“The fact is that going underground, you don’t have wires rubbing up against trees. You are not going to have tornado impacts. It is safer and more resilient,” said Joe DeVito, president of Direct Current Development Co., which has developed the project.

“The successful deployment of this HVDC technology along railroads will create a market segment that doesn’t exist today, and DC DevCo believes that the SOO Green project will set the standard regarding how transmission lines are developed and constructed in the U.S.,” states Trey Ward, DC DevCo’s CEO.

So how can PJM propose a project that doesn’t really save any money, hurts Pennsylvania ratepayers so badly, and costs nearly $500 million to build? 
 
The answer can be found at the Federal Energy Regulatory Commission (“FERC”), the entity charged with regulating PJM.  FERC allowed PJM to implement a tiered system, with one set of rules for smaller projects, and one for larger projects.  Delineated by voltage, the lower tier rules allow PJM to completely ignore all zones that see increases, while the higher tier rules consider the net change to system production cost.  Transource realized that this created a loophole.  They designed the IEC to run at the highest voltage possible in the lower tier, but carry an astonishing 24 conductors.  Though run at only 230kv, the IEC has so many conductors it would have more power capacity than most 500kv lines that form the backbone of the grid.  One expert witness said it carried more power than any 230kV line he had ever seen.  Testimony showed that if the line were evaluated as a higher tier project, it probably would never have been proposed.

And if that isn’t gaming the system, then consider this: when PJM asked FERC to make the changes in the assumptions for future planned generation – the changes that affected the benefits last week – they didn’t provide much analysis.  In fact, they only gave FERC one table of examples.  Those examples showed what would happen to eight small projects with and without the proposed changes.  In all eight examples, the new rules reduced and usually eliminated the need for those projects by showing the projects no benefit.  PJM clearly was trying to tell FERC that they had historically been over-estimating the benefits of projects, and that the proposed rules would more accurately reflect lower benefits and result in fewer unnecessary projects.  But just days after the rules were changed, the IEC showed a $250M swing the other direction.  Bait and switch anyone?  You can almost hear the laughter in the PJM hallways.

PJM is a cabal of utilities interested in one objective: making money.  They have manipulated the rules to allow the proposal of a project that will lose hundreds of millions of dollars, destroy preserved farmland, and raise rates for Pennsylvania residents, all while ignoring existing alternatives.  If nothing else, this process has convinced any objective onlooker that PJM needs tighter regulation.  FERC has been too trusting, and the effects are clear.

Invenergy has told the Missouri PSC that it plans to begin construction in 2020 and complete the project in four years.

A company spokeswoman didn’t respond to an email seeking comment.

In the meantime, a landowner group says it’s not giving up its fight to block the transmission line.

“We remain committed to defending property rights,” said Jennifer Gatrel, a spokeswoman for Block Grain Belt Express.

Gatrel said there’s strong local government opposition to the project along the planned route and she believes many of the eight county commissions will refuse to sign off on needed assents allowing construction.

CMP has drawn attention to the ad this week, calling it part of a well-funded, dark-money campaign against the project.

Since that article, Clean Line Energy (remember them?) has sold off a couple pieces and seems to be otherwise winding down. Hopefully someone will write that history.

The new figures raise the projected electrical rate increase in Pennsylvania rates from $350M to over $500M (NPV over 15 years).

The new simulation projects $982M in electrical cost reductions for the DC market, but $969M in increases elsewhere, including over $514M in electric rate cost increases in Pennsylvania alone.

If all benefits and costs were to be included, the total benefit of the project would be negative $439M NPV over the next 15 years. 

Citizens to Stop Transource VP Barron Shaw stated: “Transource doubled-down on their bet that Pennsylvania would approve a project that effectively drains low-priced electricity from Pennsylvania in order to subsidize the wealthiest counties in the nation.  This project was bad before, and it is even worse now.  The PUC would be nuts to approve this project.”

