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Why Buy the Milk When You Can Own the Cow?

7/27/2017

2 Comments

 
Have you often wondered why Clean Line Energy Partners doesn't have any customers for its transmission projects?

Clean Line proposes to build a transmission line and sell capacity on the line to load serving entities who want to buy power from future wind facilities and ship it east to serve their retail customers.

But what if that load serving entity already owned a bunch of its own generation and transmission assets... would buying one more generator and building one more transmission line be no big deal?

Utilities make money by owning physical assets like transmission lines and regulated generators that allow them to shift the costs and risks to captive customers and earn a guaranteed return (or profit) on their ownership.

Clean Line wanted to make money just like any utility by owning a profitable asset.  Except other utilities would much rather own the transmission (and generation) asset themselves and collect a return.  It's sort of like the difference between paying rent and ownership, and ownership comes with a guaranteed return on your investment.  What's not to like for big utilities who want to purchase generators and transmission lines to serve their geographically distant customers?

This article explains how utilities are cutting out the middleman wind farm and transmission line owner in favor of scoring the biggest profit.

Yup, AEP has announced that it wants to buy the country's largest wind farm currently under construction and build a transmission line from the wind farm to its customers.  I'm guessing AEP doesn't want to buy transmission capacity from Clean Line and then hope generation springs up at its terminus.  The risks of that are that Clean Line will never actually be permitted and financed to build any transmission, or that the wind farms won't be built, or that prices will be much higher than expected if they actually do.  Utilities hate risk.

But AEP is no hero and its $4.5B plan has an uphill regulatory battle as it seeks to stick customers with the risks of its renewable energy plays.  AEP figures its plan will save customers in four states $7 billion, most through use of federal production tax credits for wind.  Ahhhh... AEP.... did you stop to apply any simple logic to that idea?  Where do you think federal production tax credits come from?  They come from taxpayers.  They're not cash that just falls out of the sky when a wind turbine spins.  So, those customers who receive $7B in savings are also paying into a tax system that creates the savings.  How much do customers actually save when the tax burden of creating the credits gets added into the equation?  How many other taxpayers around the country that don't receive any of AEP's $7B savings are going to be subsidizing this artificial savings house of cards?  And what happens to a wind farm with a 25-year lifespan when a 10-year tax subsidy expires?  What are the savings then?  This plan may never come to fruition.

But it stands a much better chance than Clean Line's plan.  It's interesting that AEP's ginormous wind farm is located in exactly the spot Clean Line claimed independently owned wind farms to support its Plains & Eastern Clean Line would spring up. 
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I'm thinking this announcement pretty much makes what Clean Line is peddling even less appealing.  Did AEP ask Clean Line to build a converter station near Tulsa to deliver power from a wind farm in the panhandle?  Of course not!  If AEP builds its own transmission line, it can earn anywhere between 9-12% annual return on its investment, plus have all its operating costs fully covered by ratepayers.

This is why you failed, Clean Line.  Why buy the milk when you can own the cow?
2 Comments

Clean Line Wants Taxpayer Bailout for its Transmission Projects

6/30/2017

14 Comments

 
Building five ginormous transmission projects totaling thousands of miles of new merchant lines was a pipe dream.  Utility experts said it couldn't be done.  They were right, it can't.

Teetering on the brink of failure after spending more than $200M of investor cash on his impossible dream, Clean Line Energy Partners CEO Michael Skelly now suggests that the federal government bail out his investors.
The Trump administration could help by pushing for an infrastructure package that would see the government “buying down a portion of the capacity” on big transmission projects so they can enter construction more quickly, or perhaps through an investment tax credit, Skelly suggests.

“All the ideas come down to a temporary underwriting of the project so you can get these things over the top, or some sort of tax mechanism.”
Skelly has finally given voice to his frustration in an interview with Recharge News.
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Skelly suggests that the federal government should buy capacity on his transmission project in order to get it over some imaginary hump that will allow him to start construction.  The federal government isn't in the business of buying unnecessary transmission capacity in order to prop up commercial projects that cannot stand on their own two feet.  While federal power marketers do occasionally purchase needed transmission capacity, they are not forced to do so merely to support the building of bridges to nowhere.  And if the federal government legislated the purchase of transmission capacity by its federal power marketers, it would be creating captive customers to shoulder the risk of this speculative transmission idea that cannot get off the ground on its own merits.  As a merchant transmission project, Clean Line has pledged to the Federal Energy Regulatory Commission that its investors will shoulder all the risk for its projects and that it does not have a captive ratepayer stream of funding.  Merchant projects succeed or fail based on their economics.  If a merchant project is useful, customers will voluntarily purchase its capacity, and the project will come to fruition.  If there are no customers, a merchant project cannot succeed.  Suggesting that the federal government pour taxpayer money into Skelly's projects would create an artificial "need" and economic basis for the project.  Participation by a government customer would not be voluntary.  That's not how merchant transmission works.
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Clean Line has no customers.  Despite Skelly's claim:
Plains & Eastern is “pretty much fully developed at this point”, Skelly says. “We’re now in the commercialisation phase, matching chippers – that is wind developers – with utilities in the southeast.”
He turns around in his next breath and suggests that the federal government be forced into being a customer through legislation or executive mandate.  Obviously, Skelly's efforts to match his chippers with customers isn't working.  It's been 18 months since the U.S. DOE got involved in his project in an attempt to usurp state authority and claim federal eminent domain authority to site the Plains & Eastern Clean Line, and Skelly still doesn't have a customer.  When the DOE agreed to participate in the project in March, 2016, Skelly claimed that he would have his customer agreements sewn up in a matter of weeks, but that has not panned out.

Skelly's other taxpayer bailout idea is federal investment tax credits.  This would give a direct tax credit to project investors, which they could use as cash to pay down their own corporate tax debt.  Let's see... ultra rich 1% Democrats who invested in a renewable energy scheme supported by a Democratic White House want the current Congress to bail them out with tax credits.
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A tax credit is taxpayer-funded cash for its owner.  By eliminating its own corporate tax debt, the investor would have more cash to invest in Clean Line Energy Partners.  Essentially, it's free government money for Clean Line that the investors wouldn't spend otherwise.  It's a way to prop up Clean Line's failing business model with taxpayer funds.  Clean Line's investors pay less taxes?  You pay more to make up the difference.

