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Clean Fantasies

11/30/2016

4 Comments

 
There's been lots to laugh about in Clean Line's post-election media coverage.  It's just so ridiculously inaccurate... and when sadly clueless environmental warriors petition the TVA to do something that's completely impossible, what else can you do but laugh, right?

The Southern Alliance for Clean Energy is currently running a petition asking the Tennessee Valley Authority to buy a commodity from a company that does not sell that commodity.
We strongly encourage TVA’s board of directors to immediately contract for at least 1,000 megawatts of wind power on the Plains and Eastern Clean Line. We need your help to urge TVA to buy wind power from Clean Line today
If this sounds possible to you, you're probably not alone.  Plenty of reasonably intelligent reporters have somehow gotten the idea that Clean Line Energy Partners sells electricity.  Clean "wind" electricity, for that matter.  I wonder where they got that misconception?  Was it from Clean Line?  If so, Clean Line should really be ashamed of itself... or dinged for fraud.  If not, Clean Line bears a tremendous responsibility to correct all the media and special interest groups that believe Clean Line sells electricity.

Clean Line Energy Partners does not sell electricity!  Not now, not ever.  I know I've explained this all before, ad nauseam, but CLEP is a transmission company.  The only thing they propose to own in the future is a transmission line.  They will not own or operate any electrical generators, and if they did, it would open a whole new can of regulatory worms that I won't get into here.  CLEP claims to be an independent transmission company, unaffiliated with any electrical generators.  This is a promise they made to the Federal Energy Regulatory Commission in their application for negotiated rate authority.  FERC allowed CLEP to sell transmission service by negotiating rates with a group of interested customers.  Transmission service is the only thing CLEP sells.

You don't buy your Christmas presents from UPS.  You buy them from Amazon, and UPS delivers them to your house.  UPS is the carrier, not the manufacturer, of your goods.  Clean Line is the UPS of electricity delivery.

If TVA wants to purchase "1,000 MW of wind power," it must contract with a company that could generate 1,000 MW of wind power.  Clean Line is not a generator.  Therefore, it is completely impossible for the TVA to contract for "1,000 megawatts of wind power on the Plains and Eastern Clean Line."  While it could contract with a generator that includes delivery on the Plains & Eastern Clean Line in its pricing, no such generator exists, and the TVA has no power to create one, much less one by the end of this year when the production tax credits expire. 

SACE's petition is nothing more than Don Quixote, tilting at windmills.
A colossal waste of time!

And, even if it could do the impossible, power purchase decisions at the TVA aren't made solely by its Board of Directors, acting on a whim at the urging of environmentalists.  In my experience, environmentalists have a very poor grasp of how the electrical system works, along with the myriad regulations that govern it.  Power purchase decisions by the TVA are made very carefully by its huge staff of planners, who carefully balance price, deliverability, and need for power capacity.  This staff makes recommendations, and the Board defers to their expertise.  Whatever Kabuki Theater is performed at quarterly Board meetings during public comment sessions by Clean Line and its supporters can't change it.  The TVA has evaluated a purchase of transmission capacity from the Plains & Eastern Clean Line many times and has thus far concluded that it would not be economic or needed by TVA's customers.  End of story.  SACE's petition is a fantasy.

And, speaking of fantasies, have you seen the gushing fantasies of CLEP President Michael Skelly, whose double-talk and glittering generalities have come positively unglued in the wake of the recent election?
If you build it, the wind developers will come, Clean Line has wagered.
But they haven't come.  And that's just the problem.  Clean Line can't build because it has no customers.  It can only build if it has customers to create a revenue stream to finance the project.  Wind generators haven't come because they have no customers lined up to buy power that can't be delivered in order to create their own revenue stream.  Customers aren't coming because there is no transmission line, because there are no generators, because there are no customers.  Chicken, egg.  Everyday is Groundhog Day at CLEP!
Skelly can point to progress overseas with HVDC but also, closer to home, the Pacific DC Intertie bringing approximately 3,100 MW of mainly hydro power from the Bonneville Power Administration grid in northern Oregon to power almost half of Los Angeles.
“It was much debated for years,” Skelly recalled. “Today, that line is about 45 years old and has been upgraded a couple of times. It’s the backbone of the electric grid in the western United States.”
45 years old?  Skelly is using 45-year old technology for his project.  Remember that.
“The exciting thing is we’re putting together assets” which will contribute to the future wealth and diversity of the American economy, Skelly said. “We don’t know exactly where we’ll get our energy over the next 100 years, but we know it’s going to be different. We’re solving another challenge in how to get the best wind to market.”
Assets?  What assets?  What is he talking about?  The only beneficiaries of Clean Line are its super-rich 1% investors, who think they can make a bundle off the last administration's clean energy scam.  The only ones excited by that are the investors and Skelly.  The rest of us know where we'll be getting our energy over the next 100 years, from small, distributed generators in our own basements or neighborhood.  That's what's new.  That's what's different.  A one-way electrical highway designed to keep us all feeding at the trough of big energy generators is yesterday's news.  Big transmission is dead.
Transmission lines have long been the almost exclusive domain of utilities, which use them to carry electricity from power plants to their distribution systems. But now a handful of companies outside those monopolies are developing much longer transmission projects paid for not by the people using the electricity, but the companies generating it - largely wind and solar farms.

