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More Than Meets the Eye?

10/30/2017

12 Comments

 
There's that smell again... the pungent aroma of an overflowing outhouse on an August afternoon.  The smell seems to be coming from Clean Line Energy Partners.  Again.

What do Russian investment schemes, tax fraud, human rights violations, and clandestine meetings have to do with Clean Line Energy Partners?  I'm not really sure but there's an aroma that's hard to deny.  Somewhere embedded in this scandal is Ziff Brothers investments, the same Ziff brothers who held a majority interest in Clean Line Energy Partners until recently out-invested by Bluescape.

Bluescape has invested more than $73M in Clean Line?  Why?  Clean Line hasn't been making any headway in getting its proposed projects approved and built.  Instead, Clean Line seems to be regressing with the recent crop of court opinions that invalidated permits previously granted, or prevented new permits from being issued.  Where's the draw?  What makes investing in a company that is retreating further and further from realizing revenue so attractive?  Do you smell it?

Now we find Clean Line investor Ziff Brothers smack dab in the middle of today's Russian scandal.  The accusation has been made that Ziff Brothers evaded taxes in Russia in the amount of millions, and may ultimately own shares in a Russian company that foreign interests are prohibited from owning.  And this isn't the first time Ziff Brothers got a mention in some foreign corruption scandal.  There was the African thing.  Accusations have been made in Australia.

But what's going on here at home?  News reports indicate: "According to available information, the Ziff Brothers were involved in funding both of Obama's election campaigns and have been dubbed by the U.S. media as `the Democrats' main sponsors," Veselnitskaya wrote, in a Russian language document translated by NBC News."

And we've yet to uncover what exactly prompted the Obama administration's Department of Energy to use Section 1222 of the Energy Policy Act as a vehicle to promote Clean Line through a shady RFP with extra-statutory provisions for "renewables" and the subsequent murky two-step march to ramrod it through without proper due process.

Clean Line still bravely claims that its projects are "moving forward," despite its obvious lack of customers and revenue prospects.  And investors keep investing in the company, long past the time when any other legitimate transmission company would have abandoned the idea.  Other companies have shareholders they have to answer to, and public scrutiny of their finances.  Clean Line?  Well, it's not a publicly traded company, and it has no public rate structure.  It's all a murky mystery.  How does a company that hasn't built anything and has no revenue spend upwards of $200M attempting to get permits?  Is this all on the up and up?

And when might the U.S. Dept. of Energy launch an investigation of the Sec. 1222 process?  Or does the DOE enjoy "participating" in a transmission project with a third-party investor mired in the current Russia scandal?  Has  our own government participated in this international scheme? 

Money, politics, money, influence, money, shell companies, money, tax evasion, money, money, money.  And what's that smell?

12 Comments

Noper on the NOPR

10/25/2017

1 Comment

 
Tongues are wagging about the DOE-introduced Notice of Proposed Rulemaking (NOPR) regarding compensation of baseload generators for the "resilience" they provide.  Hundreds of bombastic comments were filed with the Federal Energy Regulatory Commission, many venturing far into the periphrastic category.  I genuinely feel sorry for the FERC employees who have to read all these and tabulate some summary of their main points.  Is there a point?  Wouldn't a simple "yes" or "no" have sufficed?  Some media outlets are pretending to read them all and produce their own little summaries.  My advice?  Don't waste your time.  You may not live long enough to get through them all.  What a colossal waste of time!

The cost of all the legal billable hours spent creating this dreck (and reading it!) could probably have been better spent rebuilding Puerto Rico's devastated electrical system.

Blah, blah, blah, little commenters.  As if.

So, I looked at the docket.  Read very, very few.  You can probably limit your review to scrolling through the docket sheet.  Here's a few things I gleaned from my own scroll...

FirstEnergy should probably get some sort of award for "inspiring" the greatest number of comments from "independent" third parties, all concocted in perfect legal prose.  Who actually wrote all these?  And will the cost of such find its way into my electric bill?

The Nuclear Information & Research Service should probably get its own award for being a major factor in crashing FERC's e-filing system on comment deadline day.  Comment in 76 separate parts?  Was that really necessary?  It must have taken the filer all day to accomplish that.  And I thought filing testimony and exhibits in 20 parts was trying on the patience, once upon a time.  Seventy-six (76!) parts.  At least it made scrolling through a certain part of the docket a lot faster.  What were these 76 parts, anyhow?  Layperson comments.  Gushing on about clean energy.  Some which predated the NOPR by months.  Now couldn't this commenter have filed these 76 parts earlier to avoid this congestion on deadline day?  Couldn't all of these commenters have avoided congestion by filing their comments earlier?  A deadline is just that... a deadline.  It doesn't prevent earlier participation.  Lawyers love playing the deadline game, an exercise in not showing yours until the other parties show theirs -- legal chicken.  While waiting until the last minute to file may have some purpose in preventing other parties from using your filing to bolster their own, in this NOPR it was pointless.  The only thing these commenters accomplished, apparently, was crashing FERC's e-filing system.  I pity the poor soul who was trying to get something filed on another docket that day.

Some of the comments attempted ad hominem arguments that we must build more transmission to achieve "resilience."  Build, build, build, a bigger, more diverse network of vulnerable energy links is just what we need.  (Thanks, WIRES, you're nothing if not trying to fill your own pockets.  Every.single.day.)  But what good is a pile of wire if it's not connected to a generator?

