determining whether a proposed utility project is in the public interest of the state or whether a utility should be granted a CCN. Other than providing that county assent must be obtained prior to beginning construction when county roads are impacted, section 229.100 is silent as to timing, order of priority, or any other reference to section 393.170 covering the Commission’s authority to issue CCNs. The Commission erred in relying on ATXI in denying Grain Belt’s application based on its failure to first obtain assent from impacted counties. Admittedly, Grain Belt will need to obtain such assent before it can begin construction if county roads will be impacted, but county assent is not required prior to the Commission issuing a line CCN.

What a catasstrophy! The Court didn't say anything about limiting the county's authority to engineering questions. It said counties are not granted the authority to "stand in the shoes of the Commission" in making a public interest determination in Sec. 229.100.

In Feline Law School, we were instructed that the plain language of a statute limits its intent to what is actually written. A court may not substitute its own judgement for the plain text of the regulation. A court may not presume additional text that is not in the statute in order to assume what the legislature meant. The court was very careful not to interpret Sec. 229.100 in this order.

Let's look at Section 229.100:

2011 Missouri Revised Statutes
TITLE XIV ROADS AND WATERWAYS
Chapter 229 Provisions Relating to All Roads
Section 229.100. Improvements along public roads--location--control.
Improvements along public roads--location--control. 229.100. No person or persons, association, companies or corporations shall erect poles for the suspension of electric light, or power wires, or lay and maintain pipes, conductors, mains and conduits for any purpose whatever, through, on, under or across the public roads or highways of any county of this state, without first having obtained the assent of the county commission of such county therefor; and no poles shall be erected or such pipes, conductors, mains and conduits be laid or maintained, except under such reasonable rules and regulations as may be prescribed and promulgated by the county highway engineer, with the approval of the county commission.

The first phrase says no electric lines may be constructed on under or across public roads without having first obtained the assent of the county commission. It does not specify what requirements must be met to obtain assent. It simply says counties must assent before construction. It does not limit or dictate the criteria a county may use to consider assent. The court said a county may not "stand in the shoes" of the PSC in making a public interest determination. The PSC's authority to make a public interest determination is a completely different statute. I'm pretty sure no county ever claimed it could overrule (or stand in the shoes of) a PSC's determination of public interest.

Now the second phrase of 229.100 adds (with the word, "and") that a county highway engineer may make reasonable rules and regulations for road crossings, and said crossings must receive county assent.

Nothing in that statute says the county MUST task its county highway engineer to promulgate rules, and that a county MUST assent to said rules.

Therefore, my dear Hansy-poo, my cat-clusion is that the counties are still in the cat bird seat. They never have to assent. There's no point in giving them the power of assent if the statute were written to require them to assent. That text is simply not to be found in the statute.

Clean Line finds itself in much the same situation I always find myself in when I rub the can opener vigorously and it continually fails to produce an open can of tuna, yummy yummy tuna. Clean Line just spent a bunch of time and money to still be tangled up in Sec. 229.100 and still needing county assent. Clean Line is right back where it started. Might it not have been quicker and cheaper to simply attempt to gain county assent and forego the trip to the Missouri Supreme Court? With county assent, the PSC would have issued a permit for GBE. Why must you always do things the hard way, Clean Line? Now you're out of time and out of money.

And I dare say you've further entrenched county resistance to your project with all this drama, and now you're trying to strong-arm the counties by making up things the Supreme Court never said? I find that purr-fectly ludicrous. If cats could laugh, I would be hissterical. Just know I'm laughing on the inside.

There's probably not enough ham and pulled pork in the state to convince all the counties to assent. However, I encourage you to try. Please let me know when the first meal is served. You're going to need some help consuming it all.

And what are you doing as the new spokeshuman for Grain Belt Express, Hans Detweiler? Are you the only former Clean Line employee who has yet to find gainful employment elsewhere?

And furrthermore...

Well, I guess that's it for now...