Where does the federal government get its money?   Out of your pocket.  Every.last.dollar.  There's no such thing as "free" government money.

So Clean Line has been posturing to the Trump Administration for months now, suggesting it is a prime candidate for the President's great, great Infrastructure Plan.  Trump has posited that private investors can belly up to the bar and fund billions in new infrastructure projects in exchange for ownership that creates a revenue stream, or tax credits that allow publicly-owned projects to be built.
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Except Clean Line isn't a publicly-owned project.  Clean Line's rich investors will own the project and the revenue stream, and charge the public a fee to use it.  There's no benefit for the public.  It's nothing short of taxpayer-financed private industry, and it cannot be included in an infrastructure package designed to get infrastructure like roads and public works projects built.  And furthermore, Skelly wants the federal government to be the "private sector investor" who gets his project over the finish line!  I'm pretty certain that's not what Trump had in mind.

Once certain that his transmission projects would be marketable under a Democratic administration, Skelly now fantasizes about a Republican-led taxpayer bailout to prop up his failing company.
“It’s still a bit early to tell exactly what the administration will do to stimulate more infrastructure investment,” Skelly says. “But in terms of the things they’re talking about, with private-sector-led projects, it forms a pretty nice Venn diagram with transmission.”
What kind of a guy uses the words "Venn diagram" to prop up his unsuccessful ideas in the media?
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Is Skelly's dream even logical, or is the stress getting to him?  Why would the federal government fund an infrastructure project that's supposed to be "led by private investors?"

The idea that our current Congress will pour buckets of taxpayer dollars into a wind energy transmission project that has no customers in order to bail it out of its current financial crisis is insane.
14 Comments

What has EEI Done for You Lately, Little Ratepayer?

6/26/2017

3 Comments

 
The Edison Electric Institute is a trade association for investor owned electric utilities.  It's mission and vision:
Our Mission

The Edison Electric Institute (EEI) is the association that represents all U.S. investor-owned electric companies. Our members provide electricity for 220 million Americans, and operate in all 50 states and the District of Columbia. As a whole, the electric power industry supports more than 7 million jobs in communities across the United States. In addition to our U.S. members, EEI has more than 60 international electric companies as International Members, and hundreds of industry suppliers and related organizations as Associate Members.
 
Organized in 1933, EEI provides public policy leadership, strategic business intelligence, and essential conferences and forums.

Our Vision
EEI will be the best trade association.

We will be the best because we are committed to knowing our members and their needs. We will provide leadership and deliver services that consistently meet or exceed their expectations.

We will be the best because we will attract and retain employees who have the ambition to serve and will empower them to work effectively as individuals and in teams.

Above all, we will be the best trade association because, in the tradition of Thomas Edison, we will make a significant and positive contribution to the long-term success of the electric power industry in its vital mission to provide electricity to foster economic progress and improve the quality of life.

That's just a whole lot of business-y sounding jargon for... we lobby, we propagandize, we stick our nose into regulatory proceedings we don't understand, and we do it all for the purpose of increasing investor owned utility profits!

Does any of that sound like something that benefits you, little ratepayer?  No?  Then why are you paying for it in your electric bill?

The Energy and Policy Institute has published a new report detailing how utilities' EEI "dues" end up in electric bills, although ratepayers don't benefit from EEI's activities.

Paying for Utility Politics
How utility ratepayers are forced to fund the Edison Electric Institute and other political organizations

tells the story of the millions of dollars funneled to this organization, and others, by investor owned utilities every year that are, in turn, added to the utility's "cost of service" rate.  A utility's "cost of service" is supposed to include all expenses of the utility necessary to provide your electricity.  The utility also earns a return on its investment for your benefit.  But the Edison Electric Institute doesn't provide any benefits for ratepayers, it only benefits investor owned utilities.  And because some regulators are lazy about examining utility rates, the utility is often successful in passing its expense to fund EEI and other political organizations into the rates you pay.

A utility's political and lobbying expenses aren't a ratepayer burden.  A utility spends its own profits on these things because it cannot be assumed that laws, regulations, and propaganda that benefits the utility also benefits the ratepayer.  Except that utilities have a nasty habit of having little "accidents" where expenses that are clearly political or lobbying find their way into rates.  Sometimes when caught with their hand in the cookie jar, the utility says "oops" and removes the expense from rates.  Other times, they stand there arrogantly stuffing cookies into their gaping maw as fast as they can while stamping their feet and crying that the political expenses really aren't political at all, or that they are entitled to recover them by twisting regulation to make them into something unpolitical.  Honestly, these schmucks are crooked dirty jockeys who drive a crooked horse.
When third-party organizations or public service commission staffs have attempted to protect ratepayers from funding political organizations in recent years, their attempts have met with fierce resistance from the utility companies.
The report's executive summary:
This report explores how regulated utility companies are including their Edison Electric Institute (EEI) annual payments, along with payments to other trade associations, in their operating expenses. The widespread practice forces ratepayers to pay for political and public relations activities with which they may not agree, and from which they do not benefit. It also has the effect of ratepayers subsidizing the political activities of EEI and other trade associations. Utility commissions have a responsibility to protect ratepayers from paying for industry groups and their political work along with public relations activities. But utilities have become adroit at using EEI, and other organizations, to effectively and quietly influence policy while sheltering their shareholders from the bulk of the associated costs. Almost no other political organizations have the luxury of subsidization enjoyed by EEI and other representatives of the regulated utility industry.
You've paid for:

The salary of EEI President Thomas Kuhn, who made $4.1 million in 2015.

EEI's time to make sure that the Federal Energy Regulatory Commission (FERC) “provides compensatory returns on equity that recognize the risks associated with transmission construction."

EEI's education of regulators and consumers advocates on key industry issues, including capital expenditures that highlight the record-high investments in the grid.

Utility dues for The American Gas Association, Nuclear Energy Institute, and the U.S. Chamber of Commerce.

Utility contributions to the Democratic Governors Association; and Republican Governors Association.