The only comment worth reading was written by Amory Lovins of the Rocky Mountain Institute.  Not only is it a fresh, entertaining joy to read, it tells FERC (and DOE, and all the other commenters!) everything they need to know about "resiliency."  Such as:
The design principles and practices that create energy resilience (or, as the Secre­tary calls it, resiliency) were first framed for the Penta­gon in 1981, and still broadly guide DoD doctrine for resilient power supplies to military bases and other facilities critical to national security. These principles do not include continued or enhanced reli­ance on inherently vulnerable powerlines hauling electric­ity hundreds of miles from remote central power stations—a system rife with single points and modes of failure re­quir­ing costly redundancies but still not fully effective, as these comments elaborate. Such grid-dependence is the largest factor preventing electric resilience.
Sorry, WIRES, you're not resilient.  Instead:
Rather, resilient design logically starts at the customer and works back up the supply chain, seeking to make that chain as short as possible and each of its links robust, redundant, with graceful failure and quick rerouting or repair. As a lay summary of Brittle Power explained, a resilient system “has many relatively small, dis­­persed elements, each having a low cost of failure. These substitutable compo­nents are interconnected not at a central hub but by many short, robust links. This configura­tion is analogous to a tree’s many leaves, and each leaf’s many veins, which prevent the random nibblings of insects from disrupting the flow of vital nutrients.”
And what's wrong with an increasingly larger grid connecting more remote power generators?
Thus the NOPR’s obsession with continuity of fuel supply to generators—even if 2.1–2.4’s rebuttals below were invalid—ignores the grid. Yet any rational treat­ment of electric reliability and resilience must focus primarily on the grid.
 
The Electric Power Research Institute long ago estimated, and modern data agree, that roughly 98–99% of power failures originate in the grid, and ~90–95% of those in the distribution grid. As the NOPR’s §II(A) rightly notes, Ameri­ca’s grid compris­es 707,000 miles of high-voltage transmission lines, 55,800 substations, and 6.5 million miles of local distri­bu­tion lines. All are interruptible by high winds, lightning, ice storms, tree limbs, cars crashing into power poles, squirrels, birds, operator errors, fires, solar storms, electro­magnetic pulses, cyberattacks, or rifle bullets.
 
As I write this, about three million Puerto Rican American citizens face months of further blackout, with only 16% returned to service after three weeks, because a hurricane destroyed their grid, even though their 98%-fossil-fueled utility has ample and available generating capacity with adequate fuel on hand. The NOPR is irrelevant to them and to the other Americans blacked out in Texas by Harvey, Florida by Irma, the Virgin Islands by Irma and Maria, etc. Hurricane Maria’s grid destruction in Puerto Rico alone has already about doubled in 2017 the total outage cus­tomer-hours experienced nationwide in 2016.
 
Yet the NOPR says and does nothing about the brittle grid connecting power plants to customers—only the virtual non-problem of how big a pile of coal sits at each plant. The NOPR does vigorously seek to prevent and reverse the competitive mar­ket exit of outdated plants typically sited half to several states away from cus­tom­ers, hence inherently vulnerable to grid failure. The NOPR’s effort to reverse the market-driven decentralization and diversification of historic grid depen­dence would weak­en national security: since grid failures dominate total failures, any electricity strate­gy that perpetuates and increases reliance on remote central power plants, no mat­ter how reliable they are, will increase vulnerability and reduce resilience.
It doesn't matter how reliable your one generator is if the transmission network that carries generation to users isn't secure.

The answer?  Distributed generation -- power generation near users that relies on its diverse nature to prevent widespread blackout due to the failure of one generator.

Central station generators and a long network of fragile transmission and distribution lines (which includes any aerial connection, no matter how old) are last century's "resiliency."

How much more time and money will our government and its investor owned-utility masters waste on this manufactured problem?  As much as you give them, little ratepayer, since you're paying for this entire debacle.  Nothing to see here... let's move on.
1 Comment

Transource Releases Routes... and Propaganda

10/18/2017

7 Comments

 
Transource hit the media up with its proposed routes for its Independence Energy Connection early this week.  Transource included lots of propaganda designed to pacify the opposition beast as well.  I don't think it's working.  The route announcement only served to incite even more opposition, as people who maybe thought they were safe, or hadn't paid much attention to the problem before, came out of the woodwork to voice their opposition.

What was it Transource said about its project?
The goal is to alleviate congestion on the high-voltage electric grid, and benefit customers in the region, including parts of Pennsylvania and Maryland, Transource said in a news release. 
But who exactly will benefit from the project, and to what extent?

Regional grid operator PJM Interconnection has already done the math and assigned project cost commensurate with benefit.  80.5% of the project costs will be paid by ratepayers of Baltimore Gas & Electric, PEPCO, and Dominion, therefore 80.5% of the benefit will be realized by those ratepayers.  However, 100% of project impacts will be realized by landowners in communities in Pennsylvania and Maryland that will receive just 6% or less of the project's benefit.  Although Transource continually attempts to gloss over this fact, it doesn't change the math.  Communities along the proposed route are not receiving benefit commensurate with their sacrifice.

New transmission projects dreamed up by PJM to "alleviate congestion" and promote the increased use of certain types of power generators have a long track record of failure.  "Congestion" is a fleeting economic concept used to justify building more transmission for export across the region.  You'd think PJM might have learned its lesson about manipulating markets from the crashing failure of its Project Mountaineer initiative, but obviously that's not the case.  After retreating to its lair and licking its wounds for 10 years, PJM is at it again.  And the victims of its latest scheme are having none of that.