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Transmission Company Employee Thinks Opponents are Merely Greedy

8/10/2018

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What better demonstration of the Peter Principle than within the hierarchies of investor owned utilities? The Peter Principle, simply stated: "In a hierarchy every employee tends to rise to his level of incompetence." Bloated behemoth American Electric Power demonstrates its love of the Peter Principle every day, with more levels of unnecessary management than a multi-level marketing scheme.

But American Electric Power isn't alone in this. I've noticed it at every utility and call center I've ever had the pleasure of disagreeing with. The mid-level manager... dumb as a box of rocks! What do we do with dumb people? We promote them off the front line where they tend to embarrass us, and give them a nice corner office where they can direct their incompetence into meaningless managerial tasks.

American Electric Power withdrew their application for cost recovery of their now cancelled Wind Catcher project the other day (although they want the OCC to bless their settlement agreement with Oneta Power -- how does the OCC approve a settlement agreement for a withdrawn proposal?). Also on the docket were a collection of public comments that had been gathered before the proposal tanked. One last look at the battling form letters and other creative ways AEP tried to make its misguided proposal look popular and therefore worthy of approval. Amid the postage-paid postcards and hand-written letters from landowners opposed to the project were two absolute gems signed by AEP/PSO employees in Oklahoma. Why, AEP, why? Was this a company-sanctioned activity? Were employees who voiced their support awarded with days off or a free breakfast? Or are these employees simply trying to find something to do with their time in the corner office? Each letter was hysterically incompetent in its own way and demonstrated the kind of unimaginative thinking characteristic of a bloated hierarchy full of incompetent middle management. This is all on you, AEP.

First let's examine the letter from Debbie Burchett, Administrative Supervisor from Oologah. Oologah is the site of one of AEP's massive coal/gas generation plants. What is an "administrative supervisor"? I have no idea, but she's "well versed in the electrical business on the generation side." I'll assume this means she sits in the corner office and writes letters to regulators with ideas that are strictly her own (but submitted in her official capacity with AEP). And she expects the regulators to call her on her cell phone to get further info (without a period because it's apparently a complete word at AEP) and leave a message and she will happy to return the call and talk to them about her perspective. Yes, I'm sure that would be very helpful to the Oklahoma Corporation Commissioners when they're making a decision on this complicated matter.

Ms. Debbie's advice is full of threat and doom of what will happen if the Commissioners don't approve Wind Catcher. Jobs and projects won't come to Oklahoma! It will hurt the state in electric use! (huh? what?) It will cost consumers higher rates in the future! People say they want renewables but Oklahoma won't approve a project that lowers rates! (Again... where's the logic here?) And then we get the dreaded double negative so bad it makes my head hurt! "l wouldn't understand why you wouldn't do this." And if that isn't convincing enough reason to approve Wind Catcher, "this would not be good if it failed for both the electrical industry and the consumers." Not good, according to Ms. Debbie. Ms. Debbie has been a consumer for 45 years! (How old is Ms. Debbie? I'm hoping she's 45, because it's pretty hard to live without consuming anything. I suspect she's been a consuming burden her entire life.) Well, she's got a leg up on people who have only been consumers for 25 years, or 40 years. An experienced consumer is always the best judge of new regulated projects that depend on a captive customer base for their revenue. Guess what, Ms. Debbie? Regulators like the OCC Commissioners take the place of competition in a regulated environment to make decisions about what's best for captive customers. Bless your heart, Ms. Debbie, you really gave it your best shot here. I hope you enjoyed your corporate trinket.

And now let's move on to Mr. Brett L. Martin, who thinks he's both witty and a master of the English language. His letter is addressed to "Esteemed Ambassadorial staff." Who? Maybe Brett addresses all his inter-office memos to his superiors with this salutation (because you don't get the corner office without a bushel of brown-nosing) but I don't think there are any Ambassadors at the OCC. Feigned toadyism only works in corporate settings, such as at AEP.

