StopPATH WV
  • News
  • StopPATH WV Blog
  • FAQ
  • Events
  • Fundraisers
  • Make a Donation
  • Landowner Resources
  • About PATH
  • Get Involved
  • Commercials
  • Links
  • About Us
  • Contact

WV PSC Follows Utility Lead

10/28/2016

1 Comment

 
It's really not surprising that our West Virginia Public Service Commissioners continue to fail at leading utilities to act in the best interest of the state's consumers.  In a state where Public Service Commission appointments are looked at as political favors, an ill-informed and uninspired regulator continues to march to the beat of utility profits.

Recently, the WV PSC dismissed a petition filed by its own staff and the WV Consumer Advocate to require electric utilities Mon Power and Potomac Edison to issue a Request for Proposals before buying another generator from its parent company in an intimate and opaque non-arm's-length transaction.

The WV PSC found the petition "premature" because the companies have not yet filed an action to purchase more generation.

The PSC previously rejected a motion by the same parties to require the companies to issue an RFP for new generation it claimed would be needed in its Integrated Resource Plan last year.

The PSC contends that the requirement to file an Integrated Resource Plan does not allow the PSC to approve or reject a utility's plan, therefore it must powerlessly follow a utility's lead.  The PSC also contends that the companies' promise to issue an RFP for new generation that was part of its settlement in the case that allowed its last inter-company purchase of generation has not been triggered.  The WV PSC sits trussed up on the floor like a prisoner, unable and unwilling to act in the best interests of West Virginia's electric consumers, completely useless.

It's word soup and double standards that has the PSC ineffectually sitting on their hands.  The last time the companies needed to purchase generation in an internal transaction (Harrison), they claimed there just wasn't time to issue an RFP because the need was way too urgent.  If that was the case, then the utilities had not planned correctly.  The settlement that allowed the purchase of Harrison required:
If the Companies determine in any annual PJM Base Residual Auction (“BRA”) that their combined capacity obligations for the delivery year covered by the BRA (“Delivery Year”) exceed the Companies’ owned or contracted-for capacity resources for the Delivery Year by 100 MW or more (“Capacity Shortfall”), then not later than the end of the calendar year following the BRA, the Companies will develop an RFP for capacity resources to address the Capacity Shortfall and submit the RFP to the Commission and the Parties for their review and comment. The RFP will allow proposals from both supply-side and demand-side resources.
Everyone hoped that the companies would honor this commitment.

However, the companies turned around and filed an Integrated Resource Plan contending a generation shortfall.  In that filing, the companies used a different method to calculate the shortfall that did not depend on PJM's Base Residual Auction.
Mon Power’s Long Term Load Forecast indicates a capacity shortfall starting in 2016, with the shortfall exceeding 700 MW by 2020 and extending to over 850 MW by 2027.
While PJM's auction may not require the companies to acquire more generation, the companies used a different method to calculate a shortfall, and then claimed that it was not required to issue an RFP because PJM's auction didn't indicate the same shortfall.

And the WV PSC let them get away with it!  If the PSC wants to use the companies' method to calculate generation needs, then it should never have approved the settlement stipulation that used PJM's method.  Conversely, if the PSC approved the stipulation that used PJM's method for calculating generation needs, then it should never have allowed the companies to use a different method in its Integrated Resource Plan.  They simply can't have it both ways!  Either they have a generation shortfall, or they don't.  The WV PSC needs to quit dithering and sitting on its hands.

FirstEnergy has made it perfectly clear that it intends to make Mon Power and Potomac Edison purchase the Pleasants power station.
We will continue to seek opportunities both within the competitive realm and the states to further de-risk the business and convert megawatts from competitive markets to a regulated or regulated-like construct.

We also plan to work with the West Virginia Public Service Commission when they are ready to address the generation shortfall included in Mon Power's integrated resource plan.

So we previously filed the IRP. It showed a need for generation going out a couple of years from now. But that case right now is concluded. So there is nothing that would, unless we were to file something, initiate something, that would come out of that case. So we would be looking as we go forward and continue to monitor the forecast for that company to see how we might want to present something consistent with the IRP in terms of bringing additional generation to Mon Power.

Michael Lapides - Goldman Sachs & Co.

Got it. So there's no formal like RFP process that's about to kick off or that will be undertaken in 2016 or 2017?