EEI's legislative advocacy; regulatory advocacy; advertising; marketing; public relations; legislative policy research; regulatory policy research.

EEI's "litigation efforts".

EEI-sponsored dialogues and forums that brought together FERC commissioners, state policymakers, consumers, Wall Street analysts, and industry leaders to discuss key issues facing the industry.

A "Defend My Dividend" campaign, that secured permanent parity between the tax rates for dividends and capital gains.

A "We Stand For Energy" campaign, to educate and unite more than 250,000 electricity consumers and stakeholders across the country and to advocate for smart energy solutions that ensure electricity remains safe, reliable, affordable, and increasingly clean.


Hunton & Williams LLP and Venable LLP. Hunton & Williams is the counsel for the Utility Air Regulatory Group (UARG), Utility Water Act Group (UWAG), and Waters Advocacy Coalition (WAC). Venable represents the Utilities Solid Waste and Activities Group (USWAG). Since 2008, Hunton & Williams has received $64.7 million from EEI and Venable has received $21.5 million.  These ad-hoc organizations lobby the EPA and other federal interests to roll back clean air and water regulations.

Americans for Prosperity


Congressional Black Caucus/Foundation

Thomas Alva Edison Foundation

American Legislative Exchange Council

EEI's “Lexicon Project,” an opportunity for utilities to assume an “offensive posture” on energy policy and to rebrand the electric utility industry and overcome the negative perceptions consumers have about the lack of progress utilities have made on renewable energy and environmental issues.

American Coalition for Clean Coal Electricity.

There's much, much more in the report, so read it for yourself.

The report recommends

The evidence in this report reveals that EEI is primarily and inherently a political organization, and that much of its work targets policymakers throughout all levels of government to build influence, specifically for their member companies but also for the industry at large. While many states have their established practices of how to code trade association dues, they should revisit outdated guidelines due to the nature of EEI’s modern activities to ensure that they are adequately protecting ratepayers. Throughout the past three decades, some regulators and consumer advocates have acted to protect ratepayers, but scrutiny has waned dramatically. Precedent exists for public officials to act in every state to investigate whether or not EEI’s inherently political work ought to be funded by ratepayers.
Your public utility commission and consumer advocate owe it to you to pick through rate filings and demand that the utility prove ratepayer benefit for the EEI dues it pays, along with other "dues" it pays to political organizations and other groups whose mission is to support investor owned utility profits, not consumer interests.

Thomas Edison would probably be ashamed of these crooks.
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Potomac Edison Receives Fine for Maryland Meter Reading Failure

6/23/2017

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The Maryland Public Service Commission finally got around to issuing an Order on the great Potomac Edison meter reading failure of 2011-2012, a full six years after the ratepayers it serves were harmed.  Six years!!

A press release from Doug Kaplan of The Sugarloaf Conservancy tells the story.
For years the citizens of Maryland have been waiting to find out whether the Public Service Commission really cares about justice and protecting the public. We have our answer. The answer is NO!

The Maryland Public Service Commission (PSC) in their recent Order has taken a position in support of Potomac Edison (PE) on the major issue, against ratepayers’ interests. The Commissioners’ decision is in conflict with both their own Judge’s determination and the West Virginia Public Service Commissioners on the same issue.

The most important decision on this matter was whether or not to require PE to read meters monthly. The PSC Commissioners, as usual, supported the utility company when they overturned the Order issued by the Judge who heard the case.

This should have been expected because in every meeting and mediation, PE’s attorney would declare that PE will not do monthly reads! Apparently lawyers and attorneys trump justice every time! We now know our PSC stands for money in politicians’ and big businesses’ pockets without concern for the problems and concerns of the people or justice at all.

As a brief history, in May 2012, as President of Sugarloaf Conservancy (Doug) filed a formal complaint with the PSC asking them to “establish a formal case to investigate this matter” in response to members’ complaints about PE meter reading practices.  These practices included the failure of the company to read meters bimonthly as required, using inaccurate estimations, which caused substantial over and under billings. Both situations have negative ramifications causing harm to those who can least afford to pay overcharges or large catch-up bills.

A case was finally opened in April 2013. After years of delay the Judge in May 2016 ruled against PE. In part of his Order he stated, “I find that PE's meter reading tariff must be modified to require an actual reading on a monthly schedule...” (as is the case with all other electric utilities in Maryland).  PE appealed the Judge’s Order. A year passed without any decision by the Commissioners. On May 16th, in a letter sent to the PSC, we insisted they fulfill their obligation. Finally on June 19th, the PSC issued an Order.

The Order upholds most of the findings of the Judge’s ruling, including that PE must submit a monthly report for 24 months; pay a minor penalty of $25,000; offer a payment plan to those customers who receive a substantially low estimate bill, followed by a substantial catch up bill the following month; modify their bill to clearly show when an estimate occurs and the reason for not reading the meter.  The reversal of the Judge’s Order to require PE to read meters monthly is in stark contrast to a similar case in West Virginia. West Virginia took less than a month to open a case after the issue was raised whereas the Maryland PSC waited a year after we asked for an investigation; Maryland dragged out the case for four years before the Commissioners issued a final Order; West Virginia issued a comprehensive ruling against PE including the requirement that they read meters on a monthly basis after only a year.  Maryland PSC Order required PE address only 4 areas of concern whereas in West Virginia their PSC hit PE on twelve major requirements.

There is great concern that this slap on the wrist will embolden PE to resume their past business practices, which have caused severe harm to so many.  Unfortunately the losers will be the senior citizens on a fixed income and the poor who can least afford to either pay for electricity they have not consumed or be hit with a sizable catch-up bill.  The Commissioners, through this Order, confirmed their past history of supporting utility companies at the expense of ratepayers in Maryland. This pattern should be disturbing to everyone and unfortunately will not likely change.
Two different states... two different results for the same problem.

FirstEnergy, Potomac Edison's parent company, screwed up.  In the wake of FirstEnergy's take over of the former Allegheny Energy, FirstEnergy decided to scrap Allegheny's bi-monthly meter reading procedures and replace them with FirstEnergy's meter reading practices.  Except FE's meter reading practices were designed for companies who read meters monthly.  When a reading is skipped at a monthly read company, the issue can resolve itself the very next month.  However, when this scheme is applied to a bi-monthly read company, the problem often cannot right itself for several months, because the read cycle is 60 days long, instead of 30.