Brett is a SCADA Engineering Sr and that apparently makes his intellect and logic on all topics superior. Because he's an Engineer, y'all! Now obviously Brett isn't one of those innovative and creative thinking engineers because his knowledge of topics he didn't learn in engineering school are unimaginative and devoid of logic and understanding. Brett is headed to the corner office in a big, big hurry!

He makes "deductions" about resource adequacy and load projections that are not only completely wrong, his solution depends on an overly-expensive and intermittent resource that intends to ship 70% of the power produced out of Oklahoma.

His theory is that only wind is "green energy." True "green energy" is sustainable energy. Industrial wind is not a sustainable source because it becomes a burden on the land and population. Maybe he meant to say its burden is less than other sources, but that's only true when the infrastructure isn't in Brett's backyard. A completely myopic and boring repetition of meaningless and trendy climate change memes.

He then delves into gas v. wind prices and unknowingly makes a great argument for disapproval. "The forecast for natural gas cost is not a valid comparison unless the OCC wants to gamble on future markets." That's precisely why the Texas PUC denied this project. Thanks, Brett! His solution obviously wasn't cleared by upper management, because he wants to "Ensure accountability for the provided statistics and this point is closed regarding protective assurances." AEP did not want to provide these protections. It couldn't. That would have most likely caused a loss to the company. That's how skewed their gas price forecast was, and they knew it.

Then we get a paragraph about the sky falling if "a negative result is found." There will be massive state revenue losses! (You mean like the ones related to state tax credits for wind?) And many Oklahomans will hold the OCC responsible for any future repercussions! Do you mean you, Brett? Are you the Oklahoman who is going to sue the OCC over possible "what if" situations? I hope your understanding of the regulated legal system is better than your understanding of rates and resource planning. Go for it, Brett! And while you're at it, good luck with that generation shopping thing. It sure looks like you're suggesting if the OCC approved cost recovery for Wind Catcher from PSO's captive customer base that it could later on change its mind and allow customers to opt out and buy their generation from somewhere else. Did you check that idea with management first? I'm pretty sure the company wanted a cost recovery scenario that would be guaranteed... forever.

And let's finish up with Brett's completely wrong-headed ideas about right of way acquisition and drivers for landowner opposition. This is so misguided, so arrogant, so tyrannical, it can only be a revelation of the institutional mindset of a corporation so used to persecution to get what it wants that it is completely devoid of the empathy that makes us human. Karma has a package for Brett and someday it will deliver.

In conclusion, the only argument I've noticed that needs addressing, is the Right of Way with landowners. Most of the Transmission route is satisfactorily settled to landowners' liking. There will always exist individuals that aim to capitalize on any efforts to improve a populations quality of living. I understand and readily concur that there are some situations
that need clarification and potential settlements, but this in no way impacts pre-approval of cost recovery. Laws exist by the legislature to ensure both landowners and corporate entity interests are protected regarding Right of Way. It seems arguments are rather one sided lately favoring the landowners. If our nation aimed at 100% satisfaction, we wouldn't even be able to elect governmental officials. With corporate expansion, the same holds true. A majority of Oklahomans approve this project and want our state to lead the nation.

Landowners who oppose transmission are merely being greedy? Is that what you think, Brett? Do you believe they will drop their opposition if enough cash changes hands? Wow, aren't you jaded? Here's the reality you've been sheltered from in your little SCADA world... landowners oppose new transmission because their land isn't for sale at any price! Landowners oppose transmission for a lot of reasons, but one of the most common is attachment to the land, often land that represents the blood, sweat, and tears of their family for generations. There is no amount of money that can compensate for the permanent destruction of a person's home, especially one rich in heritage and memories. Your accusation that landowners who resist new rights of way are merely trying to score a bigger pay day is so deeply offensive, Brett. Where did you get such an awful idea? Was it from your buddies in the land acquisition department who insist they are "working with landowners" to coerce right of way agreements, or did you think it up on your own while passing the trophy case on your way to the cafeteria on numerous occasions? (Ratepayer-funded donuts!)

