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"Let this finally be independence day for the affected landowners"

7/5/2017

1 Comment

 
So said the Motion to Dismiss filed by the Missouri Landowners Alliance on July 4, 2017.

After years of battling the Grain Belt Express transmission project proposed to cross the northern half of the state, Missouri law has been made clear by the courts.

A company may not construct an electric transmission line without the permission and approval of the Public Service Commission.  An application to the PSC for an electric transmission line must include:
(D) When approval of the affected govern- mental bodies is required, evidence must be provided as follows:
2. A certified copy of the required approval of other governmental agencies;

If any of the items required under this rule are unavailable at the time the application is filed, they shall be furnished prior to the granting of the authority sought.


And Missouri law requires:
No person or persons, association, companies or corporations shall erect poles for the suspension of electric light, or power wires, or lay and maintain pipes, conductors, mains and conduits for any purpose whatever, through, on, under or across the public roads or highways of any county of this state, without first having obtained the assent of the county commission of such county therefor; and no poles shall be erected or such pipes, conductors, mains and conduits be laid or maintained, except under such reasonable rules and regulations as may be prescribed and promulgated by the county highway engineer, with the approval of the county commission.
This couldn't be clearer!  Grain Belt Express must submit the assents of the County Commissions to the PSC BEFORE the PSC issues approval.  The Western District Court of Appeals confirmed the law, and the Missouri Supreme Court decided not to review that opinion.  Therefore, the law and its interpretation is settled.

But yet Grain Belt Express is so desperate that it has been pretending in the media, and in a Motion for Waiver or Variance of Filing Requirements at the PSC, that there is still some question about the law and its interpretation.  Clean Line is asking the PSC to ignore the law and the courts, and create some new interpretation of the statutes that attempts to circumvent the court's opinion.  Clean Line wants the MO PSC to gladly step in front of a speeding bus in order to save Grain Belt Express to fight another day.

Why would the PSC step up to defy the court and waste its resources when Clean Line refuses to help itself?  Ameren, the company proposing a transmission line that was the subject of the relevant court case, chose to fall on its sword, instead of pushing the PSC to take the heat.  Ameren rerouted its transmission line along existing rights of way with the hope of finally receiving county assent for its project.  Grain Belt Express refuses to abide by the interpretation of Missouri law by the courts, and refuses to secure county assents.  Clean Line believes it does not need no stinkin' county assents and it threatens to litigate any PSC decision that requires it.

Well, good luck there, Clean Line.  Your bravado is laughable.  That's big talk for a company who may not have the financial resources to continue this battle.  Just last month, Clean Line claimed that a prolonged delay in approval by the PSC would serve as a "defacto denial" of its project.

Nevertheless, the PSC issued an Order this morning setting a briefing schedule on this issue, along with oral arguments for those submitting briefs.  The Commission will entertain briefs until July 18, and hear arguments on July 25 at 10:00 am.

Be there or be square!

1 Comment

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

Missouri Supreme Court Dashes Hope for Grain Belt Express

6/29/2017

1 Comment

 
The Missouri Landowners Alliance and Block Grain Belt Express are optimistic that the Public Service Commission must again deny Grain Belt’s application, in the wake of a Missouri Supreme Court decision yesterday. The Court denied a petition to review an opinion of the Western District Court of Appeals regarding county commission assent for new transmission lines to cross local roadways. The case, Neighbors United Against Ameren’s Power Line vs. Public Service Commission of Missouri and Ameren Transmission Company of Illinois, earlier this year vacated a conditional permit for Ameren’s Mark Twain Transmission Project that was issued by the PSC before Ameren had received the assent of counties crossed by the project.

Earlier this month, Grain Belt Express, and other supportive parties, had urged the PSC to issue a decision on its transmission line application after the Commission discussed putting the case on hold until the Ameren matter was cleared up by the courts. Grain Belt Express, like Ameren, has not produced county assents from the eight Missouri counties it proposed to cross. The Court of Appeals made it clear that county assent must be submitted to the PSC before a certificate of convenience and necessity may be issued. Without Supreme Court review, the Appeals Court decision is final.