Leila L. Vespoli - Executive Vice President, Markets & Chief Legal Officer

Correct. There's no time line associated with that. We would initiate it when we believe it to be the appropriate time.
FirstEnergy management arrogantly tells its investors that it alone controls the timeline in which the WV PSC may examine its upcoming request to have Mon Power and Potomac Edison purchase more generation from the parent company.  Only FirstEnergy will decide when the time is appropriate to create another "urgent need" that the PSC must approve without initiating a fair and transparent competitive process.

The WV PSC needs to stop behaving like FirstEnergy's dog on a leash and start doing its job as a regulator tasked with balancing public and private interests to effectively serve the state's consumers.  Maybe the political appointees at the PSC need to find out what their job actually entails?  I think they all need to read this book.
The decisive regulator makes decisions (1) required by the public interest, (2) when the public interest requires it, (3) regardless of discomfort felt, (4) using a logical method and an active approach.
As long as the WV PSC continues to behave like a lapdog, FirstEnergy will continue to toss West Virginians under the bus for benefit of its company and investors.
At this time, however, we do not see any short-term solutions to the current challenging market situation. Longer-term, we do not believe competitive generation is a good fit for FirstEnergy and are focused regulated operations. And we cannot put investors and our company at risk as we wait for the country and PJM to address the issues with the current construct.
Our PSC should be refusing to put West Virginians at risk!  Let's hope they figure out what it is they're supposed to be doing before we're stuck with another costly, outdated generator.
1 Comment

Wind War

10/25/2016

1 Comment

 
The wind industry is at war with itself, and the prize is your energy dollars.

Buoyed along by "green is good" propaganda, big wind players battle with each other to capture a bigger share of your monthly electric bill.  At its most basic level, it's not about stopping climate change, it's about getting rich by capturing the political market for green energy.  Being first to build and secure customers makes a winner in today's wind war.

The amount of energy we use hasn't changed much over the last decade.  While we have more electronic gadgets than ever before, they use less electricity.  Power hungry manufacturing operations have been shipped overseas.  Any gains are offset by increased efficiency and conservation.  While traditional electric utilities are struggling, a new crop of wind energy peddlers have emerged to claim that they can shut down fossil fueled energy plants and completely remake our energy system.  This isn't necessarily true, and the price to do so is mind boggling.  We simply can't afford it.

While that debate publicly rages, big wind's internal war doesn't receive much notice.  Land based wind is at war with offshore wind to fuel eastern renewable energy requirements.  While offshore wind may be more expensive to build, it's conveniently located close to eastern load.  And while land based wind may be cheaper to build, it requires billions of dollars worth of contentious new transmission lines to get to eastern markets.

Land based wind has enjoyed quite the hey day over the past decade, but populations near land based wind's most prolific locations have reached saturation.  There's only so much wind our energy system can reliably use.  The companies who struck it rich cluttering the Midwest with wind farms, and pocketing billions in tax subsidies for their efforts, now need to create new export markets for their product in order to continue shaking the energy piggy bank for all it's worth.

Offshore wind has struggled over the last decade, with high prices and political opposition to local energy infrastructure.  The east coast has enjoyed plentiful cheap energy for the past 100 years at the expense of states in the Ohio Valley, who were only too eager to plunder their own communities to become energy exporters.  Now that the will to continue to foul their own nest has softened in the Ohio Valley, eastern states must look elsewhere for energy.  What's closer and more reliable than their own backyard?  Government-created wind maps consistently show greater wind energy potential offshore.  Offshore wind has greater potential.  "Offshore wind resources are abundant, stronger, and blow more consistently than land-based wind resources."  The only thing missing has been the political will to get started.

America's first offshore wind farm is scheduled to go online this month off the coast of Rhode Island.  And Rhode Island is reveling in the economic benefits of producing its own renewable energy, rather than sending its energy dollars out of state to import power from other areas.
The wind farm is a construction story, involving three of Rhode Island’s major ports — in Providence, Quonset, Point Judith — and more than 300 blue- and white-collar workers.

Jen McCann, the director of United States coastal programs at University of Rhode Island’s Coastal Resources Center, says the northeast is “considered the Saudi Arabia for wind.” J. Timmons Roberts points to the fact that Rhode Island imports more than $3 billion a year in fossil fuels to meet its energy needs. “So that’s $3 billion pouring out of our economy to Pennsylvania for fracked natural gas, or to Texas or Saudi Arabia or Venezuela,” he says. “Think of how many jobs you can make for $3 billion,” he says. The United States Department of Energy is already doing some of those calculations. In a recent report, the DOE has predicted the United States will have 32,000 offshore wind-related jobs by 2020 and more than 170,000 by 2050.
But DOE is no hero.  The political agency has been fomenting the country's wind war by also supporting the building of transmission to import Midwestern land based wind to eastern states, like Rhode Island.  In its attempt to support an "all of the above" energy portfolio, DOE has placed itself in the position of political kingmaker by creating advantages for land based wind in order to make it more marketable.