Clean Line Power has four such projects under development. Founder and CEO Michael Skelly says most utilities have worked with his company, eager to get their hands on affordable and emissions-free power. But others have not.

Transmission "is the domain of utilities, but utilities typically focus on one state or a piece of one state," Skelly said. "If you look at Oklahoma, you have a fragmented set of players. Even though they sit on this fantastic wind resource, they're not chartered to move electricity to Atlanta."

What?  Most utilities are eager to get their hands on Skelly's power?  Where?  Who?  If that was true, CLEP would have some customers.  Obviously "most" utilities are not eager to commit themselves to  geographically-set transmission line capacity without a signed power purchase agreement.

And Skelly still thinks his projects are going to be paid for by wind and solar generators?  What generators?  I haven't seen one new generator advertise itself as a customer of Clean Line.  New wind and solar generators are unlikely to spring up in the new political climate.

And, who "charters" electricity to be moved across state borders?  What?  I've honestly never heard of an interstate electricity "charter."  That one comes straight from Skelly's rather fertile imagination.  No wonder his company is struggling.  C'mon, man, tell the damned truth for once, instead of making up crap and talking in glittering generalities and fantasies!

If nothing else, watching this company come unglued is entertaining.  Pass the popcorn.
4 Comments

Why Grain Belt Express is a Bad Deal for Missouri

11/29/2016

6 Comments

 
Public hearings on Grain Belt Express' most recent application (its third) to the Missouri Public Service Commission are set to begin next week.  Another huge public turnout to oppose the plan is expected. 

None of Clean Line's smoke and mirrors about project "benefits" has any basis in fact or logic.

Clean Line's proposed "income" for landowners is a huge fabrication.  Any payments to landowners are a lame attempt at compensation for property taken from landowners through the courts.  In exchange for payments, landowners would be trading rights-of-way across their property.  Eminent domain law requires the taking entity to compensate landowners for the market value of property taken from them.  It is not additional "income."  Income would allow a landowner to gain something valuable while losing nothing.  The truth of the matter is that Grain Belt Express is proposing to make landowners whole for property taken from them.  It's a wash, not a gain.  It's no different than Walmart showing up at your house and cleaning out your pantry and freezer and then giving you "market value" for the goods it has confiscated.  Meanwhile, Walmart has your food and can sell it to others for a profit.  There are no benefits to landowners from construction of Grain Belt Express.

Clean Line's claims of increased tax revenue for counties crossed is another disingenuous glittering generality.  In essence, it is a proposal that economic development opportunity trumps your right to own and enjoy property.  Everyone's house would generate more tax revenue if it was a Walmart.  Economic development alone is not reason enough to trample on private property rights.  This is even more true when looked at through the public utility lens that Clean Line hides behind.  Public utilities have enjoyed eminent domain authority when a project is necessary to serve the public.  It's a high burden that a utility must carry to demonstrate that its project is necessary to serve the public.  Simply stating that if property is taken and a project built that a public need will develop, is not enough to carry this burden to take property in the first place.  Especially when the "utility" is Clean Line, who has no firm customers for its transmission line.  It's all based on future speculation, and that's not good enough.