“We celebrate with Neighbors United for their incredible victory for property rights. We would also like to thank all the County Commissioners who have stood with us in our battle for our way of life and against eminent domain abuse,” commented Jennifer Gatrel, spokesperson for Block Grain Belt Express-Missouri.


The citizens’ groups hope the PSC will now quickly proceed to dispose of the Grain Belt Express matter, allowing the people to resume their work and plans for the future, albeit a little lighter in the pockets than before the threat of Grain Belt Express reared its head. The three landowner’s organizations say they have spent approximately $350,000 altogether defending private property rights from the speculative transmission project.

Russ Pisciotta, President of Block Grain Belt Express-Missouri said, “The people impacted by the proposed line have repeatedly spoken out loudly and clearly against the ill-conceived, unnecessary interstate transmission line and now we are watching democracy in action and the system is working.”

Grain Belt Express had initially obtained assents from all eight counties before notifying landowners about its project, however, Caldwell County’s assent was later overturned in court because it violated the sunshine law. Five of the eight counties have also since rescinded their assents, and county commissions have remained steadfastly on the side of local property owners.


“I am very glad that the Missouri Supreme Court has upheld the Appeals Court Decision. This decision gives the County Commissions in our State the right to guard our communities and way of life,” said Wiley Hibbard, Ralls County Presiding Commissioner.
1 Comment

Missouri Sticks a Fork in Grain Belt Express

6/28/2017

6 Comments

 
Yesterday, the Missouri Supreme Court denied a petition to hear Neighbors United Against Ameren’s Power Line vs. Public Service Commission of Missouri and Ameren Transmission Company of Illinois.  The opinion of the Western District Court of Appeals is now final.
Grain Belt's last great hope in Missouri is dashed.

The company has been trying to convince the MO PSC that the Ameren decision wasn't final or binding while trying to extract a favorable decision to issue a permit without county assent.  Now, that just can't happen.

The controversy:  Missouri law requires a transmission company proposing a new line to acquire the assent of each county commission to cross county roads, and to submit those assents to the PSC before a permit may be issued.  That's the law.  In the case of Ameren's Mark Twain Transmission Project, the company had failed to acquire and submit the required county assents.  But the PSC issued a conditional permit that allowed the company to submit the assents later, before it began construction.  Transmission opposition group Neighbors United challenged the timing of the assents under Missouri law, contending that the assents must be obtained before the PSC can issue a permit.  The Western District Missouri Court of Appeals agreed with Neighbors United, and vacated the permit issued by the PSC.  The PSC and Ameren petitioned the Missouri Supreme Court to hear the case, and yesterday the Supreme Court declined to hear the case.  The opinion of the Western District Court is final.

Grain Belt Express finds itself in the same boat as Ameren.  It does not have all county assents needed for a permit.  Grain Belt Express first suggested that the PSC issue it a conditional permit, just like Ameren's, and it would acquire the assents before construction.  The PSC did not take the suggestion, and put the case on hold pending resolution of the Ameren matter in court.  GBE has also taken the position that its project is somehow different than Ameren's and that it does not need county assent.  It has been met with stony silence from the Commission.  The same arguments were made to the Missouri Supreme Court in the Ameren petition, and the Court didn't take the bait, so obviously those arguments aren't valid.

So, the MO PSC doesn't have a lot of options on Grain Belt Express.  It could issue a conditional permit based on GBE's faulty legal arguments, only to have that permit vacated in another expensive and time consuming court battle, or it could give Grain Belt Express a period of time to produce the county assents, and if they can't, dismiss the application.  Or it could yank off the bandaid and deny or dismiss the application right now.  None of these options are any good for Grain Belt Express. 

It is highly unlikely that GBE can obtain needed county assents, even if given eternity to perform the task.  The battle lines have been drawn and the majority of the county commissions have taken an entrenched position firmly behind their constituents.  Unless the constituents change their minds, the commissions aren't budging.

It's hopeless.

Maybe GBE wishes it had treated affected landowners with more respect.  Maybe GBE wishes it had given a little more deference to the county commissions.  But it was blinded by its own sheer arrogance that the people and local governments of Missouri didn't matter and that GBE could simply use state law and political clout to run right over Missourians. 

