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.

Dear Governor Parson:

We are writing to ask for your support in taking action to protect agriculture in Missouri from Grain Belt Express-Clean Line. The proposal to take wind energy from Kansas through Missouri to PJM Grid is only a speculative venture and is for private gain for a company that is not a utility but a merchant transmission line. Our Missouri PSC has denied this project two times, and we are now at a point of decision on the third application which involves the sale of GBE to lnvenergy, who did not have to make an application to PSC.

Growing up on a family farm in the 1930's, we can tell you about adversity and how we have
seen agriculture change from horse drawn equipment to the development of auto-steer and technology that has greatly enhanced production. Our University Extension Century Farm was settled in 1873. We currently have 5th generation grandchildren involved in the family operation, and are fortunate to be able to continue living on the homestead even though we are in our late 80's.

The GBE proposed line will run through the middle of our farm, tearing up farm ground that has been cared for since 1873.  In fact, the dangerously high voltage line will be within 600 feet of our home and machine shed, a nice view from our patio. Until recently, like you, we took much pride in my cow herd. Our pastures near our home would be affected by the proposed GBE line as well.

In all our years of farming, we have never faced a troubling situation like GBE. And, to think our state government could possibly approve such a project by giving authority of eminent domain adds to our worries.

With all due respect, please protect the future of farming and agriculture in Missouri. If a project like GBE is approved, what is next? We have included a picture of us with some of the
other generations involved in our century farm.

Our regards,
Dale & June Morgan
Madison, MO

L to R: Vickie Morgan Ross, June Morgan, Jay O'Bannon, Dale Morgan, Alan Morgan, Marilyn, Kevin, Jeff & Lisa O'Bannon. Front row: Kade, Grey and Isla Kate

Witness Herling testified that PJM evaluated new proposed second circuits on Furnace Run - Conastone 230kV and Furnace Run - Graceton 230kV and found that these alternatives could potentially violate NERC Reliability standards. It is unclear exactly what PJM modeled here with regard to existing PPL EU-owned facilities because "the Furnace Run - Conastone 230 kV circuit towers and the Furnace Run - Graceton 230 kV circuit towers" are not PPL EU-owned facilities (and indeed have not yet been constructed).

Transource 9A proposes a new circuit from Furnace Run to Conastone. This parallels an existing Otter Creek-Conastone 230 kV line jointly owned by PPL EU and BGE. The PPL EU owned section of the line is designed to accommodate a second circuit without acquiring new Right of Way. PPL EU's Otter Creek 230 kV substation is built next to the TMI-Peach Bottom 500 kV line and can be connected to the line through 500-230 kV transformers. Thus, adding 500-230 kV transformation at the existing Otter Creek
substation, adding a second high capacity 230 kV circuit and replacing the current circuit with a higher capacity circuit on the existing Otter Creek-Conastone 230 kV line may provide similar economic benefits as the proposed new Furnace Run substation and a new double circuit line between Furnace Run and Conastone substation. Furthermore, there is another PPL EU-BGE jointly owned line (Manor-Graceton 230 kV) in the area that can be utilized to add a second 230 kV circuit from north to south.

...it does not appear that PJM ever considered adding a new 500 kV circuit from the existing TMI-Peach Bottom 500 kV line (utilizing a new 500 kV substation at Otter Creek) to the 500 kV Conastone substation, utilizing PPL EU owned right of way on the Otter Creek- Conastone 230 kV line.

In fact, a new 500 kV circuit utilizing PPL EU's existing Right of Way between a new Otter Creek 500 kV substation (to be built by expanding PPL EU Otter Creek 230 kV substation) and the existing Conastone 500 kV substation will provide more capacity than the total capacity of the proposed Transource 9A project, which only adds a new double circuit 230 kV connection between the Furnace Run and Conastone substations.

Dear Governor Parson:

We have been engaged in farming since 1978. In fact, to help make ends meet, one of us worked as a Social Worker for Missouri Department of Social Services Children's Division and Department of Health and Senior Services for over 25 years.