And can you tell me how many "most" is? You say "most" of the route is settled. I don't think that's true. Most should indicate nearly all, or a vast majority of something. Certainly more than 50%. My experience with landowners affected by Wind Catcher was that "most" of them didn't want to sell. Some initially felt persecuted enough by high-pressure land agents and injunctions that they just gave in. These landowners were not happy to sell a right of way. They were bullied and coerced to do so. And others on the verge of giving up were empowered by other landowners who refused to negotiate, and they subsequently joined the ranks of opposition. Your "most" is a declining population once opposition gets a toehold and begins to spread.

Additionally, your idea that laws adequately compensate landowners is not a view shared by affected landowners. It is one shared by unaffected individuals and transmission owning bullies. A one-time "market value" payment for only land taken doesn't even come close to just compensation for an entire parcel devalued by changed use forever. "Just compensation" attempts to make a landowner whole for one particular point in time. It does not compensate for loss to the entire parcel, nor for future uses that subsequently become impossible. Land unobstructed by involuntary rights of way can be used for any purpose in the future, whether it is for new farming ventures, new businesses, or even future residential development. Adding a utility right of way through the property forecloses all these future possibilities, yet landowners are never compensated for future scenarios. Landowners are also not compensated for their emotional attachment to land, nor the burden of having to look at and live with new infrastructure and its inherent risks every day in perpetuity. "Just compensation" serves the interloper, not the landowner. Any ideas that a landowner merely holds out for higher compensation is nothing short of adding insult to injury.

And there is no voting process for eminent domain. It's a process reserved for the courts and special compensation boards or juries of landowning peers. Your attempt to compare the eminent domain process to democratic elections is an utter failure. The public at large hates eminent domain, for any reason. If a person isn't a self-centered, greedy bastard who thinks he can profit or gain something through the use of eminent domain, if he is someone with common empathy for his fellow man, he will always see himself in the victim role. If the community at large voted on eminent domain takings, they would cease to exist. If eminent domain can be used on our neighbor for one reason, it can be used on us for a different one.

Brett, I pretty much think you may be an absolute jerk. But thanks for that little peek into corporate think. You're an asset to your company and hopefully you'll have that corner office soon.

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News from the Neighborhood of Make Believe

8/9/2018

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We're off to the neighborhood of make believe this afternoon! Let's get in the mood!

Remember how "lean and mean" Clean Line got last week, when most of its employees abandoned ship? Well, it's apparently gotten even leaner this week, as Head Rat Michael Skelly abandoned his own ship.

Michael Skelly Joins Lazard as a Senior Advisor

Oh, so now even Skelly had to get a real job? That's pretty funny. Now Michael Skelly is just another briefcase totin' drone. No more tilting at windmills.

Except, who wrote this press release? I'm still trying to wrap my brain around Skelly being described as:

He is an accomplished strategic thinker...

...his expertise in developing large-scale infrastructure projects

It must be a different Michael Skelly. They certainly can't be talking about the Michael Skelly who spent over $200M of investors' money on a crackpot idea to build 2,000 miles of merchant transmission "for wind" that never attracted any commercial interest. No customers. No revenue. No transmission lines. Who spends more than $200M "developing" something that never earns a dime of revenue and then is called "accomplished." Unless, of course, they meant "accomplished" in a "The Big Short" kind of way.

Expertise in developing projects? Certainly transmission lines cannot be included in those projects, since none of Michael Skelly's Clean Line's projects ever got close to being built.

King Friday XIII must have written this press release:

Mr. Skelly is the founder and Chairman of Clean Line Energy Partners, a leading U.S. renewable energy infrastructure company.

Leading? Leading whom? If Clean Line is at the head of this parade, I wonder who is bringing up the rear... Solyndra? Perhaps they meant leading in the amount of investor cash wasted on an idea the energy industry said would never pan out? That's the only parade Clean Line seems to be leading.

Oh, and hey, look at that.... Michael Skelly has been promoted to Chairman of Clean Line Energy Partners in 2018. Is that because he's now the only board member and chairman by default?