Combine this with FE's changes to meter reading personnel, including crappy pay and requiring the use of a personal vehicle, and suddenly there weren't many meter readers available to catch up on missed reads.

Disaster!

It shouldn't take a rocket scientist to figure out where the mistakes were made.  FirstEnergy is just that stupid, folks.  Instead of fixing its problems, the company had to be dragged kicking and screaming into costly regulatory hearings because it refused to admit that it had done anything wrong.

Now the citizens of West Virginia pay double the cost for monthly meter reading, and Maryland holds its breath hoping that the stupidity doesn't once again rule supreme on a bi-monthly read schedule.

This whole debacle was caused by a clumsily managed merger that both PSCs approved with nary a care.  The only consequences were to the hundreds of electric customers who paid the ultimate price of inaccurate bills, electric shut offs, and endless payment plans.

Oh, and a $25K fine.  Which ought to come out of some fat ass executive's pay for performance bonus (he'll hardly notice it), but sadly will probably find its way back into the electric rates you pay.  And pay.  And pay.  And pay.
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Why Electric Transmission Projects Don't Belong in Trump's Infrastructure Plan

5/15/2017

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Whether you believe in the idea that building infrastructure will "make America great again" or not, one thing is clear:  electric transmission projects don't belong on a federal infrastructure project list.

But electric transmission appeared on lists released earlier this year under the guise that the Trump administration created the lists.  However, men touting themselves as infrastructure "experts" created those lists, so you'd think maybe they actually had some knowledge about different kinds of infrastructure, and the specific projects they added to their independently-created lists.  Apparently the only criteria needed for inclusion on these lists was a desire to be on a list.

Turns out not only do those infrastructure "experts" not really know much at all about the projects they're pimping, but they fundamentally misunderstand the way electric transmission is permitted and paid for.  A recent article in Marketplace tosses a bucket of cold water on the transmission infrastructure woody the "experts" have been sporting.

More than 500 infrastructure projects are pitched to Trump, who will favor private money and speed says that not only do the infrastructure "experts" not know anything about the projects on their lists, but they also don't understand the difference between funding and financing infrastructure.

The Marketplace article highlights a dispute between two states over a flood diversion project in the Fargo, N.D., area.  The project is touted as "shovel-ready" on the "expert's" list, but just a little digging for information by the reporter revealed that the project is embroiled in a gigantic controversy between states, and a federal lawsuit.  Not "shovel-ready" by any stretch of the imagination.  But it appears that what got that project on the list was someone lobbying for it... someone who wanted to pretend it was "shovel-ready" in order to get it on one of the "expert" lists, as if that would magically make the huge controversy disappear.  It doesn't.  It can't.  And the "expert" showed his decided lack of expertise by failing to even take an independent look at the project with a quick google search.  These projects got on lists at the request of their owners, and nobody cared to look past the information provided by the owner. 

The "expert" also knows nothing about the Plains & Eastern Clean Line electric transmission project that appears on his list.
Slane acknowledged, though, he didn’t know about the legal dispute between Minnesota and North Dakota.

Other high-profile projects listed from around the country are entangled in legal and political problems, too.

A proposed high-power transmission line that would deliver wind energy from Oklahoma to several southeastern states is under fire. The federal government approved the line in 2016 despite objections from landowners and the Arkansas Congressional delegation.

Since then, several landowners have sued to stop the line and several members of Congress introduced legislation that would require projects to receive state approval. Officials representing the company believe the line will be approved.
That hardly makes this project "shovel-ready," either.  Officials believe it will be approved?  I thought Clean Line already thought the federal government "approved" their project?  I thought Clean Line said their project didn't need state approval?  But it looks like now Clean Line believes it can get state approval.  Is that what Clean Line is saying?  Or is that what the infrastructure "expert" is saying on Clean Line's behalf?  Because that just doesn't make sense. 

And you know what else?  The Plains & Eastern Clean Line has no customers.  It has no revenue.  There's no need to build something that nobody is going to use.  In fact, it's just not possible to do that, no matter how many lists this project gets put on.

Electric transmission is not like a highway, or an airport.  Electric transmission is always paid for by its user.  It's not a "free" highway that the public can use on a whim.  Electric transmission is always built with private investor cash, in exchange for a return on equity.  There are two distinctly different kinds of transmission projects. 

The first kind is ordered by a regional transmission planner and cost allocated to a select group of electric ratepayers who will pay to use it.  The ratepayers are forced to create the future regulated revenue stream.  This kind of project's return on equity is set by regulators, who must approve the rates it charges in exchange for creating a captive ratepayer revenue stream.  Investors receive a regulated rate of return paid by customers.

The second kind of transmission project is the kind these "experts" have included on their many lists.  It's a merchant transmission project that has not been examined or ordered by a regional transmission planner.  It has no captive ratepayers to create a future revenue stream.  Instead, merchant transmission projects are the financial responsibility of their owners, who must create a future revenue stream from signed contracts with voluntary customers.  This project's return on equity is created by the market.  If there's a need for it, voluntary customers will set market price for its use, and the return for investors comes out of any profits it can earn through rates.  A merchant project must have confirmed customers that create a revenue stream before it can be financed and built.

A transmission project, no matter which kind, must have a confirmed future revenue stream before investors will plunk their money down.  Who invests without knowing how, if, or how much, return they will receive on their investment?  Nobody, that's who.  And that's another thing seriously wrong with the "expert" infrastructure list.
And private investors are not going to build the projects without a return on investment, which might come from tolls for a new road or higher utility rates for an energy project, for example.

Greg DiLoreto with the American Society of Civil Engineers says that difference is important.

“Financing infrastructure is not the funding of infrastructure,” he said. “Financing is access to capital to do that funding, but at the end of the day you have to have cold, hard cash to build these projects that need building…”
Because the infrastructure "experts" don't have a clue how electric transmission is built and paid for, they seem to think transmission is a good fit for their "shovel-ready" list.  Only a transmission project with a guaranteed revenue stream is anywhere near "shovel-ready."