While offshore wind digs in a toehold, Midwestern wind ratchets up a hysterical campaign to capture budding eastern renewable markets through the building of thousands of miles of new high voltage transmission lines to the east coast.  Calling themselves "the Saudi Arabia of wind," Midwestern states are eager to export their wind energy to the east and suction economic development and energy dollars out of those states.  The Midwestern media continues to pump out propaganda insinuating that the Midwest is a superior energy source and that new transmission to export it will rebuild an aging transmission grid to increase reliability.
A wind resource map, published by the U.S. Office of Renewable Energy, illustrates the windiest real estate in America. A vertical violet streak down the nation’s midsection indicates persistent, intense winds concentrated in places like western Kansas, Oklahoma, and Texas. And a private company, called Clean Line Energy Partners, plans to tap that for electricity it can immediately transport to utilities requiring a bolus of alternative energy in their portfolios.  

Clean Line Energy Partners, LLC — established in 2009 and headquartered in Houston —  has laid out five 600-kilovolt, direct current power transmission lines across the U.S. CLEP aims to bolster our aging national power transmission grid starting with The Plains & Eastern Clean Line that's designed to deliver 4,000 megawatts of wind energy from western Oklahoma to the Tennessee Valley Authority for distribution to southeastern markets.

This is a lie.  As the DOE's own maps indicate, offshore wind is a superior source of wind energy.  Furthermore, reliability of the transmission grid is a non-political function of government regulators who plan and order needed transmission.  None of Clean Line's proposals have been vetted by grid planners and are not included in any plan for grid reliability.  We don't need independent actors "bolstering" grid reliability for their own profit.  But DOE believes it has found a "need" for one of Clean Line's projects, although it has no role in planning the transmission grid.  Our grid isn't as rickety as outfits that stand to profit building extraneous transmission want you to believe.  Our grid is more than adequate, and upgrades are performed when needed.

Eastern states are already thick with west to east transmission lines that have imported Ohio Valley power to load centers for decades.  With a new source of power located within 10 miles of shore, very little transmission work needs to occur to interconnect offshore generators to the existing system and begin shipping power from east to west.  The tricky part may be bringing offshore generation to interconnection points on land.
...Narragansett officials resisted plans for the wind farm’s cable to run underneath its town beach. Deepwater Wind, the company building the wind farm, eventually got clearance to send the cord under Scarborough State Beach instead.
If each offshore wind farm requires its own onshore connection, it's going to be expensive.  And we're soon going to be choked with underwater cables.  A better idea was announced way back in 2010.  The Atlantic Wind Connection proposed an offshore "trunk line" of its own running parallel to the east coast, with just a handful of onshore connections.  Offshore generators would connect to the trunk line, instead of going to the trouble and expense of building their own cables to shore.  But what's happened to this idea?  It's been torpedoed by eastern grid planner PJM Interconnection, who got too busy protecting the financial interests of its incumbent utility members, who fear losing market share to offshore wind generators.

Who's protecting consumer interests here?  It's not the wind industry.  It's not the U.S. DOE.  And it's not regional grid planners.  In many instances, it's the consumers themselves.  Landowners across the Midwest are firmly opposed to the taking of their homes and farms to make way for thousands of miles of new transmission headed to the east.  Opposition has delayed these bad projects for years and is showing no signs of weakening any time soon.  But consumers in eastern states need to do their part, too.  We should be encouraging and supporting  the burgeoning offshore wind industry which will bring economic development to our states and keep our energy dollars at home.  Let's end this wind war in our own best interests.
1 Comment

Clean Line Closing in on Darkened Lounge Journalism

10/19/2016

5 Comments

 
Picture
Well, isn't that nice?  Clean Line's Mark Lawlor got all chatty with the Missouri Times, who tried to create the fantasy that the Grain Belt Express transmission project is pretty much approved by the Missouri Public Service Commission.

Nothing could be further from the truth.