Transource also says:
Abby Foster, a community affairs representative for the company, said typical farming practices in both counties will be able to continue in the rights-of-way. She also said that based on the feedback from the community, Transource will use a monopole structure for the towers, instead of the lattice structure which was in the original proposal. 
“By including community members in the siting process, rather than engaging them after decisions were made, we were able to consider and accommodate many landowner requests,” said Transource Director Todd Burns.
Abby Foster is a public relations spinner employed by The Bravo Group, under contract to Transource to put a nice face on its transmission proposal.  Abby says:  "My experience and strengths include targeting audiences with well-crafted messaging using both traditional and new media to gain exposure, persuade and motivate. Whether it be a product, campaign, event or reputation management and exposure, I can develop the campaign from strategy, to content and graphics, to launch. I will work with you to set benchmarks, track progress and achieve your campaign goals."   What does Abby Foster know about "typical farming practices"?  Any farmer who relies on Abby Foster to educate them about "typical farming practices" may find themselves in a bit of a bind.  And what about that "feedback" she received about monopoles?  I don't know of anyone who opposes this project whose opposition would be ameliorated by the use of monopoles.  In fact, I haven't heard one opponent even mention a preference for monopoles.  The preference for monopoles is parent company AEP's preference, touting what it characterizes as its revolutionary "BOLD" design, a rather flaccid attempt to make people believe everyone else loves smartly designed transmission structures.  How can Abby say that they're making some accommodation towards the public when those people have not indicated a preference?  It's like asking people how they want to ingest poison... would you like to drink it or chew it? 

Todd Burns is another poison purveyor who tells the community how they were included in the decision making, but that's not entirely honest.  The community doesn't just want to be "included" in the siting of the project, the community wants to be included in the decision to build this project in the first place.  That's where community involvement should have begun.  Instead, Todd asks the community how it would like to ingest its poison, without asking them if they would like to be poisoned in the first place.

Transource must think the communities are really gullible, pretending to make concessions so that the company appears reasonable.  Transource's concessions are imaginary and not what the community asked for at the "Open House" meetings.  I'm pretty sure the communities asked for no transmission project at all, not one with monopoles that encourages the community to fight with itself over placement.  The monopoles and "community inclusion" are nothing but a smoke screen.

Then Abby asks the community to get into the Kool Aid line:

Foster added that over the next couple of weeks the company will contact  landowners with property on the proposed route. She said during this time, owners can raise issues like potential crop loss during construction or access roads that need to be built, and negotiate compensation.
 
"They're really looking to minimize and reduce any impacts that might occur to any agricultural practices," Foster said on behalf of Transource.
Maybe landowners don't want to talk to land agents this early in the game.  After all, this project isn't a sure thing until it's been carefully examined and approved by state regulators.  Chances are that one or both states will deny the application, or simply delay it until the project collapses underneath the weight of its own hubris.  Why purchase easements when a route has not been approved?  Because Transource is guaranteed to collect its sunk costs, even if the project is later cancelled.  And if it is cancelled, who wants to be left with an open easement across their property that can then be used for some other project?  Landowners should also consider how easements are typically purchased for transmission line projects.  A company may pay up to 10% of the purchase price at signing, with future small payments made over time as indicated in the contract, with the balance paid at the time construction begins.  Once signed, a landowner (or his heirs) must honor the contract until the easement is released.  This project could be tied up by regulators and courts for years. 

Any landowner who even considers talking to a Transource land agent should first consult with an attorney.  Although Transource will tell you that you don't need an attorney, remember that the contract the land agent presents to you was written by Transource's attorney, for the benefit of the company.  Don't you think you should protect your interests, too?

Transource seems to be in an all-fired hurry to get folks "managed" to go along with its project.  It's your land, it's your choice.
7 Comments

Clean Line STILL Has No Customers

10/13/2017

12 Comments

 
You're going to have to dig really deep to get past the out-of-control ego and the made up facts in this fake news story, but once you do, here's what emerges:
The company, which has almost 40 employees, has no current source of revenue.
No source of revenue.  For eight years.  How many other companies do you know of that haven't made a dime of revenue in 8 years and still pretend to be successful?  And then there's the claim that there are "almost" 40 employees.  How many is "almost" 40?  Is it 35?  Is it 30?  Is it 15?  Is it 10?  In the photo of the "team room" I count 8 desks and 2 people.  Was it lunch time?  After hours?  A holiday?  Why would a reporter visit the office when there's hardly anyone in it?  Or does Clean Line no longer have a team?  Clean Line's physical "team" room looks pretty much like their late "our team" webpage... unpopulated.

But yet Skelly claims they're all heroes.
“You would think in eight years, you would have sort of a lull, but it’s a sort of a mad dash every day to move these projects forward,” Skelly said. “It’s more like an Ironman [Triathlon], not a marathon. It’s more like a decathlon, but it goes on for eight years.”
Iron parts aside, there's a fine line between fiery determination and hopeless lunacy.  It's probably going to go on a lot longer than eight years, because:
... neither TVA nor any other utility has signed a contract to buy the power the project would transmit.
Picture
Poor, poor, pitiful Michael Skelly.  Everyone's against him.
Skelly said that while landowners’ opposition to transmission projects is “understandable,” the pushback from within the industry is more frustrating.
...................
Pointing to Commonwealth Edison’s opposition to the Rock Island project in Illinois, he said, “Why are they doing that?..."

Skelly tells a "story" about an anonymous person saying Clean Line can't build its projects fast enough, touts an old MOU with the TVA that required TVA to merely consider the project (which they did and declined to sign up), and shares that "very large consumers of power ... care about carbon..." but yet Clean Line has no customers.

The article also claims
Clean Line has worked hard in Missouri to gain community support for Grain Belt.