Clean Line's claims of increased tax revenue also fail to calculate any detriments Grain Belt Express will bring to affected counties.  Properties crossed by electric transmission lines lose value.  This lowers the assessed value of affected properties and decreases property tax revenue to the county.  In addition, the burden of hosting the transmission line will cost the county in increased public safety expenses, both during the invasive construction of the project and for years afterwards when the counties must purchase equipment and supplies to prepare for any transmission line disaster that may happen in the future.  For example, substation fires require different types of equipment and special chemicals to fight.  Counties could spend their entire "windfalls" supporting Clean Line's infrastructure in their locality.

Clean Line's claims that its Grain Belt Express project will save Missourians $10M a year in energy costs is not based on fact.  Although Clean Line witnesses make this claim in testimony to the PSC, there is nothing to back it up.  No analysis, no numbers.  Based on documents made public months ago, the $10M claim was concocted by Clean Line when it attempted to sell its capacity to Missouri municipalities.
Preliminary calculations, assuming existing production tax credits for wind project participation in the project, could reduce costs by as much as $10M/year or $10 per megawatt hour compared to delivery of other wind projects from SPP to MISO.
Preliminary calculations?  Clean Line's calculations, which have yet to be revealed to the public.  "Assuming existing production tax credits" assumes too much.  At the end of this year, the production tax credit will begin phase out and the subsidy for wind energy will be cut 20%.  The following year it will be cut 40%.  The next year it will be cut 60%, eventually disappearing altogether within 5 years.  Couple this with our friend Bob from the Hannibal BPW's recent statements that he has yet to contract for any wind energy to serve the City of Hannibal.  That's because the generators Clean Line says will develop to use its project haven't been constructed yet.  The only thing Missouri municipal utilities have tentatively contracted for with Clean Line is transmission capacity, not energy.  Energy must be purchased separately, and come from the specific geographic area close to Clean Line's proposed converter station in southwest Kansas.  It's not about purchasing the cheapest wind energy available in today's market, it's about speculation with unbuilt generators to supply energy via an unbuilt transmission line.  Too many variables to accurately calculate any cost savings to Missouri, since Clean Line cannot and does not sell any energy proposed to be transmitted to Missouri via its project.  How was this $10M "savings" calculated when there are no energy prices to work with?  Sort of looks like Clean Line simply made it up out of hypothetical numbers presented in a light most favorable to Clean Line.  But, hey, at least the Missouri municipalities have the option to back out of their "contract" with Clean Line at any time in the future and purchase nothing.  If cities sit around waiting for Clean Line to ship them energy from generators that don't exist, at prices that have no basis in reality, then the cities may get stuck paying much higher prices to procure energy down the road if nothing develops and they're left without enough resources to serve customers.  Coulda, woulda, shoulda... by law, utilities are required to have adequate resources under contract, not base their future service on hypotheticals.

And simply parading a collection of politicians and business interests who stand to personally profit from the construction of the project isn't support based on fact and logic.  It's based on money, pure and simple.

True grassroots opinion based on fact and logic cannot be bought.  True grassroots opposition will drown out expensive, manufactured "support" and will carry the day at the upcoming public hearings.  Won't you lend your voice?

The public hearing schedule:
 
Dec. 7, 2016: Monroe City
Knights of Columbus Hall, 424 South Locust
The local public hearing will begin at 12:00 p.m.*

Dec. 7, 2016: Hannibal
Theater Auditorium, Hannibal-LaGrange University, 2800 Palmyra Road
The local public hearing will begin at 6:00 p.m

Dec. 8, 2016: Marceline
Walsworth Community Center, 124 East Ritchie
The local public hearing will begin at 12:00 p.m.*

Dec. 8, 2016: Moberly
Moberly Municipal Auditorium, 201 West Rollins
The local public hearing will begin at 6:00 p.m.

Dec. 13, 2016: Cameron
Cameron Community Center, 915 Ashland Avenue
The local public hearing will begin at 12:00 p.m.*

Dec. 13, 2016: Faucett
Mid-Buchanan High School, Multipurpose Room, 3221 SE Route H
The local public hearing will begin at 6:00 p.m.

Dec. 14, 2016: Polo
Community Center at Stagecoach Park, 1010 Main Street
The local public hearing will begin at 12:00 p.m.*

Dec. 14, 2016: Carrollton
Rupe Community Center, 710 Harvest Hills Drive
The local public hearing will begin at 6:00 p.m.
 