"Clean Line closing in on final order with the PSC"
appears to be the work of a journalist who doesn't understand the PSC process and prefers to present only one side of the story.  Clean Line isn't "closing in" on anything.  The parties (including those who oppose the project, because even if the story doesn't mention them, they still exist) are merely jockeying for position to develop a procedural schedule.  Big. Stinkin'. Deal.  This does not mean that the process has officially even started yet, but once it does, other parties will have opportunity to present evidence to the Commission and argue their position.  The positions of the opposition were enough to convince the PSC to deny GBE's first application in Missouri.  Nothing much has changed.  Except the propaganda... Clean Line is pouring that on real, real thick.

Does Clean Line think that the MO PSC is going to be swayed by propaganda and third party advocacy, instead of evidence and law?
The Grain Belt Express Clean Line wind energy project has made significant steps towards getting the final green light from the Public Service Commission.
Since the case hasn't even started yet, it remains to be seen if Clean Line's newest application will do anything to convince the PSC to approve the project.  Who decided "significant steps towards getting the final green light" have happened?  The Missouri Times?  Clean Line?  I'm sorry, but the only entity who can decide that is the MO PSC, and they haven't decided anything yet.  And what's this about a "final" green light?  This implies that a preliminary "green light" has already happened, and that's just not true.  It's been nothing but RED lights for Clean Line in Missouri so far.

And do you know why GBE "stalled" in July?  Because it filed an improper application in June that was rejected by the PSC.  "Stalled" isn't quite the proper word, denied is more apt.

So, the only "news" here is that the Missouri Times mistakenly believes "the case has officially started with the commission."  That's not news.  I'm pretty sure everyone already knows that.  And... wowzers, on the edge of your seat, folks... the PSC gave the go-ahead to finalize a public hearing schedule.  It doesn't mean the schedule is set or anything.  It means the parties are still arguing about it.  This is not news either.

So, Mark is excited.  I hope you're all excited, too.
“It wouldn’t make a lot of sense to build a line around Missouri,” Lawlor said, adding that he is confident the PSC will rule fairly on the merits of the project, not the factor. “They’re going to judge the case on its merits and whether it meets the standards that Missouri has under its statutes. They will ask, ‘Is there a need for the project and is it it in the public interest?’ We have put forth a strong argument that there’s a need.“
I'm also confident the PSC will rule fairly on the merits of the project.  And that GBE has done nothing much to create any "need" for its project.  Because, at the end of the day, Clean Line's "contract" with Missouri cities isn't binding.  The cities can elect not to participate at a later date, like when they find out that the purported wind energy they are going to have to purchase from another party in order to use GBE's capacity is much more expensive than Clean Line originally quoted.  Because Clean Line does not sell energy.  It can't price energy.  It can only sell transmission capacity, which amounts to an empty extension cord not plugged into any energy source.  Who buys an extension cord that's not plugged into anything and hopes a cheap generator gets built later on?  And guess what?  The lights will not go out in any Missouri city if Clean Line is not built.  And the cities can't even claim any savings from a Clean Line... because any savings are purely speculative at this point.  Without contracted energy, the cost to the Missouri cities is nothing but a big, fat, guess.  So, no need, no public interest, not a public utility. 

And all that blather about what some "Fortune 100" companies want is also a load of who shot John.  If these companies want renewable energy, there's nothing stopping them from buying it.  Right now.  Today.  And if they're really considering opening new facilities in locations where renewable energy is available, the prudent thing to do would be to locate the facilities near renewable energy generators, not in places where they have to pay transmission charges on a "clean" line.  We don't "need to do them" so the companies can pay extra for transmission.

And then Lawlor piles on some condescending "concern" for Missouri.  Don't be fooled... Mark's primary concern is turning a profit for his company, not providing electricity to Missouri.
While Indiana and Illinois signed onto the project before Missouri, Missouri was always seen as the most integral partner of the project. Lawlor says that belief can cause some to believe Missouri would not get much benefit out of the project, even though Missouri would get roughly 500 MW from wind energy as a result.

“Some folks get distracted this is something going through Missouri, the reality is that this is delivering power to Missouri,” he said. “From day one, it was just going to be a Kansas to Missouri line, but we found the Missouri grid couldn’t take that much power.

“Missouri’s key to this whole thing and we hope and expect we can bring those benefits to the state,” Lawlor said.
Missouri will only "get" roughly 500 MW of Clean Line's capacity if load serving entities actually purchase it.  Clean Line isn't giving "benefits" away for free.  If there are no purchasers, there are no "benefits."  And so far there are no firm purchasers.  Clean Line isn't delivering anything to Missouri, or any other state, without firm customers.  In fact, Lawlor forgot to mention that Clean Line's speculative "contract" with Missouri cities also proposes to sell capacity to the cities to export their dirty coal-fired power to other states.  If 500 MW comes in, and 500 MW goes out, what does Missouri get?  Fooled, that's what they'd get.