“You have to build alliances,” Skelly said. “We’ve got support from labor groups, environmental groups, business groups, from political leaders … doing these projects without building those types of alliances would be really, really difficult.”
And it's really, really, REALLY difficult to permit a project that does not have "community support" that's not bought and paid for.  Here's what the ACTUAL community members along Clean Line's proposed route have to say about how Clean Line tried to build "community support":
And when community support fails and states deny permits?  Threaten to go whining to the Feds.
Skelly has said seeking DOE authority for the Grain Belt and Rock Island lines is an option but not his first choice because it is slow and costly.
Clean Line sorta jumped the gun on that one, don't you think?  It had applied to the U.S. DOE as a Section 1222 project before it was even rejected by the Arkansas Public Service Commission.  And then the APSC's denial stated specifically that it was denied because Clean Line didn't intend to serve any customers in the state.  All Clean Line had to do was propose a converter station in the state and reapply.  But it ignored that and persisted with the DOE to secure the wonderful, awesome, powerful participation of the Feds in its project.  And what did that change, anyhow?  Well, it cost millions.  And it took years.  Skelly is right about that.  But it also bought them nothing.  A year and a half after DOE agreed to participate, Plains & Eastern is still going nowhere.  Because it has no customers.  DOE participation hasn't turned out to be so magical after all.

Clean Line's investor line up keeps shifting.  Clean Line likes to pretend its investors are quite hush-hush, but they manage to drop enough bits of random information in different venues that one merely needs to collect them all and do a bit of math to bring the picture into focus.
Clean Line spokeswoman Sarah Bray said Bluescape is now the company’s “principal investor,” although National Grid, ZBI and the Zilkha family have retained equity stakes.
The last time I did an info compilation in 2015, the investor totals looked like this. 

GridAmerica Holdings (National Grid) has invested $55.7M and currently owns 40% of the company.

ZAM Ventures (Ziff brothers) has invested $73.8M and currently is the majority owner, with a 53% stake.

Michael Zilkha has a piddling $2.8M invested, which gives him a 2% ownership interest.

The remaining 5% (or $6.7M) is owned by "Clean Line Investment" which is some vague investment vehicle owned by "service providers and employees of Clean Line."

Total investment:  Around $140M

Now Sarah Bray informs us that Bluescape is the majority investor, which indicates that Bluescape has dumped more than $73.8M into the Clean Line sink hole.  Clean Line must be more than $200M in the hole to their investors over all, and still not a glimmer of hope in sight.

Here's what's REALLY going on with Skelly's projects (pay no mind to that "summary" in the article, it's missing quite a few key facts):

Rock Island Clean Line: The Illinois Supreme Court opinion said that Rock Island Clean Line is not a public utility, and therefore may not use eminent domain to acquire land for its project. The Court reasoned that since RICL had claimed it has not asked for eminent domain authority, that it didn’t need it and should proceed to build its project without eminent domain authority. I urge you to read and report on the actual Opinion, instead of taking the loser’s view of the case as a fact. See http://www.blockricl.com
In addition to not being a public utility in Illinois, RICL has also been denied the ability to ever use eminent domain in Iowa through new legislation passed last year. See
https://www.iowastopricl.com

Grain Belt Express: The Illinois Supreme Court opinion on RICL determined it was not a public utility. If RICL isn’t a public utility, than neither is GBE, which is an identical project that also runs through Illinois. There is currently an appeal in the Illinois 5th District Court, an opinion can come at any time. The issue in that appeal is whether GBE was a public utility at the time it applied for its CPCN at the Illinois Commerce Commission. If RICL cannot be a public utility even after receiving a (since vacated) CPCN, than GBE cannot be a public utility before it even applies. GBE is denied for the third time in Missouri, and the opponents also filed an appeal in the Western District Court of Appeals. It is unclear which court will hear the appeal, and unlikely that the Western District will be overturned. Remember, the Western District’s opinion has already been examined by the Missouri Supreme Court and let stand. These are all fatal issues for GBE.

Plains & Eastern: The Arkansas delegation met with Rick Perry again just recently. Maybe you should ask them what they think, instead of asking Skelly what they think? While Skelly reports they have bought right-of-way, he failed to mention that right-of-way acquisition stopped months ago, and a land agent told a landowner that Clean Line was stopping all land acquisition because it had “bought too much right-of-way.” Skelly also forgot to tell the reporter about the recent rejection of Clean Line’s offer of $80M to the Cherokee Nation in exchange for rights to cross the Arkansas River. Without the Cherokee Nation’s permission, P&E is sunk. The reporter also completely failed to mention the ongoing Federal court challenge to DOE’s presumption that Section 1222 gives it condemnation authority. An important hearing is coming up next month.
Really, what's there to be optimistic about here?  Are the investors really looking forward to dumping more money into lobbying and paid advocates, lawyers, and hopeless legal actions?  How many more years are the investors going to watch their money pissed away on fire stations and paid political hacks when what Clean Line so desperately needs is customers?

A fire station "compound" and pictures of Bob Marley in your deserted office doesn't make one successful in the energy world.  Perhaps one would need to pop one's head out of one's own derriere now and again to do a bit of a reality check.  Maybe some of us are laughing with you... and maybe some of us are laughing at you.

I believe this looks like a portrait of a dying company whose leader is floating merrily down de Nile in an overpriced party boat.  Party till the cash dries up (or the overly bright orange carpeting and quasi-mod decor makes you so dizzy you throw up).  And don't forget to take a spin around the fire pole on your way out.
12 Comments

Southern Cross Transmission Wants a Free Ride From Texas Ratepayers

10/11/2017

1 Comment

 
That seems to be the conclusion of the Public Utility Commission of Texas (PUCT) in its most recent Order regarding the Rusk to Panola transmission connection that will move cheap electricity out of Texas as part of the Southern Cross Transmission project.