Clean Line has no customers for its projects.  It has no revenue stream.  Being on an infrastructure list does not create one.  Being on an infrastructure list does not create captive customers. 

These infrastructure "experts" are nothing more than uninformed clowns, but the real Bozos are the merchant transmission companies schmoozing and lobbying and wasting their money to get their loser projects on some list.  List or no list, the Clean Line projects just aren't happening.
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U.S. Offshore Wind One Step Closer to Reality

5/15/2017

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Big news last week when the Maryland Public Service Commission gave the nod to two wind projects to be built 12-21 miles offshore along the Maryland coast.

Cost impact is expected to be less than $1.40 a month for the average residential customer

Well, now how about that?  "States farther east" building their own renewable generation, in their own backyard, and paying for it themselves.  Bravo!

Sure looks cheaper than spending $10B on honkin' big new transmission lines to import "wind" from the Midwest.

And guess what?
The PSC said the two projects are expected to yield more than $1.8 billion of in-state spending. The agency says the projects are estimated to create nearly 9,700 new direct and indirect jobs and contribute $74 million in state tax revenues over 20 years.

The PSC's decision is contingent on approval by the federal government of the developers' site assessment plans, as well as construction and operations plans.

The plan includes a focus on developing port facilities in the Baltimore area and Ocean City. It calls for developers to invest at least $76 million in a steel fabrication plant in Maryland and at least $39.6 million for upgrades at Baltimore County's Tradepoint Atlantic shipyard, formerly Sparrows Point.

Commissioner Michael Richard said the wind farms will "enables us to meet our clean, renewable energy goals using energy generated within the state while conditioning our approval on holding project developers to their promises of creating jobs and spurring economic growth."
Economic development in Maryland, where the energy will be generated and consumed!

Sure beats the hell out of Clean Line Energy's plan to create economic development in Iowa and Kansas by building new terrestrial wind farms and ginormous electric transmission lines for thousands of miles that they expect Marylanders to use and pay for.  Why would Maryland want to ship all its energy dollars to other states to create economic development somewhere else?  Does that make sense, when local keeps it all in-state?

Win, win, win, Maryland!
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Bending Physics to Make Money

5/14/2017

1 Comment

 
Is there no limit to the propaganda businessmen will spew in order to profit?

Now we've got Anbaric's Ed Krapels bending physics in order to pimp merchant transmission to... who exactly?  Who is supposed to read this krap and give Ed a bunch of money?

I recently stumbled across this:

Make America (Electrically) Great Again: An Electric Infrastructure Plan For The Trump Team

Because Trump is so inclined to take his "plans" from The Huffington Post.  Right.

This krappy opinion piece is so full of rhetorical buzzwords that a friend suggested we make a drinking game out of it, and other media in the same vein.  Balkanized?  Take a shot!  Green?  Take a shot!  Resilient?  Take a shot!  Modernize?  Take a shot!  Infrastructure?  Take a shot!

Drunk on the floor.  All.The.Time.

As if glittering generalities are the basis for planning and building the greatest machine of modern times -- the electric transmission grid. 

First of all, we need to recognize where krap like this comes from... it comes from the corporations and people who stand to make a profit from grid construction.  It comes from environmental group lawyers who have no electrical engineering experience.  And the worst part?  These people know better!  They know that the grid is planned and operated by federally monitored regional transmission and reliability organizations.  Our grid is constantly expanded and modernized by experienced engineers with an eye toward reliability and price.  It's not about favoring one resource over the other, or putting money in investor pockets.  So when you read krappy articles claiming our grid is costly, rickety, and unreliable, they're just not true.  We don't look to profit-seeking, or politically-motivated entities to plan a grid that puts the most money in someone's pockets, and we shouldn't start now.  Creating a grid based on the need to meet political goals, or put money in corporate pockets, is creating a grid that's not efficient, affordable, or reliable.

Another krappy opinion piece claims that big companies are simply greenwashing when they purchase renewable energy credits and then claim to be environmentally responsible.  I agree.  But I do not agree with the suggested krappy solution of building new transmission lines so that the company can actually use the electricity associated with the RECs it purchases, as if electricity is nothing more than water in a pipe that can be directed to flow to a certain customer.  The problem is the idea of RECs in the first place, not a lack of transmission.  A REC represents the social and environmental attributes of electricity generated.  A company can buy a REC, but that REC can be physically separated from the actual electricity produced.  A generator may sell the actual electricity to another user, and then market the REC to someone else.  That creates two revenue streams for the same electron.   Essentially, it is selling something twice to two different buyers.  It's a swindle of the highest order.

Options to solve that?
1.  Stop unbundling RECs from energy.
2.  Require companies to purchase transmission on the existing system to use the actual energy they purchase.  There ain't no such thing as "cheap" environmental footprint, unless the public believes the greenwashing.

And then there's the unnecessary -- building new private transmission lines just for companies who want to purchase unbundled RECs from far away places.  If we start down that path, with each company supporting its own private transmission line, we're soon going to find wires everywhere.  The more wires and connections added, the more complicated and unreliable the grid becomes.  There's also the problem of clearing a path for private transmission lines on private property owned by others.  That's not a public use.  That's not a public utility.  Eminent domain cannot be used for such an endeavor.

No matter how many buzzwords these grid profiteers use, their ultimate goal is clear:  to enable private companies to take from the public in order to increase their profits.
Congress should create legislative authority for siting major electricity transmission lines that follows the authority it has already granted to siting major gas lines.
In other words, let's let the federal government site and permit electric transmission to create a politically favored electric grid that everyone pays for.  Fly over states and politically disconnected areas will be forced to sacrifice for the needs of the economically advantaged and politically connected.  It's just not true that everyone benefits from every transmission line dreamed up to line corporate profits.  New transmission levelizes prices between generation regions and consumption regions.  While it may lower prices in consumption regions, it raises prices in formerly constrained generation regions, and the folks in the middle get nothing.  Zilch.  Zero.  That problem cannot be solved by federal authority, the only thing federal authority may do is exacerbate it.  Our current system that leaves siting and permitting authority to states is not broken. States do a much better job recognizing local priorities and concerns, and determining benefit to the state.  Any delays come from badly conceived transmission ideas that do not provide benefits to localities, or seek to use the eminent domain power of the state for private transmission projects that do not provide public benefit. 