If Missouri is the key, Clean Line is in a heap of trouble.

So, what is it about The Missouri Times that makes them publish these kinds of stories?  The Gateway Journalism Review took a good, hard look at the Times earlier this year, and found a bunch of unpaid bills, unpaid taxes, and an editor who "was convicted by a Cape Girardeau County jury of three counts of felony forgery. In that case, he was accused of forging checks for an account for a highway expansion project."
A reporter attempted to interview Faughn about his companies’ money troubles. The Missouri Times is headquartered at 129 East High St. in Jefferson City. A reporter found Faughn there at the top of a two-story walkup, inside a darkened room resembling a lounge.

Faughn was standing behind a bar in the room with a laptop computer in front of him. Liquor bottles stood on shelves on the wall behind him. Black and white photos of politicians covered the other walls of the room.

Faughn declined a face-to-face interview. He said he would consider written questions sent by email. Questions were emailed March 17. Faughn acknowledged receiving them March 21, but said he could not respond until next week.

Faughn, the former mayor of Poplar Bluff, launched the Missouri Times in 2013 with former Missouri House Speaker Rod Jetton. Faughn was Jetton’s former campaign manager. Jetton has since severed ties with the operation.
Oh, I see.  This is the kind of publication that publishes glowing stories about Clean Line "closing in" on PSC approval.  It all makes sense now.
But what I really want to know, after reading this story, is when GBE is denied by the MO PSC for the second time, will Clean Line will finally go away?  After all, the story says a "final order" of the PSC is about to happen.  A final order on GBE's first application already happened, but the company has yet to go away.  Let's hope this time final means final.
5 Comments

FERC Ordered to Pay Legal Fees in FOIA Dispute

10/7/2016

3 Comments

 
Picture
Lawyers and their document games!  Lawyers often resemble broody hens when documents are requested, and they have any number of tricks to play when finally placed in the broody cage by a judge.

This week, U.S. District Judge John Bates ordered FERC to pay over $60K in legal fees to STS Energy Partners to reimburse them for their cost of suing the Commission to force the release of documents requested through FOIA.  Although the lawsuit eventually inspired FERC to cough up the requested documents, Judge Bates found that FERC's document games should have been solved without STS Energy having to resort to filing a lawsuit and incurring legal fees.
FERC did show some recalcitrance and at least “appeared” to “withhold” the segregable portions of requested documents “merely to avoid embarrassment or frustrate the requester,” or simply to avoid the time-consuming work of separating information that could be properly withheld from information that could not.
 According to the decision, the story goes like this:

STS Energy submitted two FOIA requests to FERC "seeking to 'shin[e] light on FERC’s recent and punitive efforts against small power market traders for engaging in legal and ubiquitous activity in the PJM Interconnection (“PJM”) wholesale electricity market'."  FERC withheld some responsive documents.  STS filed suit to seek release of the withheld documents, and eventually FERC settled with STS to release the information.  However, attorneys for STS had to spend over $60K in legal fees to get to that point.

FOIA laws provide for the recovery of legal fees when the complainant prevails in a FOIA suit.  The court examined whether STS was eligible to recover legal fees.   The standard for the court is: 
The D.C. Circuit has instructed this court “to consider at least four criteria in determining whether a substantially prevailing FOIA litigant is entitled to attorney’s fees: (1) the public benefit derived from the case; (2) the commercial benefit to the plaintiff; (3) the nature of the plaintiff’s interest in the records; and (4) the reasonableness of the agency’s withholding.”
On the first factor, FERC claimed that there was minimal public value in releasing the documents, that they represented "provincial concerns not shared by the public at large."  However, the court found that media and Congressional interest in the information, even if drummed up by the litigants themselves, demonstrated significant public interest in the action.

On the second and third factors, FERC claimed that STS Energy, while not technically the subject of records requested, was “deeply intertwined with the entities that FERC is investigating,” including Powhatan Energy Fund, LLC.  FERC reasoned that because STS Energy was "intertwined" with the Powhatan, the subject of one of its market manipulation investigations, the firm had a private interest in the disclosure of the records.  FERC believed that the requests by STS were part of Powhatan's litigation strategy and that the company "used FOIA requests to circumvent the fact it has not been entitled to obtain discovery from FERC in the pending litigation."  That's right, Powhatan was not entitled to any discovery while FERC was conducting its investigation.  The first opportunity for discovery may have come after the investigation was completed, if the company had elected to try the matter before a FERC administrative law judge.  Instead, Powhatan elected to try its case in court.  Once at court, FERC claimed that the court was restricted to simply reviewing FERC's decision, and that Powhatan was not entitled to discovery or adjudication of the facts leading to FERC's assessment of penalty for market manipulation.  That matter is still pending.  However, back to the case at hand, where the court found that the two firms were "intertwined" and that there was a "private interest" in requesting the records. 