Southern Cross is another merchant transmission project supposedly "for wind" that wants to export cheap Texas power into Southeastern states via a new 400-mile HVDC transmission connection.  A "merchant" project is one for which investors shoulder the risk because it doesn't have a guaranteed ratepayer-financed revenue stream.  Merchant projects are not found needed for reliability, economic, or public policy purposes, therefore ratepayers shall not be forced to finance them.  Merchant projects generally negotiate rates with willing customers to finance their projects.

Southern Cross had to jump an additional hurdle that other Midwestern merchant projects did not.  Southern Cross proposes to export wind generated transmission from the Electric Reliability Council of Texas (ERCOT) into another electric region.  ERCOT is its own little one-state electric region island in order to escape the jurisdiction of the Federal Energy Regulatory Commission (FERC) that applies to other multi-state electric regions.  In order to connect ERCOT resources to another region, Southern Cross went through a process at FERC that allowed the connection without compromising ERCOT's independence.  Part of that deal required a connection from within ERCOT to another portion of Texas that was not within ERCOT.  This is the proposed Rusk to Panola project, a double-circuit 345kV line.  Southern Cross's transmission project would then connect to this project and move the electricity further across Louisiana and Mississippi, and connect with the grid in Alabama.  Rusk to Panola (known as RPTP by Southern Cross) is only necessary to provide electricity to Southern Cross.  RPTP needs the permission of the PUCT to build the project.  While PUCT acknowledges that it must approve the project, it may do so with conditions.  And the conditions PUCT placed on its approval have been met with resistance by Southern Cross.

Holy shell companies, Batman!  RPTP is supposedly owned by the City of Garland, Texas, but will be paid for by some entity known as Rusk Interconnection, LLC.  Just like peeling an onion... layer after layer after layer... but back to the main event...

PUCT has directed that any costs caused by the RPTP be assigned to Southern Cross Transmission, and not ERCOT ratepayers.  ERCOT ratepayers are already shouldering the burden of ERCOT's CREZ projects, a series of new transmission lines intended to move wind-generated electricity from western Texas to load centers in the eastern part of the state.  CREZ hasn't come cheap for ratepayers, and it looks like Texas may have overdone it, supplying so much "cheap" wind power that there is a surplus.  Southern Cross proposes to alleviate that surplus by exporting it to other states.  But yet, Southern Cross doesn't want to pay the full cost of its project's effect on the ERCOT system, instead purporting that ERCOT ratepayers would receive some "benefit" from Southern Cross and must therefore pay for that "benefit."  Except these aren't "benefits" that ERCOT ratepayers need.  At best, they are "benefits" that ERCOT ratepayers don't need or want, "benefits" that are foisted upon them because of Southern Cross's project.  Who wants to pay for "benefits" they don't need?

PUCT says:
The current market design in ERCOT primarily places the responsibility for system costs on ERCOT customers. This docket has revealed that the Southern Cross DC tie will result in additional costs to ERCOT, which include extraordinary costs that arise specifically from the Southern Cross DC tie, the Garland line, and the Garland or Oncor substations. Because the customers of exported power are not ERCOT customers, under the current market design and rules, they will not bear any responsibility for the extraordinary costs specific to the Southern Cross DC tie, Garland line, and Garland or Oncor substations that they impose on the ERCOT system. Southern Cross believes that those customers—and therefore Southern Cross—should get a free ride as to these extraordinary costs. The Commission disagrees and determines that the public interest demands that ERCOT ratepayers should not bear any of the costs associated with the Garland line, the Oncor substation, the Garland substation, or the Southern Cross DC tie that are properly borne by others.
The costs that a user of the ERCOT system causes cannot be determined simply by focusing on the costs of the facilities on the last forty miles of a multi-thousand-mile network. There is little doubt that additional facilities will be required in ERCOT because of the electricity flowing over the Southern Cross DC tie. Southern Cross believes that the costs of those facilities should be borne by customers in ERCOT, not the out-of-ERCOT customers that cause those costs.  And Southern Cross opposed even an investigation into whether revisions to the current ERCOT cost-allocation method were needed. Southern Cross attempts to justify this free-ride position based on theoretical benefits that this project will provide to ERCOT.

The Commission agrees, however, that no party met the burden of proof to prove what benefits, if any, Texas ratepayers will enjoy as a result of the Garland line and the Southern Cross DC tie and concurs with the ALJs that any benefits are questionable.  This is one of the issues that will be evaluated by ERCOT and if subsequent investigations show any benefits, then any such benefits could be reflected in the new market-design rules. The record in this case does not justify a free ride for these questionable benefits.  Texans are in the process of paying billions of dollars for the newly constructed CREZ transmission lines, and for substantial other facilities, that are integral to transmitting electricity to the Garland line and the Southern Cross DC tie. As proposed by Southern Cross Transmission, the Garland line would simply interconnect with these CREZ lines and reap benefits without paying its fair share of costs.

Further, Southern Cross argues that the DC tie will not cause a substantial increase in ancillary services needed in ERCOT, and that no change in the current manner that ancillary costs are assigned is necessary.  Southern Cross argues that the DC tie should get a free ride on these extraordinary costs also. The Commission agrees that this is a highly technical question and has requested ERCOT to evaluate this matter. The Commission also agrees, however, with ERCOT and other parties that additional ancillary services will likely be required to support the operation of the DC tie, and at certain levels, that requirement may be significant.  And, as with the other extraordinary costs discussed in this Order, it is appropriate that the cost causer be responsible for the costs, not for ERCOT customers to bear the costs of others. The Commission does note that Southern Cross softened its position some by agreeing that it could and would provide reactive-power service through the DC tie.