*In order to be able to move equipment to the next local public hearing that same day, 12:00 p.m. local public hearings will end no later than 4:00 p.m.
 
For more very important info. please visit Block GBE-MO.
6 Comments

Can You Smell the Fear?

11/17/2016

3 Comments

 
“Mr. Trump talks about infrastructure, he talks about jobs,” said Michael Skelly, founder and president of Clean Line Energy Partners, a company based in Houston that builds transmission lines for renewable energy.

“What we’re creating are welding jobs, steel manufacturing jobs, in Kansas, Oklahoma, Iowa,” he said. “These are projects that create income for landowners, create jobs in the middle of the country.”

Smells like fear to me.  Clean Line Energy Partners talks a big game, but the very fabric upon which their arrogance and contempt for Midwestern landowners has been built over the past 7 years has been ripped asunder.  A new regime is taking shape, and no matter how Skelly tries to remake himself at this late stage, he no longer has any leverage.

There's a whole bunch of chatter from these arrogant blowhards about how Republicans support clean energy, or about how Republicans support things like jobs, infrastructure and economic prosperity.  But Clean Line's projects don't measure up.

Jobs?  Skelly thinks his overly expensive and invasive "infrastructure" projects should be built because they would "create" welding and manufacturing jobs?  Building Clean Line would be temporary, while its detrimental effects would last a life time.  For every temporary "job" created by Clean Line, many more small businesses and family farms would either be destroyed or have their productivity impacted.

And for what?  Not for the personal wealth of landowners.  Landowners have resoundingly rejected Clean Line's compensation offers in all impacted states.  Compensation... that's right, it's not "creating income" for landowners, Clean Line's offers are lame attempts at compensating landowners for their loss of property.

Energy imported via a Clean Line could impact long-time energy generation jobs in "beneficiary" states.  If you believe Sierra Club's rhetoric that Clean Line would "shut down coal plants" then along with that comes a whole bunch of displaced workers.  Are they supposed to pick up and move to the Midwest to get a new job manufacturing steel?  Or welding things for a couple of years before they're back in the unemployment line?

It's all about sustainability.  Energy should be local, and it can also be "clean."  Sustainability means that no one is harmed by an energy project.  Clean energy may be good, clean energy may be cheap.  But not when it depends on taking something from one part of the country to give it to another.  Not when it depends on building billions of dollars of monstrosities to get it to market.

So, while Republicans may support clean energy, and they may support infrastructure, it doesn't mean they automatically support gigantic and expensive for-profit boondoggles like Clean Line.  In fact, all the Trumpesque blather about "infrastructure" specifically talks about transportation infrastructure.  When it comes to energy, a Trump administration promises to
...scrap the $5 trillion dollar Obama-Clinton Climate Action Plan and the Clean Power Plan and prevent these unilateral plans from increasing monthly electric bills by double-digits without any measurable effect on Earth’s climate. ​
And furthermore, it states
He will defend Americans' fundamental rights to free speech, religious liberty, keeping and bearing arms, and all other rights guaranteed to them in the Bill of Rights and other constitutional provisions.  This includes the Tenth Amendment guarantee that many areas of governance are left to the people and the States, and are not the role of the federal government to fulfill.
Such as state transmission permitting and siting laws, which have been circumvented using the federal Department of Energy's trumped up federal eminent domain authority under Section 1222 of the Energy Policy Act?  Good riddance to bad rubbish!

It looks to me like Clean Line is on the verge of hysteria over their sudden reversal of fortune under a changing regime in Washington.  
"Election Day was a big sea change in America," Jimmy Glotfelty, executive vice president for Clean Line Energy Partners, told the TVA board last week. "But we believe that just because we've gone from Democrats to Republicans (in the White House) that does not change the need for jobs and low-cost energy in America and we believe we will provide that. We've been before this board for the past seven years and our project dynamics have not changed."
But it does change, Jimmy, and you looked pretty overwrought as you were trying to convince the TVA board that nothing has changed.  You've been trying to sell your project to the TVA for 7 years, but they've resolutely ignored you.  That certainly won't change.

Remember, whatever the shade of lipstick you slap on your pig, it's still a pig.