Alea iacta est... the die has been cast.
6 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.
3 Comments

Rural America Doesn't Want to Become America's Power Plant

6/26/2017

8 Comments

 
A friend sent me an op ed that cracked the door on a little bit of truth that urban America needs to accept.  Rural America doesn't want to become your power plant.  Donald Trump was in Iowa recently, and issued a Trumpism critical of wind power.  The media jumped on its propaganda pony to point out that Iowa loves wind, and gets 36.6% of its energy from wind.  The story was that Trump was a lone critical voice and that Iowans are happy to reap wind profits and jobs and nobody minds becoming America's power house.  That's just not true, according to the op ed.  There is serious resistance to industrial wind in Iowa and other rural states.  I already know this, but many do not, preferring instead to believe the rosy picture painted by an industry making money hand over fist exploiting rural America.

What's the difference between what happened in West Virginia a hundred years ago and what's happening in the Midwest now?  Not much.  Out-of-state corporations invaded and bought up the land and the people in order to exploit them for corporate gain.  The people were told it was a great opportunity for jobs and tax revenue, and became so dependent on a single industry that they can't survive without it.  Energy became the only game in town, and the politicians and profiteers refused to utter any criticism, despite the reality that it was actually destroying the state.  And then, just like that, energy was no longer sustainable in the state because society had moved on from that particular form of energy.  And the state was left in ruins as the corporations raced on to the next big energy goldmine.  Those who refuse to learn from history are destined to repeat it.

Wind energy relies on tax credits.  The companies who build wind farms are raking in the dough courtesy of the U.S. taxpayer.  When the governmental largess stops, so will the wind farms.  But meanwhile, wind energy companies are desperately, madly, trying to build new tax credit generators while they still can.  And rural America resists.

What was it Donald Trump said?  "I don't want to just hope the wind blows to light up your house and your factory..."  Wind is an intermittent resource.  It doesn't blow constantly at a consistent speed.  If Iowa was 100% dependent on wind energy, homes and factory lights would rise and fall like the wind.  I saw another propaganda blast last week that claimed a European country's train system runs on "100% wind energy."  Untrue.  Electrons are all the same color, whether created by coal or wind, and they're all mixed together when combined on the electric grid.  Otherwise, that train would start and stop, slow down and speed up, based on a gust of wind.  Face it, other forms of energy generation must back up intermittent resources to provide a steady stream of energy.  At some point, wind reaches saturation in a geographic area, and considering that rural America doesn't use a whole lot of power compared to urban America, Iowa may be at its saturation point right now.  But the tax credits are still good for another 3 years, and once a wind farm qualifies, it can draw on that credit for 10 years.  When the last big hurrah of wind gets built in 3 years, and when the 10-year draw of taxpayer profits expires, Iowa is going to be left in a graveyard of broken wind turbines that are too expensive to fix, and without tax credits, it doesn't make sense to replace them.  But the wind industry needs to build NOW, even if Iowa can't use the  power, so the companies want to export it.  And the next thing you know, some cowboy wants to build gigantic transmission lines for export.  While hosting turbines is completely voluntary on the part of the landowner (and some argue that the landowner is paid quite generously for leasing land), cowboy's transmission line wants to use eminent domain to force landowners to host its towers for a pittance.  There's a complete disconnect here -- if wind farms are voluntary, then the infrastructure to enable them should also be voluntary.  But it's not.  And rural America objects to having its productivity and lifestyle sacrificed for benefit of big wind's profits and the environmental dreams of electric consumers in other states.

This article makes a better attempt at balanced coverage.  This is the story that urban America never hears.  And the few who do hear it tell the ones living in wind alley that their criticisms of industrial wind aren't true, or that the should just suck it up, or that criticism of big wind is a sock puppet of the Koch brothers.  As one Iowan commented, you just haven't become effective in your opposition until some arrogant, urban environmentalist accuses you of being funded by the fossil fuel industry.  Nailed it.