So now Michael Skelly is working for some other "financial advisory" company to bring home a paycheck. Can we just quit pretending that he's going to build Grain Belt Express now? How is one man working only on nights and weekends going to build a 750-mile transmission line when an entire company couldn't pull it off before?

Move on, Michael Skelly, move on. Go have a nice life pumping cash out of people with more money than brains, and tilting at new and improved windmills with other people's money. Just go away, won't you?

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It's Time for PJM to Fall Gracefully on its Sword and Cancel Transource IEC

8/6/2018

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Transource IEC opposition groups in Pennsylvania and Maryland have been slowly building for the past year. Their building, until recently, has flown under the radar of PJM Interconnection. Although PJM should have been paying attention (at least since it was first called to explain itself to the community at a local meeting last year), PJM chose to dismiss the opposition and tune it out. PJM has been listening only to its "member" Transource about project progress, and perhaps its perceptions have become skewed.

The Transource IEC project is not proposed for "undeveloped land," as the PJM Board was told in a pre-approval whitepaper. The Transource IEC project is proposed for fully-developed farmland, the majority of which is conserved. Who does your constructibility reports, PJM? Do you hold a seance and consult with utility planers from 1930? It's been many years since farmland was "undeveloped land" that has no value of its own and is seeking linear infrastructure projects to increase its value to the community. In fact, that's probably never been entirely true, although in the last century farmers were a politically disenfranchised population whose cleared, relatively flat land looked good for cheap, linear infrastructure at 30,000 feet. That's no longer true, especially in the eastern portion of the PJM region, where dwindling farmland has become a highly-prized commodity worthy of protection from cluttered over-development.

In addition, time has not been kind to the IEC. Like a parasitic houseguest who drinks all your beer and leaves hair on your soap, IEC has not become more valuable over time. It's become less valuable. And the people can't wait until it leaves for good. Market efficiency projects have a very short shelf life, which PJM obviously realized when it inked its agreement with Transource to build the IEC project. Now it's time to re-evaluate and send IEC to the great dump heap of failed projects.

Opposition to IEC is entrenched and wide spread. Cancellation is the only option.

The opposition recently voiced its reasons for cancelling the project in a letter to the PJM Board of Managers. This opposition was bolstered by additional letters to PJM from Pennsylvania Representatives Kristin Phillips Hill and Stan Saylor. In addition, Pennsylvania Public Utility Commission administrative law judges evaluating the project have become increasingly critical of the project, with Judge Elizabeth Barnes stating that she'd be "hard pressed" to approve the currently proposed project. Things are not going well for this project in Pennsylvania.

What's happening in Maryland? Governor Larry Hogan recently sent his own letter to PJM requesting the project be stopped until it can be re-evaluated or develop a new route using existing rights of way. Things aren't going so swell in Maryland, either.

Face it, PJM, this is the kiss of death for the Transource IEC. It's time to cancel the project and go back to the drawing board, presuming any actual "need" to relieve congestion still exists. And PJM has stated that a re-evaluation is in process and will be revealed at PJM's September TEAC meeting. What PJM's magic math giveth, PJM's magic math can subsequently taketh away.

The number of abandoned PJM projects is steadily increasing, and with generous FERC incentives to reimburse project costs in the event of cancellation, costs to ratepayers stemming from PJM failure are well into the hundreds of millions of dollars. Hundreds of millions of dollars added to the electric bills of PJM consumers for badly planned projects that never even get off the drawing board! You've got a big, big problem, PJM! Your planning process isn't working and desperately needs revision.

I'd start with PJM's subjective "constructibility analysis." There's no uniformity here. PJM needs to add some reality to its engineering staff. Just because something looks good ("robust" in PJM parlance) from an engineering standpoint, does not mean it should be constructed. Engineering needs to intersect with the reality of politics, regulation, land use, and community relations. That's the point of a "constructibility analysis." But there are no standards. While I have seen "constructibility" analyses that factor in possible opposition, others don't even mention it. Environmental factors are not the only thing that makes a project unable to be constructed as planned. In fact, environmental factors are the ones most nimbly avoided. It's those other factors that kill projects. It's high time PJM add some uniform standards to its "constructibility" analyses and require each greenfield project to be evaluated according to set standards. A greenfield project that is technically superior to a rebuild isn't so superior when it can't be built. In that case, a lesser rebuild is the solution that best serves consumers because it is more likely to actually get built.