The proposed multistate transmission line, Grain Belt Express, has languished before Missouri regulators for years — with their at times controversial rejections representing the last major obstacle to sending Kansas wind energy east along an intended 780-mile path.

While the overall decision on the project’s approval remains the bigger matter before the PSC, the regulatory body announced this month that it was also warming up to begin the separate process of approving its sale.

Some outside experts in Missouri speculate that Invenergy’s bid to take over the project can only help its odds of getting across the finish line.

She declined, however, to give updates or estimates about Invenergy’s anticipated, or hopeful, timeline for the project.
“I think it’s premature for us to be talking about timelines right now,” said Conley. “When we have a decision in that case (from the PSC), then we can really consider timelines and development and what the next steps for the project are.”

The project would be accompanied by the large-scale construction of new wind energy generation in western Kansas. Although about 85 percent of electricity distributed by the project would be destined for other states, it would power approximately 200,000 Missouri households. The PSC, even in denying the project through certain legal interpretations, has agreed that it is in the public interest, and would save Missouri customers millions of dollars by promoting access to cheap wind energy.

The transmission project would be the biggest, by far, that the Chicago-based company has ever undertaken. The company has developed more than 400 miles of combined transmission lines in its history, Conley said — just over half of the distance that Grain Belt would cover.

But for any prospective wind energy developer, the end of 2020 has long been a key point on the calendar.
After that point, production tax credits for completed wind projects begin to phase out. Even without receiving the full tax in their entirety, Clean Line officials previously said they felt the project would be cost-effective, thanks to technology and declining costs. Invenergy shares that belief, Conley said — full tax credits or not.

I agree with Mr. Herling that if a project can be devised to cost-effectively eliminate the transmission constraint, the entire cost of that project should be borne by customers in Town B. As a matter of cost allocation, that is the fairest way to allocate the cost.

Where PJM and Transource are incorrect, however, is in ignoring the increase in costs in unconstrained areas when determining the benefits of a project. By using only the decrease in costs on the constrained side of the congestion point to determine the benefits of a project, PJM and Transource greatly inflate the benefits of the project, making an uneconomical project look economical.

The most recent information provided by Transource shows that using PJM’s incorrect assessment of benefits (that is, looking solely at zones that would have reduced power costs) results in reduced congestion costs with a net present value of $707.29 million over 15 years. Moreover, as I explained in my direct testimony and as that same schedule shows, the total benefit to PJM (the sum of zones with reduced power costs and those with increased power costs) is only $17.05 million over 15 years.

 In other words, a project with a 15-year cost of almost $500 million would produce just $260 million of system-wide production cost savings over that same time period. This is a further indication that the Project is not economical and should not be constructed.

Under PJM’s methodology for higher-voltage market-efficiency projects, system level production cost savings would receive a 50% weighting in determining the project’s benefits. The other 50% would be made up of savings in the benefiting zones. If that methodology were used for this project, it would result in the Project’s 15-year discounted “benefits” being calculated to be: (50% x $260.13 million) + (50% x $707.29 million) = $483.71 million. This is less than the Project’s 15-year discounted cost of $498 million, meaning that the Project would fail to provide a benefit-cost ratio of 1.0, let alone PJM’s required ratio of 1.25 or higher. Thus, if system-level production cost savings were considered, as Mr. Horger posits, PJM’s own methodology would result in the project failing the benefit-cost test.

Mr. Weber appears to state that my testimony recommends that the Eastern portion of the Project should be replaced either i) by new lines in existing transmission ROWs or ii) by additional circuits on lines already owned by PPL. The first part of this contention is completely incorrect. My direct testimony addresses the use of additional circuits on lines already owned by PPL. It does not address the installation of new transmission lines on new towers along existing ROW. My direct testimony points out that PJM did not evaluate the use of additional circuit positions already available on transmission towers owned by PPL. I do not develop an alternative to the facilities in the eastern portion of Project 9A. I only present the recommendation that use of additional circuits on transmission towers already owned by PPL be evaluated as part of an alternative to the proposed facilities in the eastern portion of Project 9A.