Putting aside the politicians and wind farm hosts, and the corporations who fund them with a tiny portion of their profits, all the "support" of big wind comes from urban environmentalists who don't live there.  This is often expressed quite arrogantly by folks who want to save the planet at someone else's expense.  They're condescending, they're blithe, they're arrogant, and they don't want to host energy infrastructure in their own communities.  They're looking for the next patsy, because importing coal-fired power from West Virginia is now just so gauche.  It's not about taking responsibility for their own needs (something rural America is very familiar with), it's about demanding that someone else take responsibility and sacrifice for their needs.  The dictating to rural America about what they must do isn't going over too well.  Rural America isn't some cretinous population easily swayed to paint Tom Sawyer's fence, and they resent being treated as such.  And they will continue to resist urban America until the arrogance stops.  Everybody matters, or nobody matters.  Those who think they're so smart that they can control rural America like a monkey on a leash just can't seem to grasp why they continue to lose.  We must come together on even footing.  If you love wind energy, urban America, put it in your own backyard.  Rural America doesn't want to become your power plant.
8 Comments

Tick Tock, Transource!

6/23/2017

3 Comments

 
PJM Interconnection has set the project alarm clock for transmission company Transource to get its Independence Energy Connection built.  Can the company really get this project permitted and built amidst formidable opposition and beat the clock?
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The DESIGNATED ENTITY AGREEMENT Between PJM Interconnection, L.L.C. And Transource Energy, LLC, for itself and on behalf of Transource Maryland, LLC and Transource Pennsylvania, LLC sets certain milestones the company must meet:
  1. On or before June 1, 2018, Designated Entity must demonstrate that any applications for any
    required state or local certificate(s) of convenience and necessity have been submitted or such certificates have been ruled as not required by the applicable states or local governmental authorities.
  2. On or before December 1, 2019, Designated Entity must demonstrate that all required federal,
    state, county and local site permits have been acquired.
  3. On or before December 1, 2019, Designated
    Entity must demonstrate that all major electrical equipment has been delivered to the project site.
  4. On or before January 31, 2020, Designated Entity must demonstrate that at least 20% of Project site construction is completed.
  5. On or before June 1, 2020, Designated Entity must: (i) demonstrate that the Project is completed in accordance with the Scope of Work in Schedules B of this Agreement; (ii) meets the criteria outlined in Schedule D of this Agreement; and (iii) is under Transmission Provider operational dispatch.
Getting applications filed with state utility commissions is no big deal.  Any transmission monkey can do that.  But acquiring the permits is a different story.  It can take years to successfully acquire permits, in fact, Transource parent company AEP likes to whine about how it took sixteen (16) long years to get one of its multi-state transmission projects approved (when it's convenient to whine about such, of course).  PJM's schedule says the project must be fully permitted a mere two and a half years from now.  If there's anything certain about a regulatory permitting process, it's delay.  Any opposition to a company's application for a permit mucks up the process and causes delay, and it would be rare indeed if Transource's regulatory applications were unopposed.

And here's another goodie -- Transource must purchase and have all major electrical components on site by the permit deadline.  This means that the company must spend money engineering the project and purchasing very expensive components, even before it receives a permit.  What happens if the company spends millions purchasing components for a project that is eventually denied by a public utility commission?  No worries, the company has received a guarantee from the federal government that it may recover the cost of those components from you in your electric bill, even if the project is later abandoned and the components are never used!  Now that's some pretty arrogant assuming -- assuming a permit must be issued because the ratepayers are on the hook to pay for the project, might as well construct it.  And a mere month after receiving its permit, the company must have at least 20% of the project constructed.  And then a mere 6 months later, the project must be completed and delivering energy.  Obviously there's a timing issue here and PJM expects the company to secure its permits well before the December 1, 2019 deadline in the agreement.  If Transource doesn't get its permits until December of 2019 (and remember, it can't build anything or condemn any right of way until it has its permits), there's just no way it can meet the construction deadlines.  Tick tock!