And PJM needs to come out of hiding and own its work. Transmission owners hide behind PJM by claiming they're only following orders. PJM in turn hides behind transmission owners by turning a blind eye to what is actually happening with the projects it orders, and instead receiving all its information about a project's progress from the transmission owner. In order for PJM to have any credibility, it needs to actively participate in tracking project progress. PJM has long been in desperate need of an effective public relations program. Why is it that 99.9% of the consumers PJM serves have never heard of PJM? Because PJM likes it that way. Only when PJM realizes it exists to serve consumers (not simply member utilities) and develops a relationship with its consumers will its credibility and purpose be recognized by the consumers. When will PJM recognize the usefulness of doing its own community consultation and not leaving that task up to increasingly patronizing and arrogant transmission owners whose only concern is the amount of money it can make from a project?

You could do so much better, PJM, on a lot of fronts. But, for now, it's time to fall gracefully on your sword once again and cancel the Transource IEC project.

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Michael Skelly Aspires to be Meaner

8/1/2018

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How much meaner could one be than to continue to attack people in 3 states with pie-in-the-sky promises to impede their businesses and take their land by eminent domain, when the likelihood of ever actually doing so is hovering near zero?

"We knew that if we were going to focus, we would need a leaner, meaner team."

Really, Michael Skelly, I can't help laughing at your feeble attempt to pretend you're some incredible go-getter who can suddenly make Grain Belt Express happen with a "leaner, meaner" approach.

Is "leaner" meant to cover the fact that there are no Clean Line employees anymore? I notice you suspiciously skirted around that issue in your ego-polishing interview with Houston Business Journal.

Though he declined to comment on the sale price of the assets Clean Line has sold or the company’s current, reduced headcount, Skelly did say he isn’t looking to move into a smaller office with the slimmed-down team.

Oh, c'mon! We know that ConnectGen has taken over Clean Line's former ugly orange office space on McKinney Street. When a person calls Clean Line's former phone number, it is answered "ConnectGen."

It looks like most of the management of the former Clean Line Energy Partners has reconstituted itself at ConnectGen, including the former Grain Belt Express project manager.

Leaner? So lean that there's no longer a need for a project manager? Who does still work there, and are they actually drawing a paycheck?

Houston-based Clean Line Energy Partners LLC has trimmed its portfolio down to one $2.3 billion project in the midwest called Grain Belt Express.

That left Clean Line with Grain Belt Express, a transmission project moving wind power from Kansas to as far east as Illinois. That’s what Skelly wants to hone in on, he said.

Grain Belt is still in the permitting phase, and it had been hung up in a Missouri Supreme Court case around who determines whether the project is in the public interest. The court ruled that the central Public Service Commission gets to decide, a favorable outcome for Clean Line, according to a July 26 press release.

The PSC has broad discretion in how it handles the decision going forward, so the timeline for the project could still change depending on what it does, Skelly said. But right now Grain Belt is looking at five or six years before it’s operational, he said. Clean Line should hear the PSC’s decision within the next several weeks, Skelly said.

Since its single remaining asset is still in development, Clean Line is not producing revenue right now.

Seems like Skelly forgot some parts. Clean Line will STILL need the assent of Missouri counties before it can begin construction on its line. While the court said the PSC can issue a permit before county assent, it must issue a conditional permit that is only good after county assent. It was completely an issue of timing, not authority. Skelly also forgot to mention that GBE's Illinois permit has been revoked by the Corporation Commission upon order of the Illinois Appellate Court. The court found GBE was not a utility, and even if it somehow manages to buy utility property and re-apply under the long process, there are unresolved issues at the Illinois Supreme Court in the RICL opinion regarding whether Clean Line's merchant business model prohibits it from being a public utility under Illinois law. Chances of building GBE are slim to none. But building GBE may not be what Skelly has in mind.