Here's how to fix a long state permitting process:  Stop trying to use eminent domain to force private infrastructure!  I'm pretty sure Mr. Krapels is well aware that transmission that's sited underwater and underground on land of willing hosts can sail through the transmission permitting process in record time.  Mr. Krapels also probably has customers lined up for the projects he undertakes, and doesn't rely on "build it and they will come" as a business plan.

Stop trying to "fix" what's not broken just to make private utility projects cheaper or faster.  Instead, design better transmission projects with an eye toward making them acceptable to the communities they propose to impact.  The grid operators and regulators we already have do a fine job of vetting transmission proposals and only ordering the building of what's actually needed.  We don't need a bunch of profiteers creating their own private grid through our backyards.

The problem isn't us, it's you.  All the glittering generalities in the world just can't fix that.
1 Comment

Finally, Someone Issues a Report Card to The American Society of Civil Engineers

4/19/2017

0 Comments

 
New from the guy who brought us "The Rise and Fall of Big Transmission" (see also R.I.P Big Transmission here), is an opinion on the annual "Chicken Little" report on infrastructure from the American Society of Civil Engineers -- Electric Infrastructure: Sky Keeps not Falling.

The ASCE report has been pure crap every single year, and I'm not sure why anyone even pays attention to it anymore.  It is concocted by a trade group of engineers whose paychecks depend on the need to build more infrastructure every year.  If anyone got an "A," there would be a lot of engineers in the unemployment line because there would be little need to build more infrastructure.  This report is sort of like if Hershey's issued an annual report on the need for chocolate, and the report was authored by women.  We know that a day without chocolate is like a day without hope, so therefore we need chocolate every.single.day.  And talk about your coincidences, Hershey's sells chocolate (not the best chocolate, but when a chocolate emergency strikes, it's better than a bag of Skittles).  The ASCE report is self-serving dreck designed for doomsayers and vapid public officials without an expert staff to tell them the truth about infrastructure.

Speaking of telling the truth, it probably isn't real good for business if an energy lawyer actually tells the truth.  But yet, Huntoon persists.  His clients must be brave souls.  Gotta admire that!

Huntoon says everything in the ASCE report is wrong.  That's a pretty wide characterization, but sadly it's true.  It starts with this:
For starters, there is this claim: “With more than 640,000 miles of high-voltage transmission lines across the three interconnected electric transmission grids … the lower 48 states’ power grid is at full capacity, with many lines operating well beyond their design.”

The fact is that 0 (zero) transmission lines are being operated beyond their design capacity. The grid has been and continues to be designed and constructed to cover projected peak demand years in advance. And every line is operated within its design limits. The ASCE claim is alarmist and wrong.
(And so is Clean Line's claim that our grid is so congested that no new renewable energy generation can be built without it's "clean" lines -- and for the same reason!)  And don't miss ASCE's claim that we "need" new processes to get "needed" transmission  lines built for renewable energy.

And then Huntoon tears up the ASCE claim that lack of new infrastructure causes blackouts.

The ASCE habitually conflates the transmission system with the distribution system.  Most outages are due to faults on the distribution system, not the transmission system.  When the rare transmission failure happens, though, more customers may be affected.  But transmission is designed to provide contingencies in the event of transmission failure -- loads are switched to other transmission lines and we don't even notice a problem has occurred.  The distribution system lacks this kind of contingency, so if a tree falls on the line serving your neighborhood, you're in the dark.

What we may need to do is make upgrades to the distribution system, which is sorely neglected by investor-owned utilities who would rather put their cash in the transmission system because it pays higher returns on invested capital.  So we've got utilities pursuing expensive transmission lines to nowhere, while distribution lines are rotting on the pole.

The ASCE report card is an industry-influenced, uninformative, biased joke.  Huntoon suggests that we give the ASCE report a D+.  I think that's much too generous.  I give them a U for useless.
0 Comments

Smells Like Broken Dreams and Bitter Lobbyist Tears

3/30/2017

6 Comments

 
I'm sure you know one... a member of the "Good Old Boys' Club."  I'm talking about a well-fed, middle-aged white guy who may actually use the phrase, "Do you know who I am?" on a regular basis.  He doesn't appear to be particularly bright or industrious, and has absolutely no self-awareness or empathy, but he's managed to claw his way into a position where he makes his living by being connected to other old white men and selling his influence to outsiders who want to make a buck.  What happens when that special, privileged world spits out its own?  Who doesn't love a little schadenfreude?

Remember the "Infrastructure List" that has been gushed over by members of the Good Old Boys' Club and their media lackeys for the past three months?  Turns out it's been kicked to the curb, along with the guys who prepared it, and a new crew of infrastructure critters has been let loose in the Washington Swamp.

No wonder Norman Anderson was having a public meltdown last month.  I think maybe he didn't appreciate being ignored by an administration he thought he had eating out of his hand.  Awww... life isn't fair, is it, Norman?  Let's sing together...
*sniff, sniff*  Could someone hand me a tissue?

The Charlotte Observer published an in-depth report covering the "Infrastructure List" and the shady way it was compiled and pushed by a group of guys who are now out of favor with the Trump administration.
When Donald Trump and Mike Pence met this month to discuss a promised $1 trillion infrastructure plan, the Cabinet Room was filled with half a dozen billionaire executives, from Tesla’s Elon Musk to Steve Roth, a New York developer and longtime friend to the president.

One person who wasn’t there? The man who worked for months to line up priority infrastructure projects for the Trump transition team.

Just a few weeks earlier, Dan Slane had been jetting around the country — on his own dime — to meet with governors, contractors, investors, labor union officials and others eager to influence Trump’s infrastructure plan. He developed a 50-project proposal filled with exactly the kind of “shovel-ready” investments the White House wanted – the kind that needed regulatory relief, not federal dollars.