Clean Line is in big trouble.
3 Comments

Clean Line Deathwatch

11/15/2016

10 Comments

 
Arkansas Business reports this morning that Clean Line "preferred vendor" General Cable is likely to shut its doors before it actually manufactures any cable for the long-delayed project.
Picture
Being a "preferred vendor" didn't help General Cable.  Being a "preferred vendor" isn't useful on a project proposed by a company with no financing, no revenue, and no customers.  It's pie in the sky empty promises, and any company whose financial success depends on "contracts" with Clean Line is probably in big trouble.  This may be just the tip of the iceberg.

Clean Line got a huge kick in the jimmies last week when wind turbine-hating Donald Trump was elected President.  The company's business plan depended on eastern utilities being forced to add huge amounts of renewables to their portfolios that could only be supplied by big Midwestern wind and new transmission lines.  First it was a federal carbon tax, which never came to fruition.  Then it was state renewable portfolio standards, which ended up favoring local resources, instead of long-distance imports.  Then it was the EPA's Clean Power Plan, currently tied up in the courts and not expected to survive.  There's no incentive for eastern utilities to buy huge amounts of new transmission capacity to import hypothetical renewables thousands of miles, and it's not looking like customer interest in a "Clean Line" is going to rebound during a Trump administration.  If you think Clean Line struggled to find customers over the past 8 years, its future is even more grim now.

Despite the initial threat of mass public temper tantrums, which has now morphed into false bravado, big wind is in serious trouble.  Do they think that just saying they're already too committed to their grandiose plan to stop now is going to make a difference?  And, hey, how about those current claims that big wind is so economic that they don't even need the subsidies they think they have locked down for the next 4 years?  If big wind is so economic, I challenge them to stop taking the handouts they obviously don't need, which is estimated to cost the U.S. taxpayers $14.5B through 2025.  To add insult to injury, most of this taxpayer largesse is funneled out of the country to foreign wind companies.  On a state level, wind incentives cost state taxpayers millions to lower the cost of power that is shipped out of  state and provides absolutely no benefit to state residents.  In fact, shipping more power out of an export state causes power prices in the state to rise.  It's simple supply and demand.  Oklahoma seems to be on the brink of cutting this huge drain on its taxpayers.  Other states may soon follow suit, and add repeal or reform of renewable portfolio standards to legislative goals.  The Trump phenomenon caused plenty of Republican trickle down into state legislatures and change is pretty much guaranteed.

Policy moves with the speed of a glacier in Washington, DC.  It's taken 8 years for the present administration to greenwash big wind into existence.  Over the next 4 years, the new administration is going to systematically dismantle and cripple it because it can't perform without subsidies and favorably biased policy.  Big wind probably won't survive because economics and better ideas will remake our energy future in the short term.  The void must be filled, and progress waits for no man.  Midwest wind powering the entire country was never a good idea and it's doubtful it can sustain itself during this period of uncertainty.  Right now, we're all in a holding pattern, waiting to see what happens, and utilities are no different.  But they will adapt and quickly find new ways to tweak policy to complement their bottom lines, without big wind.

Adaptation probably won't include paying a premium for new transmission lines.  Factually baseless, bogus claims of big wind front groups and their sycophants cannot stop the inevitable.
If you’ve never heard of the Global Sustainable Electricity Partnership before, join the club. It has the potential to influence rapid change in the global energy sector...

The exclusive organization (by invitation only) characterizes itself as “an entity with a unique operational knowledge of the electricity sector:”

Among the group’s four main recommendations is this one:

"Make urgent progress with innovative research, development and demonstrations of advances economically viable technologies that will reduce greenhouse gas emissions and accelerate the efficient generation, delivery and end ‐ use of electricity."

That goal dovetails neatly with U.S. Department of Energy initiatives under the Obama Administration. Many of these are already under way and are virtually irreversible. In some states they enjoy strong support from Republican policymakers. One good example is the 720-mile Plains & Eastern transmission line. It will deploy GE transformer stations for the economical delivery of 4,000 megawatts of wind power, sourced from wind farms located in the “red” state of Oklahoma.