One benefit offered by Southern Cross is the lowering of the price of electricity in ERCOT during high-load periods.  However, Southern Cross Transmission's analysis does not appropriately account for the effect on the ERCOT energy market, which sends market signals through scarcity pricing when electricity resources are becoming scarce. Distortions to ERCOT's market signals could prevent the energy-only market from appropriately responding to shortages, leading to inadequate resources in this market. This risk to ERCOT's market structure and the grid's reliability must be assessed and addressed through recommended changes.

PUCT did a great job fishing out the "but for" costs of the project, that is those costs that would not occur "but for" the construction of RPTP.  Other states could take a lesson from this Order.

Southern Cross has asked for another rehearing on this matter by PUCT.  Just paying their own way doesn't seem to be an option for Southern Cross.  Is that because the project is not profitable unless it is subsidized by ERCOT ratepayers?

Meanwhile, Southern Cross doesn't seem to be very popular in Mississippi, where numerous landowners have intervened in the permitting process at the Mississippi Public Service Commission.  Bravo, landowners!  To see the Mississippi docket, go here and search for Case Year 2017, Case Type UA, and Case No. 079.

Southern Cross seems to have at least as many problems as the Clean Line projects proposed to its north.  It's a fact:  Landowners in fly-over states object vociferously to the use of eminent domain on their property to benefit electric ratepayers in other states and financially support private enterprise that wants to make a killing speculating in the electric power markets.  Multi-state transmission projects "for wind" are money pits on regulatory minefields that will never succeed.
1 Comment

Grain Belt Express Was...

10/9/2017

3 Comments

 
This needs no explanation.  Just watch.
3 Comments

Transource Lies About Project Benefits

10/9/2017

0 Comments

 
It's a noun, not a verb.

When Transource was faced with the reality that its Independence Energy Connection (also known as "Projects b2743 & b2752" and "Market Efficiency Project 9A" in PJM parlance) did not provide much benefit to the geographic area sacrificed for the new transmission lines, it re-wrote its project "Fact Sheet" to gloss over this shortcoming.

Transource now says:
Who benefits from the project? For this project, PJM projects $622 million in cost savings for consumers in 10 power zones. Those zones are listed below and displayed on the map to the right. Generally speaking, when low-cost electricity is introduced into the market, it helps drive the overall competitiveness of the electric grid for all power zones.

Benefiting Power Zones Identified by PJM:

American Electric Power Co., Inc, Allegheny Power Systems, Baltimore Gas & Electric, ComEd, Dayton Power and Light Company, Duke Energy Ohio and Kentucky, Duquesne Light, Dominion, East Kentucky Power Cooperative, Potomac Electric Power Company.

The high-voltage electric grid operates across towns, counties and state boundaries. As such, the benefit of this project is not confined
to geographical boundaries. Customer-driven improvement projects in one area of the grid can benefit customers on another part of the electric grid. For example, recent improvements made in Indiana and Westmoreland counties, more than 100 miles away, improved how the grid operates in York County.


And here is the power zone map supplied by Transource.
Picture
Transource wants the public affected by this project to believe that benefits will be spread evenly over all power zones.

But that is not the case.  Transource must have run out of room because it did not also supply the Cost Responsibility percentages for the power zones on its map.  Or maybe they purposely didn't include it because it did not support their propaganda narrative.

One of the most basic rules of assigning cost responsibility for new transmission projects is that cost must be commensurate with benefit.  Therefore, the first step to assigning costs to certain zones is to determine benefit for each zone.  PJM did that analysis and posted its cost responsibility assignments here.
Picture
Since cost is directly proportional to benefit, you may interpret this chart to show the percentage of benefit to each power zone.
  • AEP zone = 6.56%
  • APS zone = 8.73%
  • BGE zone = 19.73%
  • ComEd zone = 2.16%
  • ConEd zone = 0.06%
  • Dayton zone = 0.59%
  • DEOK zone = 1.02%
  • DL zone = 0.01%
  • Dominion zone = 39.92%
  • EKPC zone = 0.45%
  • PEPCO zone = 20.87%
If you add up the BGE (Baltimore Gas & Electric), Dominion (Northern Virginia) and PEPCO (Washington, DC) zones, you will get 80.52%.  That means that 80.52% of the benefits of this project will be confined to those zones.  Baltimore, Northern Virginia and Washington, DC, will receive more than 80% of the benefit from this project.

There will be no new transmission lines in Baltimore, Northern Virginia or Washington, DC (oh, the horrors, the horrors!).  If PJM tried to build new transmission in these urban areas, even to lower prices by a few cents per year, the pushback would be enormous.  Instead, PJM (and Transource) have moved the burden of new transmission lines into the APS zone (8.73% of project benefit) and Metropolitan Edison Co. zone (ZERO percent of project benefit).  The APS zone will receive just 8% of the $622M benefit, but it will shoulder 100% of the project burden.  In the case of MetEd, the people will shoulder 100% of project burden in exchange for... NO BENEFIT WHATSOEVER.

So, when Transource says that everyone benefits, that's just not true.  Some benefit more than others.  And the ones receiving the lion's share of benefit from this project are people who have sacrificed absolutely nothing in exchange for saving a few pennies on their electric bill.