So, what happens if Transource can't meet these milestones?
Designated Entity shall meet the milestone dates set forth in the Development Schedule in Schedule C of this Agreement. Milestone dates set forth in Schedule C only may be extended by Transmission Provider in writing. Failure to meet any of the milestone dates specified in Schedule C, or as extended as described in this Section 4.1.0 or Section 4.3 .0 of this Agreement, shall constitute a Breach of this Agreement. Transmission Provider reasonably may extend any such milestone date, in the event of delays not caused by the Designated Entity that could not be remedied by the Designated Entity through the exercise of due diligence, or if an extension will not delay the Required Project In-Service Date specified in Schedule C of this Agreement;
provided that a corporate officer of the Designated Entity submits a revised Development Schedule containing revised milestones and showing the Project in full operation no later than the Required Project In-Service Date specified in Schedule C of this Agreement.
PJM, the "transmission provider" can extend the milestones as long as such extension doesn't delay the in-service date of the project (the date the project is operational - June 2020).  Failure to meet milestones that are not extended results in breach.
Except as otherwise provided in Article 10, a Breach of this Agreement shall include:

(b) The failure to meet a milestone or milestone date set forth in the Development
Schedule in Schedule C of this Agreement, or as extended in writing as described in Sections
4.1.0 and 4.3.0 of this Agreement;
In the event the breach isn't cured:
In the event that a breaching Party does not cure a Breach in accordance with Section 7.3 of this Agreement, Transmission Provider shall conduct a re-evaluation pursuant to Section 1.5.8(k) of Schedule 6 of the Operating Agreement. If based on such re-evaluation, the Project is retained in the Regional Transmission Expansion Plan and the Designated Entity's designation for the Project also is retained, the Parties shall modify this Agreement, including Schedules, as necessary. In all other events, Designated Entity shall be considered in Default of this Agreement, and this Agreement shall terminate in accordance with Section 8.1 of this Agreement.
So, when Transource fails to meet project milestones, PJM will "re-evaluate" this project and could decide it's no longer needed.  No harm, no foul, no skin off their nose, the ratepayers are on the hook to pay for it whether it's constructed or not.  Just one, big, expensive "oops" by transmission planners who should be held to higher standards.

In fact, PJM can re-evaluate and cancel this project at any time, milestones or no milestones:
In the event that: (i) pursuant to Section 1.5.8(k) of Schedule 6 of the Operating Agreement, Transmission Provider determines to remove the Project from the Regional Transmission Expansion Plan and/or not to retain Designated Entity's status for the Project; (ii) Transmission Provider otherwise determines pursuant to Regional Transmission Expansion Planning Protocol in Schedule 6 of the Operating Agreement that the Project is no longer required to address the specific need for which the Project was included in the Regional Transmission Expansion Plan; or (iii) an event of force majeure, as defined in section 10.0 of this Attachment KK, or other
event outside of the Designated Entity's control that, with the exercise of Reasonable Efforts, Designated Entity cannot alleviate and which prevents the Designated Entity from satisfying its obligations under this Agreement, Transmission Provider may terminate this Agreement by providing written notice of termination to Designated Entity, which shall become effective the later of sixty calendar days after the Designated Entity receives such notice or other such date the FERC establishes for the termination.
 Considering that this is a market efficiency project, chances of it still being needed several years down the road are slim to none.  PJM recognizes any "need" for this project has a very short shelf life, judging by its own project schedule.

A market efficiency project is intended merely to increase transmission capacity to a certain area in order to allow cheaper power to reach the area and lower electricity prices for the lucky recipients.  The cost of a transmission project is assigned to certain areas that use or receive benefit from the project.  More than 80% of the Transource project cost is assigned to electric ratepayers in the Baltimore Gas & Electric, PEPCO, and Dominion service areas.  This includes Baltimore, Washington, DC, and its suburbs, and northern Virginia.  That's who's going to receive more than 80% of the benefit and the cheaper electricity.  This project is nothing more than the idea that cheap gas-fired electric generation in Pennsylvania can be piped to the big eastern cities.  Benefits to the citizens in the bullseye of this project who are expected to play host to new high-voltage transmission lines will be minimal.