These big city sycophants are only kidding themselves if they think that "recommendation" insures Clean Line will survive.  Clean Line is the antithesis of the stated goal.  It's not economic and it is not efficient new technology.  The U.S. Department of Energy's goals will change considerably under new leadership, putting its Sec. 1222 ad hoc "program" in jeopardy. What has been a corrupt process under the current administration is not "virtually irreversible." I hope lying to themselves about where Clean Line is headed provides the safe space they need for their cry-in.  The reality of Clean Line is that it is also "enjoying" strong opposition from Republican policymakers in "red" states, such as Arkansas.  Even in Oklahoma, where the Governor has previously been supportive, continued financial support for wind exports is on the chopping block. 

The globalization of America has come to a screeching halt.  Only one company in the mentioned "Partnership" is an American company, and it only supports big wind if it can make some big bucks building and owning its own little cash cow wind projects.  There's no room in there for Clean Line Energy Partners.  Maybe they should start courting the other foreign "partners" and move their operations overseas?

They're dead here.  Middle America is tired of having its fate dictated by greedy foreign corporations and their elite policy wonks in Washington, DC.
I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve.
Isoroku Yamamoto
Damn right.
10 Comments

Meanwhile...

11/9/2016

6 Comments

 
...down at Clean Line headquarters...
Whatever your day is like, remember to be kind.
6 Comments

"Clean" Line's Dirty Little Secret

11/2/2016

4 Comments

 
I have a very good friend who always puts the word "clean" in quotation marks when writing about a certain transmission line.  She's been doing it for years.  She knew something Clean Line has only publicly admitted recently... that "Clean" Line's transmission projects would carry dirty energy.

This really isn't news.  It was first reported by the folks in Arkansas several months ago when they found "Clean" Line marketing their Plains & Eastern "Clean" Line to eastern utilities as a way to ship fossil fuel power between regions and expand its market.

Now "Clean" Line admits its Plains & Eastern project will only carry wind energy an average of 60% of the time, and is marketing the other 40% of its capacity as an arbitrage opportunity to be resold to shippers of other kinds of power.

"Clean" Line is so desperate for customers right now, they don't care what the line is used for, as long as someone, anyone, buys some capacity.

Let's take a look at Mario Harturdo's recent presentation at a United States Association for Energy Economics conference.  He expounds on the Mid-South and Southeast's "strong demand for renewable energy."  Except that can't be right.  If there was a "strong demand" then maybe "Clean" Line would have had customers pushing and shoving to get in line to purchase its capacity for years.  Instead...
So, what's the problem?  "Clean" Line can only sell capacity on a hypothetical transmission line that can't get off the planning page.  Sure, utilities will add renewables to their portfolios, but the utilities want firm pricing and the assurance that the resource will be there when they need it.  "Clean" Line can provide neither.

Here's "Clean" Line's "business model."
Converter stations function as on- and off-ramps; generators connect to the on-ramp and load- serving entities receive low-cost wind power at off- ramps

Clean Line will sell transmission service to shippers via long term transmission contracts -
Those who use the line, pay for it

Except it's only "low-cost wind power" approximately 60% of the time.  Shippers?  What shippers?  I haven't seen one generator develop and market themselves as a Clean Line shipper.  But, but, but... "Clean" Line had so much "interest" to its open solicitation in 2014, and everyone was just waiting for DOE participation to get their deals arranged within mere days or weeks of the March decision.
Clean Line Energy has lined up firm commitments for about 100 MW thus far, but it has term sheets for more than 3,500 MW that outline key terms for negotiating with customers following DOE’s decision, Kottler told TransmissionHub.

Although the project has a couple agreements with utilities to take wind power through the transmission line if it is built, many utilities and interested companies have been waiting for DOE’s ruling before making such commitments, Michael Skelly, president of Clean Line Energy said during the March 25 conference call.

“We’re seeing vast and strong indications of interest” and Clean Line Energy will firm up commercial support for the project in the coming days and weeks, with the DOE decision an essential part of moving those discussions along, Kottler said.

Many parties in the Southeast have been waiting for DOE’s decision to reach a deal with wind project developers, Skelly said during the conference call. During a 2014 solicitation, more than 15,000 MW of wind projects expressed an interest in using the Plains & Eastern project to move energy to markets in the South and Southeast, he said.