On the final factor, the court found that FERC didn't have sufficient reason for withholding the documents.  FERC defended its conduct in withholding as "good faith" because it eventually released the records without a court order.  However, FERC did not release the records before legal fees were incurred.

This left the court with weighing four factors, two for, and two against.  The court ultimately determined that the fourth factor carried the greatest weight.  It was FERC's game playing trying to avoid release that caught them in the end.

Lawyers that go all broody over documents rarely win.  And now it's going to cost FERC $60,168.19.
3 Comments

Your Tax Dollars At Work Making Useless Conclusions

10/5/2016

5 Comments

 
Our government loves to spend money on studies and reports to inform its actions.  However, some government reports just leave the governed scratching their heads.  That's the case with the U.S. Department of Energy's Building Electric Transmission Lines:  A Review of Recent Transmission Projects.

The administration's Quadrennial Energy Review "...recommended that the Department of Energy (DOE) conduct a national review of transmission plans and assess barriers and incentives to their implementation."  The DOE tasked its Lawrence Berkeley National  Laboratory (LBNL) to prepare a report to support its response to this recommendation.  Lawrence Berkeley is an expert on the physical sciences.  Maybe the idea was to apply physical "science" to administrative and social problems?  But it doesn't work.  There's nothing scientific about transmission planning, permitting and siting.  In fact, the biggest problem with this issue is that industry and government has been attempting to make it purely scientific for years and have failed miserably because human factors not considered in science keep derailing the best laid plans of business and government.  DOE might as well have sent a carpenter to install plumbing.

But LBNL bravely soldiered on.  It "selected" nine recent transmission projects for its study.  No mention of how these projects were selected.  It's almost like they cherry picked a representative sample based on secretive criteria.  Who selected these nine transmission projects, and why?  I'd sort of expect something at least equivalent to the standards applied to elementary school science fair projects from LBNL.  Is this how they set up all their experiments?  Any teacher can tell you that the subjects of your case study can drastically affect your conclusions when not selected scientifically.

LBNL selected a mix of both failed and successful merchant and regionally cost-allocated transmission projects.  But it failed to delve very far into how the merchant vs. regionally allocated factor alone affected the projects' success.  A regionally cost-allocated project enjoys a rebuttable presumption of need during the permitting process, while a merchant project relies on committed customers to demonstrate need.  Beyond this broad statement, no attention was paid to how lack of committed customers for merchant projects may have played into failure in the state permitting process.

LBNL used four criteria to evaluate its selected projects. 

1.  The State Approval process.  States have authority for siting and permitting transmission projects.
2.  NEPA Compliance.  Projects sited on federal land must go through the administrative quagmire of the NEPA process.
3.  Public and Stakeholder Involvement.  Why isn't "the public" a stakeholder?
4.  Economic and Commercial Circumstances.  Transmission project economics is always changing.  When combined with a long approval process, transmission economics almost always die a slow, painful death.

So, let's talk about some of the samples.

The Champlain Hudson Power Express.  This project has sailed through permitting.  LBNL thinks this was due to a "proactive" effort on the part of its developers to negotiate with stakeholders during permitting.  The real secret here is that this project is routed entirely underground along road and railway rights of way.  Because it wasn't routed through or visible from private property, it did not inspire any opposition.  Since there was no public opposition, it was not delayed and did not have to waste money on third party advocacy and propaganda efforts to create an aura of artificial support.  This is the most important conclusion revealed in LBNL's study, but sadly LBNL failed to recognize it.

The Potomac-Appalachian Transmission Highline (PATH).  Talk about stating the obvious:

The PATH project is an example of a project that faced significant public opposition.
All of these projects, save the Champlain Hudson project, probably faced significant public opposition.  Public opposition drives the state approval and NEPA processes and causes expensive delays which affect the economic and commercial circumstances.