But as Trump’s attention turns to infrastructure after suffering defeat on his first policy priority, the White House will not even acknowledge Slane, except to say he has “no official or unofficial role” in the administration. He says his infrastructure plan, and indeed his very connection to the president, has become the victim of a power struggle for control of this big-ticket infrastructure agenda between Peter Navarro, a Trump loyalist and economic populist who advised his campaign, and Gary Cohn, a former Goldman Sachs president who now runs the National Economic Council.
Who is Dan Slane?  A quick google search shows he's been working with Peter Navarro on a film called "Death by China."  Apparently these guys believe that trade with China is killing our economy.  Slane ought to know... apparently he moved his wood business to China to collect a 17% profit.  I guess that must have scarred his psyche (while fattening his bank account) so now Slane is anti-China.  Apparently the whole infrastructure thing stems from the fact that China has been investing in its infrastructure lately, and we gotta, you know, keep up with China.  But how does Dan Slane connect with Norman Anderson?  The Charlotte Observer reveals:
Anderson’s company had compiled a list of 100 top infrastructure projects with input from senior-level investors, engineers and developers. The list would have been offered to whichever presidential candidate had won in November, Anderson said.

A week after Trump’s unexpected win, Anderson found a white paper online that Navarro and now-Commerce Secretary Wilbur Ross had written for the Trump campaign. It proposed tax credits to fund infrastructure. He emailed Navarro, and offered some suggestions.

“Navarro asked Dan to talk to me the next day,” Anderson said.

Slane, who was working without a staff, asked Anderson to help him screen a list of projects Navarro wanted for the administration. Anderson in turn hired Boston Consulting Group to analyze how many direct and indirect jobs each project would create.
So, how did this list get presented to the media as a Trump administration list, and how did a project get on Slane/Anderson's list in the first place?  The Charlotte Observer explains how the Good Old Boys' Club gladhanding worked...
Playing the liaison

Leaders at the state and local level, and executives at the National Governors Association, thought they had been working with the White House, through Slane.

Paul Aucoin, executive director of the Southern Louisiana Port, said he assumed Slane was a shoo-in for a White House infrastructure job when he met him at Anderson’s offices in Washington in December.

Aucoin made the trip to DC to promote his port and try to secure federal assistance to dredge the mouth of the Mississippi River.

The meeting with Slane had been arranged for Aucoin by the public relations firm of Gary Meltz, a former aide to Democratic Rep. Eliot L. Engel of New York.

Slane introduced himself as a member of the Trump transition, and Aucoin made his pitch.

Slane promised to get the dredging project on the list he and Anderson were compiling for the transition.

“They were very receptive, they got it, they understood what I was saying, they asked all the right questions,” Aucoin said. “It wasn’t like I was talking to a wall. I was finally talking to some one who understood what I was trying to say.”

Later Slane would visit the port and meet with Louisiana Gov. John Bel Edwards. He reassured Edwards and Aucoin that congressional Republicans would pledge money to the project from the Harbor Maintenance Trust Fund. That promise that has yet to be fulfilled.

Aucoin said he’s since hired a lobbying firm in Washington that was working on getting him a meeting with Gribbin.

“It was a blow for us to lose Dan,” Aucoin said.
Let me get this straight... a PR firm with connections made introductions between an entity with a need for a project and some guys who presented themselves as part of Trump's team?

So when Clean Line's Mario Hurtado said:
"When the Trump campaign was looking at infrastructure, we thought it was a good thing to mention. We're just happy to be part of the conversation."
What he really meant was that Clean Line paid a PR firm to make the introductions between Clean Line, Slane, and Anderson, in order to "mention" putting the company's Plains & Eastern Clean Line project on the infrastructure list?  Mario actually did not bump into these guys in the grocery store.  :-(  It actually cost Clean Line money to buy their way onto the Slane/Anderson list.  Guess what, Clean Line?  Looks like you've maybe been taken, and you're really not on Trump's favored list after all.  Even the union's infrastructure wish list (where all three of CLEP's eastward bound projects showed up) was a Slane/Anderson product that Trump now seemingly wants nothing to do with.
Sean McGarvey, president of North America’s Building Trades Unions, said his organization consulted with Slane on his plan. His union delivered to the White House its own list of priority infrastructure projects in February, after meeting with Trump.

“The way Dan framed it was really good because Dan took projects that had all funding but lacked permitting or some who had permitting,” McGarvey said.

“He did a lot of thoughtful work on the initial ready-to-go, out-of-the gate stuff,” he said. “The projects that Dan was talking about really don’t require a new infrastructure bill. Those are ones that exist, that are both private and public, and have the three elements you need: the financing, the engineering, and permitting. And some of them will happen this year.”
Hey, Good Old Boys' Club, are you paying attention?  Pull up a desk and put on your listening ears.  You could learn something...

Clean Line projects don't have financing!
What they have is a plan to raise financing.  Clean Line's plan requires them to contract with future customers to create a revenue stream that Clean Line can use as evidence to secure financing.  Clean Line doesn't have customers.  Clean Line doesn't have a revenue stream that can support financing.  There is nothing a Trump administration (or the Good Old Boys' Club) can do to create captive customers for Clean Line's projects.

Clean Line doesn't have complete engineering!  What they have is a plan to complete engineering once permitting is complete.  Clean Line has no revenue.  None.  It's living high on investor development cash right now.  Engineering is a construction cost that happens after a project is fully permitted and financed.  There is nothing a Trump administration (or the Good Old Boys' Club) can do to finance final engineering for the Clean Line projects.  Federal money would invalidate the project's merchant transmission status with the Federal Energy Regulatory Commission that allows them to negotiate rates with willing customers (see financing, above).

Clean Line doesn't have permitting completed for any of its projects!  The Plains & Eastern project is the subject of a lawsuit in federal court where the U.S. DOE's preemption of state siting authority in Arkansas has been questioned.  The statute DOE used to run over Arkansas  plainly says it does not affect any requirement of state siting laws.  Although this case has yet to be decided by the court, it's not looking good for Clean Line.  Expect that Clean Line shall have to comply with Arkansas state siting laws for its project.  The Rock Island Clean Line project application for a permit has been withdrawn in Iowa.  Its permit in Illinois has been vacated by the Appellate Court.  It has no permits whatsoever right now.  The Grain Belt Express project's permit in Illinois is on appeal, and the project still needs a permit from the Missouri Public Service Commission.  A recent Missouri Court of Appeals decision prohibits the MO PSC from issuing a permit until Clean Line has the assent of each Missouri county it traverses.  GBE does not have all the county assents it needs and is unlikely to obtain them.  All of these permitting issues are STATE permitting issues.  There is nothing a Trump administration (or the Good Old Boys' Club) can do about state laws which govern state permitting, and if the administration tries to preempt state authority to site and permit electric transmission, it's going to have a hell of a fight on its hands, from the states and from the people.