Clean Line’s founder and president, Michael Skelly, hasn’t yet decided what to do with Clean Line once it either sells or completes Grain Belt, he said. If it sells the project, it will have cash and a very small number of employees — a good position for the company, Skelly said. It’s still to be determined whether the company would make an exit from the market at that point or start working on a new project, he said.

Sell Grain Belt Express?

Why, who in their right mind would buy Grain Belt Express?

And is there some Failed Utility Ideas Gazette where one can take out a classified advertisement to sell used transmission project ideas?

It almost sounds like Michael Skelly is simply preening and polishing for the express purpose of trying to unload this turd on some unsuspecting mark with more money than brains.

So, here's a scenario that Michael Skelly didn't envision in the article. What if he fails to sell the doomed GBE project? Does he have the cash and expertise to complete it himself? How does one man with little to no cash build a transmission line more than 700 miles long? How far are we supposed to stretch belief here?

What if Michael Skelly fails to sell or complete GBE? With no cash and no employees, a bad position for Michael Skelly, will he finally become humbled enough to admit that Clean Line is defunct? Can he man up enough to release these landowners from his empty threats? Michael Skelly needs to quit wasting everyone's time and money!

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Dear Abby, Dear Abby...

8/1/2018

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Dear Abby, Dear Abby
Bet you never thought
Telling your lies, that you'd ever be caught;
There is no PUC deadline for eminent domain
The deadline is yours, and your lie is insane.

In a recent news article about public hearings for the 133 eminent domain petitions filed by the Transource Independence Energy Connection, spokeswoman Abby Foster says:

Many landowners are in the process of negotiating rights of way, and Transource had to meet the PUC deadline for any easement which might require eminent domain, according to Transource spokeswoman Abby Foster.

"Those names may come off as negotiations happen," she said.

Transource will not proceed with eminent domain proceedings until the project is approved, according to Foster.

Landowners should meet with Transource right-of-way agents so they can understand the process and can negotiate the location of the line, she said.

"They can still say no at the end of the process," she said. "It's up to the landowners whether to sign the documents."

A PUC deadline, you say? It's been a while since I read one of Transource's eminent domain petitions (filed in May) but I don't remember anything about there being a PUC-imposed deadline to make those filings. So, I gave it another look. In one such petition against a landowner in York County, I found this admission:

However, given the construction schedule and in-service date for the proposed lEC-East Project, it is necessary for Transource PA to seek Commission approval to exercise the power of eminent domain in order to ensure that the lEC-East Project is constructed and operational by the in-service date.

So it's actually a self-imposed deadline by the company. IT IS NOT A "PUC DEADLINE."

Where I come from, we call this a lie. In fact, I'd categorize as the bold-faced variety.

What was the purpose of this lie? Was it because 133 eminent domain petitions looks bad for Transource? Especially when there was no reason whatsoever to file them. Except maybe Abby's statement reveals Transource's reasoning... the company is STILL trying to get landowners to negotiate. But landowners are STILL routinely slamming doors in Transource land agent faces. How many is "many," Abby? The dictionary defines "many" as "a large number." 133 is a large number, and many of those individuals have refused to negotiate.

Miss Abby, Miss Abby, I have a complaint,
The truth is the truth and truth this just ain't
So, listen up, missy, and listen up good
Stop telling your lies and go back to your 'hood.

Landowners should NOT meet with Transource right-of-way agents... unless they just want to amuse themselves "negotiating" the location of the line to Nick Akin's backyard.

0 Comments

Congestion is Fleeting, Transmission is Forever

Miss Kitty Hamm Analyzes a Missouri Supreme Court Decision

Transmission Company Employee Thinks Opponents are Merely Greedy

News from the Neighborhood of Make Believe

It's Time for PJM to Fall Gracefully on its Sword and Cancel Transource IEC

Michael Skelly Aspires to be Meaner

Dear Abby, Dear Abby...

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