The Grain Belt Express project.  Another example of significant public opposition driving the state approval process.
As part of its analysis of the public interest, the PSC acknowledged the substantial opposition to the project expressed by business owners, farmers, and individual landowners across whose properties the project was proposed to cross. The Missouri PSC noted, “In this case, the evidence shows that any actual benefits to the general public from the Project are outweighed by the burdens on affected landowners.”
And has GBE done anything to ameliorate that public opposition?  What if it had decided to re-route its project underground along roads and railways?  But, it didn't.  Instead it came up with that weak tea of the MJMEUC "contract" (obviously LBNL didn't bother to scientifically READ that contract and simply took GBE's word for its efficacy).  Seems like it's getting more and more expensive to be GBE with no clear avenue to success.  How much money could this project have saved if it had been properly routed to avoid public opposition in the first place?  Maybe enough to route it underground?  And what if it actually had customers in order to "...rely on buyers of bulk transmission services to establish a project’s financial viability"?  LBNL skates over the fact that Clean Line's problems are of its own making by proposing a purely speculative project with no customers.

The Susquehanna Roseland project.  LBNL seems to think that "mitigation," aka bribes, paid to the National Park Service cost the developer money.

The National Park Service, for example, required significant and expensive mitigation measures from the developers for the Susquehanna-Roseland project in order to gain its approval for completion of the portion of the line that crossed the Delaware Water Gap National Recreation Area, which it is mandated to protect.
The "mitigation" actually turned into a cash cow for the developers.  The ratepayers ended up footing the bill for the $60M "mitigation," as well as an obligation to  pay the developer 12.9% interest on the money over the 40 year life of the project.  It didn't cost the developers a dime.

So, what were LBNL's conclusions?
The development of a transmission project is a commercial venture involving investors who are prepared to incur significant, yet ultimately limited, up-front development costs in return for the opportunity to earn future profits from the sale of transmission services and/or a regulated return on invested capital. Adopting a developer’s perspective enables us to look at the factors reviewed in this report as ones that affect either the cost or time required to construct a transmission project. The extent to which these factors represent barriers to the implementation of transmission projects is thus an assessment of whether these costs or time requirements are avoidable or necessary.
LBNL concluded that these costs are necessary, but that some could be avoided.
There are documented examples of project developers who have sought to reduce these costs and associated time requirements through up-front information sharing and joint (and early) development of mitigation approaches (including abandonment of early proposed and development of new routing options). The success of these activities has hinged largely on the extent to which they lead to meaningful engagement and tangible commitments to address public concerns over line routing.
In other words, coming to a community with a problem and allowing constructive engagement into crafting a solution allows the community to buy into and own the solution.  None of the sample projects actually accomplished this in practice.  They just made smarter routing decisions (underground on public rights of way) in the first place.  Schmoozing and buying off local governments and other "stakeholders" (such as native American tribes, environmental groups, chambers of commerce, etc.) in advance of revealing agreed upon routes to the public doesn't work.  If the newly affected  public (i.e. landowners) did not have a role in crafting the solution, they will oppose it.  The trick is not to propose anything that the landowners can get upset about, such as burial on public transportation rights of way.
The state-centric public-interest issue that arises most vividly for multi-state transmission projects involves the so-called “fly-over” states. These states are situated between the states that are the starting and ending points for a long-distance transmission project. The initial decisions by the Missouri PSC to deny the CPCN application for Grain Belt Express exemplify this issue. The public-interest issue raised by states in the middle is that, at bottom, they are being asked to bear significant portions of the cost or adverse impacts of a project, yet they do not believe they are being provided with sufficient opportunities to share in the benefits of the project.

The LBNL acknowledges the cost of what it calls "side payments" to fly-over states to provide the appearance of some state benefit.  What they mean is construction of substations in fly-over states, claims of jobs, taxes and economic development, political donations to state elected officials, funding for other state or local projects, donations to local universities or public interest organizations, and non-binding "contracts" with local businesses.  It's nothing but smoke and mirrors used to create the appearance of local benefit.  When the smoke clears, the fly-over state is left with nothing, but by that time it's too late and the project is built.  Instead, how about actual benefits for fly-over states, instead of hot air and empty promises?  If a project is not needed in a state, then there can never be a "benefit" from it.  You can't create "benefit" from something unneeded, otherwise it's just a straight up bribe.  The transmission industry needs to quit wasting its money on this stuff and simply design better projects that have a natural public benefit.