As well, "generally speaking" providing new pathways for power exports from a constrained area serves to raise prices for the previously constrained area.  If an area is flooded with cheap power that has no where else to go, competition is at work to keep prices at the lowest possible.  Once the area is no longer constrained, the area must now compete for pricing with new areas where power is more expensive.  If a generator can sell its power at double the price in Baltimore,  it has no incentive to compete with other suppliers to keep prices low in the previously constrained area.  Instead, power prices in the previously constrained area will rise, becoming competitive with prices in Baltimore.  Market efficiency transmission projects perform a leveling of prices across certain regions between source (generation) and sink (power users).  Transource forgot to tell you this, as well.

Baltimore, Northern Virginia and Washington, DC, will receive more than 80% of the power savings from this project.  Transource has lied through omission.

Hmm... maybe it is a verb after all.
0 Comments

Doom and Gloom for Grain Belt Express

10/8/2017

0 Comments

 
Picture
I keep hoping that Clean Line Energy Partners will invest in some media training for "director of development" Mark Lawlor.  When this guy gets stressed out by reporters he says the dumbest things!  When interviewed recently about the Illinois Supreme Court's opinion that Clean Line's RICL project is not a public utility, and how that might impact the Grain Belt Express project, Lawlor said:
“Anytime you have legal clouds pending, you’re not going to spend a lot of time with that uncertainty,” said Lawlor. “We’ll see how the decisions play out before we put a lot of people to work building the project.”
Legal clouds?  A decision by the Illinois Supreme Court is just a "legal cloud" that could blow away any day now?  Not hardly.  But more interesting is Lawlor's admission that he's "not going to spend a lot of time with that uncertainty."

Wack-a-mole, Waldo?  No matter how many moles you whack, more are going to pop up somewhere else, you know... sort of like I've been telling you for years.  So why bother spending all that money on an appeal in Missouri (not to mention your very expensive political spokespuppet, Jay Nixon), when Illinois has determined your projects cannot be public utilities until sometime down the road after they're built?

Because this finally gets pretty close to the truth... it's not about simply purchasing some land.  It's about Clean Line not being able to use eminent domain to condemn land for its projects in Illinois.  Without eminent domain, Clean Line would have to negotiate with each and every landowner to purchase right of way.  No sweat, Clean Line has been telling the public that it wasn't applying for eminent domain for years and that it planned to negotiate fairly with each and every landowner to secure right of way.  So, what happens now when Clean Line has to actually do it?  It's legal clouds, uncertainty, and doom and gloom for the project.  That's because Clean Line wasn't being honest about eminent domain all along... what Clean Line meant was that it wanted to negotiate fairly with each and every landowners to secure right of way, but only when it was holding the sledgehammer of eminent domain behind its back.  That's not fair negotiation.  That's coercion.  Now all of a sudden, when the sledgehammer isn't a tool, Clean Line can't negotiate at all.  Clean Line only wanted to pretend to negotiate, but what it really wanted to do was threaten landowners with eminent domain condemnation if they didn't agree with Clean Line's terms and price.  The Court called this one spot on!

So, let's look at the last stupid thing Lawlor said...“We’ll see how the decisions play out before we put a lot of people to work building the project.”  What?  You were ready to "put a lot of people to work building the project" before the Illinois Supreme Court ruled?  How were people going to build the Grain Belt Express without state approvals from all affected states?  How were people going to build the Grain Belt Express without rights of way across the route?  Without contracts?  Without financing?  Without money?  Without customers?  Sounds like you were ready to put people to work in the same way you were willing to negotiate fairly with landowners.   As in... not at all.

What a thoughtless and stupid thing to say!

Lawlor also whines about Illinois by saying the same stupid things he said about Missouri:

The ruling, Clean Line director of development Mark Lawlor said last week, would discourage renewable energy development in Illinois.
“It is clearly a setback, and a signal not only to our investors, but to other developers, on the tremendous amount of legal barriers in Illinois,” said Lawlor. “It goes beyond Rock Island. It goes beyond Grain Belt.”

Hey, guess what?  Other developers aren't buying your cries of "wolf, wolf, wooooolffffff!"  If no "clean lines" are ever built in Illinois, it will not affect the development of renewable energy in Illinois, because none of the Clean Line projects were ever proposed to move renewable energy produced in Illinois.  No, they were just one way highways through the state for energy produced in other states, with no on or off ramps for local use.  And people care even less about your investors and their signals.  These filthy rich, silver spoon brats invested in your company with their eyes wide open, and besides, they'll hardly miss the millions they're going to be out when Clean Line folds.  They'll probably just write it off their taxes and push the tax burden off onto working class taxpayers anyhow.

It's probably only a matter of time before the investors buy Mark his own wind farm, like they did for RICL's former development director, Hans Detweiler.  Buh-bye!

Rock Island Clean Line is dead.
Grain Belt Express is dead.
0 Comments

Maryland Sues States for Providing Cheaper Power for Marylanders

10/6/2017

0 Comments

 
No, that's not a riddle.  Maryland really is suing neighboring "upwind" states who foul its air with their fossil fuel burning electric generators.  According to The Baltimore Sun:
The lawsuit seeks to require 36 generating units at 19 plants in upwind states to install the same scrubbers and other air-cleaning technology that Maryland requires plants within its borders to install.
Maryland produces little of the electric energy it consumes.  How little?
Maryland's electricity consumption exceeds its net generation. Almost half of the power consumed in the state comes from the PJM Interconnection, the Mid-Atlantic regional electricity transmission grid.
...according to the U.S. Energy Administration.  Maryland is an energy leech, sucking "dirty" fossil fuel electricity from neighboring states.  And now Maryland is suing those states to demand they clean up their cheap, dirty generators.