And after all this false bravado, Clean Line has yet to announce agreements with any customers.  And Harturdo's October presentation at USAEE tells the story... Clean Line "will sell" transmission service.  Not that it has sold it, or that it's in the process of selling it... but that it "will" at sometime in the future.  How long is everyone supposed to wait for this to happen?  How many more years do landowners in Oklahoma, Arkansas and Tennessee have to have this cloud on their property while Clean Line tries to sell transmission service to all the folks it previously claimed were anxiously chomping at the bit to sign up?  I'm thinking maybe Clean Line exaggerated, and that maybe there really isn't that much constructive interest in the project.

So, "Clean" Line seems to have changed the product they're marketing to appeal to a wider customer base.  Instead of marketing itself as a "clean" 100% wind energy transmission line, now the company claims it will be "clean" only 60% of the time.

Plains & Eastern can transport market power when the wind is not blowing
Average line utilization from wind power will be around 60%
Remaining capacity available for SPP market power delivery to MISO or PJM
Possible use of unused capacity:
• Solar
• Arbitrage opportunities

SPP market power?  I'm guessing they mean electricity from coal and gas-fired power plants in the Southwest Power Pool region.  And do you know what that means, Sierra Club?  It means your precious "Clean" Line will be extending the life of, and expanding the markets for, coal-fired power plants in the SPP region, to the tune of nearly half of its 4,000 MW capacity.  That's nearly 2,000 MW of coal-fired power plants that would stay online because "Clean" Line is built, instead of gradually being squeezed out by additional wind power being added to SPP's market.

And of course it means the name "Clean" Line is no longer honest.  I think we need to help them come up with a new name for their company so they can rebrand.  How about "60% Clean" Line?  or "Really only half-Clean Line, because we always exaggerate"?  Maybe they should go with the simpler "Rich investors' cash toilet"?  I've even got the perfect slogan - "Flush your climate change guilt away and cleanse your soul!"

And let's talk about that arbitrage thing... "Clean" Line thought it was so special, it gave arbitrage its own page in their USAEE presentation.  What is arbitrage? 
the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset.
In other words, making money out of thin air.  The arbitrager isn't manufacturing a product or adding value... it's simply buying cheap and reselling it to someone else at a higher price.  "Clean" Line is now marketing its transmission line as an "arbitrage opportunity."
Arbitrage opportunities exist between RTOs that are connected through P&E even when including additional transmission service

Utilizing unused capacity to take advantage of these arbitrage opportunities create additional value to the owner of the transmission capacity

Market power arbitrage could yield up to $60 million a year, assuming perfect execution on unused capacity up to 1000 MW of OK-TN service and 500 MW of OK-AR service over the entire project

Positive market power price differentials are valuable when delivering SPP power to PJM or MISO, whichever is higher priced, including non-firm transmission costs and losses, and negative differentials are valuable when delivering PJM or MISO power, whichever is lower priced, to SPP including non-firm transmission costs and losses

So, the "perfect executioner" would buy capacity for the sole purpose of using it to trade power between regions in order to take advantage of cheap power and artificially inflate prices.  Isn't this how Enron got into trouble?  "Clean" Line is suggesting that its customers should buy its capacity for the sole purpose of selling a cheap commodity into a higher priced market.  It's not about reversing climate change, it's about a greedy way to make money taking advantage of electric consumers.  The $60M produced by "arbitrage" comes out of the pockets of electric consumers.

"Clean" Line's presentation demonstrates that it's nothing but a cash cow dressed in a green sheep costume.  And it's also an admission that this company is still having a very hard time finding customers for its pipe dream.

"Clean" Line will never happen without customers.  Despite the company's claims that it is "negotiating" and "building" its project, it can't build anything until it has customers.  That was one of the significant conditions in the DOE's "Participation Agreement."  The DOE requires the company to have firm customers (as opposed to hypothetical "interest" or open ended "contracts" that allow escape) before DOE will participate in land acquisition.  This means that "Clean" Line is on its own acquiring easements, and the vast majority of landowners have refused to grant easements.  Only after Clean Line has firm customers will the DOE attempt to negotiate with landowners voluntarily.  My understanding is that landowners will have a whole new opportunity to negotiate directly with DOE before eminent domain use is even considered.  Clean Line is stuck for now, because it has no authority to condemn property (and neither does the DOE, according to the lawsuit filed by Arkansas landowners).

And speaking of the Participation Agreement, it sort of looks like Clean Line's 60% "clean" admission violates the Agreement.