Nothing has been as threatening to our livelihood as Grain Belt Express-Clean Line. We have been strongly opposed to the project since finding out in mid-December 2013. Most upsetting is this company, a speculative merchant transmission line, was even eligible to apply to our Missouri Public Service Commission to become a utility company and take property through eminent domain.

As a farmer, you know the sacrifices involved to purchase a farm, nurture the land, and be good stewards to raise a crop or maintain pasture for cattle. We have implemented all of the technology to farm more efficiently and want to leave a legacy for our sons and grandchildren. The proposed GBE plan would devastate our operation as it is proposed to run through the middle of farms that are open and mostly tillable. The proposed 27 foot concrete piers below ground sickens us as we would lose our investment in conservation practices and production in the 200 foot easement, and anywhere the heavy construction equipment runs across the fields.
There are many other issues induding safety, inability to raise corn under the transmission line, loss of our technology (GPS), and the list goes on.

Missouri PSC has twice denied the GBE application. A third application is now in the hands of PSC commissioners for a decision. Now that GBE has started the sale of their company to lnvenergy, it seems very wrong for PSC to consider lnvenergy, a company that will not close on the deal with GBE until there is PSC approval, and the remaining 700 easements are obtained through eminent domain. Since Iowa has legislation to prevent eminent domain for merchant transmission companies, and Illinois Supreme Court has denied GBE and a sister company RICL as a utility, we are suspicious why lnvenergy would even want to buy GBE-Ciean Line. A more thorough investigation is needed.

We are not against renewable energy. But, wind does not need to be shipped in from Kansas, and not at the expense of destroying highly productive farmland in Missouri.

We are proud to have a Governor who stands for agriculture. Please take action within your power to protect property rights and landowners from GBE. We want to keep agriculture number one in Missouri.

Respectfully,
Kevin O'Bannon
Marilyn O'Bannon

PJM proposed a change to the way market efficiency projects are evaluated. PJM members were frustrated by the fact that few large projects were passing the metrics of their old formula. So they proposed relaxing the rules so that more projects would pass.

The implications of these changes are the primary reasons that this project is still being proposed by PJM today. Before this change, the benefit side of the B/C ratio was 75% based on the benefit across the entire PJM footprint (PJM uses the word “socialized.”) If a proposed project, such as the IEC, resulted in lower-rate “winners” and higher-rate “victims”, 75% of the calculation was made on the basis of netting the winners against the victims. After the change, 100% of the calculation for Lower Voltage projects, and 50% of the calculation for Regional projects, is based solely on the savings to the “winners”, without consideration to the higher rates incurred by the “victims.”

Both the IEC-East and IEC-West are able to carry more power than a Regional  345kV line, and taken together, move more power than many Regional double-circuit 500kV lines, a configuration that forms the backbone of the electrical grid.

Based upon the amount of capacity in those lines, the IEC clearly qualifies as a Regional project, as Regional was initially intended.

IF THE IEC WERE CLASSIFIED AS A “REGIONAL” PROJECT, HOW WOULD THE B/C CHANGE?
The benefits of the project would be subject to a 50/50 weighting of overall production cost to load energy payment. The $707M benefit that currently is weighted at 100%, would shrink to $353.5M. The other 50% of the weighting would be based on net production cost changes, a number that includes production cost increases as well as decreases. I have not been able to identify this value in the non-confidential public discovery record, and discovery is still pending. However, we know from OCA filings (SJR-3, p2), that many zones saw significant cost increases, and that the net change in load payment over 15 years was just over $-17M. Net production cost could not have decreased much more than that, or the savings would have been passed on to the customers who saw increased rates. Even assuming a generous $50M savings (which approximates the estimate in the optimistic 2015 14 RTEP presentation) would yield a benefit of only $353.5+(0.5*50)=$378.5M, far less than the $505M cost of the project, yielding a B/C ratio of 0.74.