The need to satisfy a middle state’s public-interest requirements is a classic example of what economists describe as the role and importance of “side payments.” In this instance, the gains from trade must be sufficient to cover side payments to affected parties who have standing but who would not otherwise benefit from the transaction. Thus, the situation faced by developers, such as those for the Grain Belt Express project, is tangibly and fundamentally (but not solely) commercial in nature. Notably, as discussed, the developers for Grain Belt Express recently reached an agreement to sell power from the project to an association of municipal utilities in Missouri and, based on this agreement, plan to re-file their request for state regulatory approval. It remains to be seen whether the fact of a Missouri entity signing an agreement that could be seen as demonstrating the public-interest value of the project in Missouri will result in the Missouri PSC approving the project on its third attempt in the state.

By the way, GBE did not reach an agreement to "sell power" from the project to MJMEUC, or anyone else.  GBE sells transmission capacity.  It does not sell power.  The only thing GBE has "sold" is space on a wire.  Power sold separately from another vendor.  LBNL needs to apply a little physics to its thinking process to avoid allowing industry propaganda to infiltrate its conclusions.

LBNL also concluded that the federal government is a circus without a ringmaster and the NEPA process is FUBAR.

Wrapping all its conclusions together, LBNL comes up with this:
Developing a transmission project involves simultaneously managing two categories of commercial risk. One is the risk associated with securing the capital necessary to build the project. Eto (2016) focused on one example of capital risk: that associated with seeking regional cost allocation. The other category encompasses risks associated with the actual construction of a project. This report is focused on a key subset of these project-construction risks: the cost of satisfying the due process requirements of state and federal agencies involved in permitting and siting lines, which is often increased when there is organized public opposition to the project. These are necessary costs associated with transmission-line construction. Some can made more manageable through proactive actions by developers. Still others can be made more manageable through the actions of federal and state agencies to enhance the efficiency and accountability of their processes. Thus, while the project review process can be slow and add costs to project development, on the whole transmission lines are being built. Moreover, there are promising signs that both groups are taking actions to improve the processes, both in terms of their duration and the quality of the decisions that get made. We found examples of merchant transmission projects successfully gaining needed approvals and being constructed. Their experiences, in particular, suggest that if the economics of potential projects are sound, someone will find a way to build them.
These costs, ultimately borne by electric customers, become completely unnecessary when projects are designed properly in the first place.  A project that doesn't intrude on the community won't foment opposition.  Underground that thing on public rights of way!  Projects that provide no benefit to fly-over states don't belong in those states to begin with!  Solve your transmission problems with resources closer to home.  It doesn't take a rocket scientist...

As far as the inefficiency of the federal government, can't help you there.  Maybe another report on how to reform the federal government to make it work for the people instead of the special interests?  Maybe the special interests can fund it next time around.
5 Comments

    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.


    Need help opposing unneeded transmission?
    Email me


    Search This Site

    Got something to say?  Submit your own opinion for publication.

    RSS Feed

    Archives

    January 2025
    December 2024
    November 2024
    October 2024
    September 2024
    August 2024
    July 2024
    June 2024
    May 2024
    April 2024
    March 2024
    February 2024
    January 2024
    December 2023
    November 2023
    October 2023
    September 2023
    August 2023
    July 2023
    June 2023
    May 2023
    April 2023
    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    January 2011
    December 2010
    November 2010
    October 2010
    September 2010
    August 2010
    July 2010
    June 2010
    May 2010
    April 2010
    March 2010
    February 2010
    January 2010

    Categories

    All
    $$$$$$
    2023 PJM Transmission
    Aep Vs Firstenergy
    Arkansas
    Best Practices
    Best Practices
    Big Winds Big Lie
    Can Of Worms
    Carolinas
    Citizen Action
    Colorado
    Corporate Propaganda
    Data Centers
    Democracy Failures
    DOE Failure
    Emf
    Eminent Domain
    Events
    Ferc Action
    FERC Incentives Part Deux
    Ferc Transmission Noi
    Firstenergy Failure
    Good Ideas
    Illinois
    Iowa
    Kansas
    Land Agents
    Legislative Action
    Marketing To Mayberry
    MARL
    Missouri
    Mtstorm Doubs Rebuild
    Mtstormdoubs Rebuild
    New Jersey
    New Mexico
    Newslinks
    NIETC
    Opinion
    Path Alternatives
    Path Failures
    Path Intimidation Attempts
    Pay To Play
    Potomac Edison Investigation
    Power Company Propaganda
    Psc Failure
    Rates
    Regulatory Capture
    Skelly Fail
    The Pjm Cartel
    Top Ten Clean Line Mistakes
    Transource
    Washington
    West Virginia
    Wind Catcher
    Wisconsin

Copyright 2010 StopPATH WV, Inc.