8.27 Renewable Energy Transmission. At any time during which any Transmission Services Agreements are in effect, the Clean Line Entities shall use all commercially reasonable efforts to ensure that at least 75% of the total Electrical Capacity covered by all Transmission Services Agreement that are then in effect to be covered by Transmission Services Agreements used for the transmission of renewable energy resources; provided that, to the extent the transmission of energy from non-renewable resources is required by Applicable Law (including pursuant to any open access tariff rules), such events would not render the underlying Transmission Services Agreement from being disqualified toward the 75% threshold.

The DOE requires at least 75% of the capacity be used for renewable energy, not the 60% Clean Line is now claiming will be used for renewables.  Of course, it does say "commercially reasonable efforts" shall be used.  I guess this means that "Clean" Line's renewable transmission pipe dream is not commercially reasonable.  In other words, not only can't they produce it, they also can't sell it.

Instead of focusing on the real problem of Clean Line's lack of customers, the company is dishonestly trying to make landowners think its project is being built so they will feel trapped into signing easement agreements. 

"Clean" Line's lack of customers makes it dirtier and dirtier with every day that goes by.
4 Comments

Ut-oh, GE!

11/2/2016

0 Comments

 
Well, whoop-de-diddly-doooo, Clean Line belched another huge cloud of public relations smoke yesterday designed to cover up the fact that it's going nowhere fast.

Clean Line has entered what it describes as a "partnership" with GE to build three AC/DC converter stations for its beleaguered Plains & Eastern Clean Line project.  Partnership?  I don't think so, because it sounds more like Clean Line simply hiring a supplier.... a supplier it has no money to pay.
This will be GE’s first HVDC project in the United States since acquiring Alstom’s energy portfolio last year. This addition to our portfolio was critical.
GE... trying to breathe new life into bad ideas.  This project, so "critical" to GE's business, has a long, long way to go before building anything.  I wonder if GE has read Clean Line's "Participation Agreement" with the U.S. DOE that requires the company to have financing in place before proceeding?  In order to get financing, Clean Line would need customers.  There are no customers for Plains & Eastern.  Where does GE think Clean Line is going to get the money to pay them for 3 converter stations?

I wonder if GE has heard about the lawsuit filed in federal court that alleges the U.S. DOE exceeded their statutory authority in their review and agreement to "participate" in this project?  Does GE know that the U.S. DOE does not have the authority to condemn and take easements for a Section 1222 project?  And without easements, there's no place for Clean Line to build anything.

Yeah, good luck with that, GE.

But, hey, at least GE beat rival Siemens to a worthless contract with a company that can't get its projects off the ground.  After years of patsy Siemens stumping for Clean Line in Arkansas, Clean Line dumped them and inked a contract with their rival.  And how awkward are things going to get in Houston, doing business with two rival companies?  Clean Line announced years ago that it had signed an "exclusive agreement" with Siemens to develop, design and implement the converter stations for its Rock Island project.  Now that Clean Line and GE have become the Plains & Eastern converter station Bobbsey Twins, is Siemens' Rock Island converter station "agreement" about to be reneged?  I'd have to think that GE must have given Clean Line a much better price for the Plains & Eastern converter stations than Siemens, and, if so, why is Clean Line content to pay more for Siemens converter stations for Rock Island?

Ahhh... the kerfuffles that can ensue when a company signs "exclusive agreements" to obtain supplies from vendors years in advance of final engineering.  Who does that?  Probably not the majority of transmission owners, who prefer to source a project competitively when they're actually ready to build and have financing in place to back up any contracts that they sign.

Or is this just the tip of the iceberg?  Will we now see Clean Line jettison a whole bunch of "exclusive agreements" when the rubber finally hits the road?

And I do wonder if GE will be required to use local labor to build the converter stations?  Since GE's real muscle is the former French company Alstom (gobbled up in 2015), will the actual components be built in France and merely shipped to U.S. sites for assembly by GE contractors?

None of this ridiculous fanfare about GE contracting to supply the converters is even necessary.  Other transmission owners don't need to drum up media interest every time they sign a contract with a supplier.  Clean Line does it because it allows them to hide behind a cloud of smoke and pretend their projects are making headway, instead of answering the hard questions, such as:

Where are the customers?
0 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.


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