Also in the works is the Independence Energy Connection, a set of new transmission lines intended to funnel more dirty Pennsylvania electricity to Maryland.  Grid planner PJM Interconnection says that the project will produce lower electric costs for Marylanders, especially in the Baltimore metro area.

But what if Maryland's lawsuit is successful and those cheap and dirty Pennsylvania generators PJM is counting on are required by court order to install new scrubbers and air cleaners?  The cost of that equipment is going to increase the cost to produce that dirty power to be shipped to Maryland by IEC in the future.  I'm going to make a wild guess here that the increased cost of power produced in Pennsylvania is going to change the projected economics of the IEC significantly, negating any benefit at all.  No benefits, no need to construct IEC.

Maryland has also recently outlawed shale gas fracking.  Maryland doesn't want to compromise its own environment to produce cheap shale gas, but yet it has no problem helping itself to cheap shale gas electricity produced in the fracking state of Pennsylvania.

Maryland, you're a big, fat hypocrite.  How about you stop depending on dirty fossil fuel generators in other states and step up to produce your own clean electricity?  You've got an ocean of offshore wind opportunities just off your shore.  Offshore wind is so clean it produces no emissions at all.  Start walking your talk, Maryland!

But wait, clean electricity is more expensive!  And Maryland doesn't want to pay more for electricity.  It wants to pay less by supporting the construction of new transmission lines from dirty Pennsylvania generators.

You can't have both, Maryland.  What's it going to be?  Cheap electricity?  Or clean air?   Or you could just shut off the lights.
0 Comments

Perhaps the DOE Should Start in its Own Backyard

10/4/2017

2 Comments

 
Rick Perry's Notice of Proposed Rulemaking... oh, the opportunities for blog fodder.  One more post before I stop (for now).

So, Rick Perry thinks that we need to stop the untimely retirement of baseload generation resources, namely coal and nuclear in order to preserve "resiliency."

He could start in his own backyard.

The DOE's "participation" in the Plains & Eastern Clean Line project is supposed to facilitate the development of renewable energy (and therefore the closing of coal-fired generators it would displace), and the DOE's Record of Decision supporting participation in the Plains & Eastern project used this justification for its decision to support the project.
The already-strong demand for imports of low-cost wind energy into the mid-South and Southeast would likely increase if and when states in the region are subject to regulations limiting greenhouse gas emissions from power plants. EPA’s Clean Power Plan, published in October 2015 and scheduled to mandate compliance beginning in 2022, aims to “continue progress already underway in the U.S. to reduce CO2 emissions from the utility power sector” and is part of a suite of air quality improvements sought by other national environmental regulations. These improvements could be accomplished through retrofitting of older generation plants, plant retirements, and an increasing reliance on local or imported low-carbon generation including renewables. The Department’s Energy Information Administration (EIA) estimates that the Clean Power Plan would result in strong growth in renewable generation, particularly in regions currently lacking robust renewable portfolio standards such as the Southeast. Implementation of the Clean Power Plan would also shift the regional fuel mix away from baseload capacity with on-site fuel supplies (such as coal, nuclear, hydroelectricity, and oil) towards capacity that tends to utilize real-time fuel delivery (wind, solar, and natural gas).  Overall, wind generation is projected to play a major role and become increasingly economically competitive. Although the EIA’s analysis did not look at the degree to which such a fuel mix would be imported to the Southeast or conduct a detailed model of the transmission system, it did find that “[c]ompliance with the proposed rule could necessitate significant investment in electric transmission system infrastructure to integrate renewables from remote areas.”

The Clean Power Plan is dead, smothered under its own hubris.  But yet DOE is still puttering merrily down the road supporting the Clean Power Plan through legacy "decisions" made by the previous administration to participate in an impossible transmission project with no customers intended to facilitate renewable competition for baseload generators in the Southeast.
In fact, the DOE was so hung up on facilitating the development of renewable energy, that it illegally added that extra-statutory factor to its RFP for Sec. 1222 projects, and used it a basis for its decision to "participate" in the project.
To be sure, wind power delivered by the Project will compete with other sources of renewable energy in markets in the mid-South and Southeast. But such competition is healthy, and ultimately benefits consumers and the renewable energy sector as a whole. Indeed, new transmission links such as the Project create value through their ability to foster healthy competition among generators. As the Commission has observed: “New interconnections and transmission service generally meet the public interest by increasing power supply options and improving competition.” The Commission has also explained that “as a general matter, the availability of transmission service enhances competition in power markets by increasing power supply options of buyers and sales options of sellers, [resulting in] lower costs to consumers.”
Right.... healthy competition, but renewables wouldn't be the only competitors.  Baseload generation would also be competing against imported renewables, and perhaps that sort of competition could cause the closure of baseload resources in the Southeast.

In addition, DOE's Environmental Impact Statement gushed on and on about the tons of carbon a Clean Line would save from entering the atmosphere.  I don't have the time and patience to dig that up, so you'll have to accept my paraphrasing here.  A "clean" line couldn't remove carbon from the atmosphere by itself, therefore it could only accomplish this through displacement of existing generators that produce carbon.  Therefore, Clean Line is intended as a vehicle to close existing baseload generators that produce carbon.

So, get with the program, Rick!  Instead of trying to put your thumb on the scale at FERC, why not start a little closer to home by extricating the DOE from its "participation" in the Plains & Eastern Clean Line?  It would probably be a whole lot easier to change policy in your own department than it would be to demand an independent regulatory agency act as your minion on some impossible time line.  Clean up DOE's own backyard first!
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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