None of the Clean Line projects are getting done this year.  They're not getting done.  Not now, not ever.  Take them off your list, assuming your list is supposed to be a real list, and not just some "pay to play" Good Old Boys' Club list of bridges to nowhere.

Cry me a river of bitter tears, fellas.  Karma's a real bitch.
6 Comments

PJM Doles Out the Punishment

3/17/2017

2 Comments

 
Well, isn't that fun?  PJM is punishing everyone because it's not getting its way.  Well, really Dominion's way, but PJM and its utility members are just different parts of the same animal.

Dominion finds itself mired in controversy over its Surry-Skiffes Creek 500kV transmission project in Virginia's tidewater region.  The project as proposed would make an aerial crossing of the James River quite near the historic Jamestown settlement.  The people say no.  The National Parks Conservation Association says no.  The National Trust for Historic Preservation says no.  The Army Corps of Engineers, who has to approve the project, isn't saying anything at all.  And we have stasis.

So, Dominion called in its trained gorilla, PJM, to terrorize the townsfolk and make them drop their opposition.  As if that kind of behavior ever works in a situation like this.  The people simply said "meh" to PJM's threats of rolling blackouts.

Now PJM has devised a way to punish them with higher electric rates.  And it has upped the ante by punishing everyone else in the PJM region with higher rates as well.  PJM has assigned cost responsibility for keeping generation units on the Virginia Peninsula running after they would have shut down not only to the folks on the Peninsula, but to every other zone in the PJM region.  That's right, electric customers in Illinois, New Jersey, Pennsylvania, Ohio, Kentucky and other PJM states will pay a percentage of the cost of running the units that wanted to retire.  PJM says:
Based on PJM’s assessment of the contribution to the need for, and benefits expected to be derived from, the facilities, the zonal percentage cost allocation for 2017 (January 1, 2017 through April 15, 2017) is...
...followed by a table of allocation percentages.  I'm going to be paying 3.5%.   Meh.

Trade press RTO Insider says
Opposition to Va. Tx Line May Trigger Unintended Consequences

Sometimes the juice isn’t worth the squeeze.

Protesters of a 500-kV transmission line across the James River might soon learn that the hard way. PJM is responding to the delay in the project’s approval by instituting a multilayered strategy likely to hurt ratepayers in Virginia’s middle peninsula disproportionate to any perceived benefits that could come from blocking construction of the line.

At a series of committee meetings last week, PJM staff detailed several other changes for the area that will have consequences protesters likely haven’t imagined.
Like outrageous electric price spikes.
Really, PJM?  Whose interests do you serve again?  You think hitting senior citizens, and other folks who may just barely be scraping by, with surprise outrageous electric bills, and then blaming the opponents of a transmission line, is really going to work for you?

I thought PJM's purpose was:
Acting as a neutral, independent party, PJM operates a competitive wholesale electricity market and manages the high-voltage electricity grid to ensure reliability for more than 65 million people.
But it sure seems like PJM's purpose lately is to ram through the projects cooked up by its members without any room for compromise with the people who have to live with them.

Who would be hurt by a change to an underground/underwater project?  Oh, too expensive for the ratepayers, you say?  Well, what about your scheme to gouge ratepayers as punishment for opposing the project?  Won't that be too expensive?  Seems like the ratepayers are going to pay more either way, so why don't you just fall on your sword and cap the damages with a buried option?  At least that would come with a finite number, over the life of the project, instead of giving Grandma a nasty surprise she can't pay for.

And speaking of outrageous costs, PJM, who did you fool with your recent re-start of your Artificial Island project, after removing certain components to lower the overall cost?  I don't think it was ever about the amount... but the fact that the cost was allocated to people who would not benefit.  That hasn't changed.  Good luck with that!

Stop being stubborn, PJM.  You exist to serve the people, not the energy corporations.  It's getting harder and harder to build transmission, and do you know why?  Because the people aren't as easily fooled in this day and age of readily available, unfiltered information.  Badly conceived projects will no longer be tolerated.  So, get with the times, PJM, and recognize that compromise gets the job done.  Quicker.  Faster.  Cheaper.  Easier.  Now is not the time to act like a stubborn mule.

You know, this statement is completely ludicrous.
PJM works closely with stakeholders throughout the development of the RTEP. Stakeholder input is a key part of the PJM planning process. The Skiffes Creek project was reviewed in numerous open meetings of the PJM Transmission Expansion Advisory Committee where public comment was sought prior to approval of the project by the PJM Board. As part of that process, Dominion transmission staff provided PJM its own thorough and comprehensive analysis of system needs as well as potential solutions for PJM consideration. Most importantly however, the Dominion analysis, which itself was based on PJM’s initial determination of reliability criteria violations that needed to be addressed, was then independently validated by PJM and publicly vetted through the PJM stakeholder process prior to PJM recommending Board approval of the Skiffes Creek project.
Public comment was sought?  How did that happen, PJM?  Did you contact community leaders and ask for their comment?  Did you perhaps take out an ad in the local paper soliciting public comment about the project?  Did you go door-to-door and take a public poll?  Of course you didn't.  PJM doesn't interact with the public in any way while considering a transmission project.  It doesn't seek public comments... it simply accepts (and ignores) the comments of any "public" that may somehow happen to accidentally find their way into a PJM TEAC meeting.  The idea that PJM is a publicly accessible stakeholder-driven process is as bogus as it's ever been.  It's time to come out of the shadows, PJM, and interact with the scary public, instead of simply devising ways to punish them for defying you. 
2 Comments
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    About the Author

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

    About
    StopPATH Blog

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

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


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