The concept of electric transmission "congestion" is a constantly shifting problem.  While Pennsylvanians can currently get plenty of cheap power generated in their state, it bottle necks before it can flow to the eastern cities.  Once the bottle neck is removed, Pennsylvanians must compete with the big cities for the same supply of electricity, which tends to levelize prices between the two areas.  While the price of electricity in the expensive cities may fall, the price of electricity in Pennsylvania may rise.  It's simple supply and demand.  However, electricity generation isn't static -- new generators come online, and old generators go offline.  If the Transource project isn't built, perhaps the big cities will build their own new, cheap gas-fired generators.  The lights won't go out.  How much of PJM's transmission plan is sheer market manipulation that would solve itself without intervention?

The schedule is tight, the stakes are high.  Transource has to beat its early milestones in order to meet its later ones.  Opposition causes delay.  Can Transource beat the clock?  Tick tock.
3 Comments

Potomac Edison Receives Fine for Maryland Meter Reading Failure

6/23/2017

0 Comments

 
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.
0 Comments

Delightfully Serving Master

6/13/2017

6 Comments

 
Remember how "delighted" Michael Skelly was to have Bluescape on board as a new investor in 2015?  I wonder if his delight has turned to horror lately?

The terms of Bluescape's investment were laid out in a regulatory filing Clean Line made to the ICC:
In the transaction, Clean Grid Holdings LLC (“Clean Grid”), a new investor in Clean Line, will be entitled to convert its Preferred Units in Clean Line, which are a convertible preferred security, into common equity interests in Clean Line, with the result that the current majority common equity owner of Clean Line will no longer be the majority common equity owner.

Clean Grid is a wholly owned subsidiary of Bluescape Resources Company LLC (“Bluescape”), a Delaware limited liability holding company. Bluescape is a private investment and operating company with its headquarters located in Dallas, Texas. Bluescape pursues investment opportunities in the oil and gas and power and utilities industries. The Bluescape management team has significant experience in these industries and in making investments and managing assets and companies across the energy sector.

On June 30, 2015, Clean Grid invested $12,000,000 in Clean Line in exchange for 12,000,000 newly issued Preferred Units (comparable to preferred stock in a corporation). In addition, as a result of this investment, Clean Grid is entitled to appoint two directors to Clean Line’s Board of Directors (the “Board”), which has expanded from five members to seven members. After approval of the Oklahoma Corporation Commission (“OCC”), pursuant to Oklahoma law, is obtained for further investment by Clean Grid in Clean Line, (1) the Board can require Clean Grid to make an additional $5,000,000 investment, for a total investment of $17,000,000; and (2) Clean Grid, at its option, will have the right to invest another $33,000,000, for a total investment of $50,000,000.

If Clean Grid exercises its option with respect to the 12,000,000 Preferred Units it already holds, then the common equity interests of Clean Line Investor, LLC, GridAmerica Holdings, Inc., Michael Zilkha, and Clean Line Investment LLC, would decline from 54%, 39%, 2% and 5%, respectively, to 47%, 32%, 2% and 4%, respectively. Clean Line Investor, LLC would then own less than 50% of Clean Line and as a result, would no longer be the majority owner of Clean Line.

The transactions described herein will result in an additional investment of $12,000,000, a subsequent investment of $5,000,000, and potentially an additional investment of $33,000,000, in Clean Line. Clean Line can invest this new capital (potentially up to $50,000,000) in the projects of Clean Line’s subsidiaries, including the Rock Island Project.
It appears that the "additional investment of $33M" is completely at Bluescape's discretion.  So, if Clean Line was running out of cash and needed that $33M, it would be completely at the mercy of Bluescape.  If Bluescape wanted Michael Skelly to tapdance on top of the St. Louis arch dressed up like a hound dog before releasing the additional $33M, I suppose that could happen.
Picture
And if Clean Line seemed to be suddenly budget conscious, there's practically no limit on the things one could imagine the company doing in order to please Bluescape and unlock the cash.

Like suddenly becoming a wind farm company.

Or joining the head of the American Gas Association and 13 other energy industry leaders in writing a letter to Congress that urged lawmakers to fully fund the Department of Energy's Advanced Research Projects Agency.

Or begging the Missouri PSC for a decision on its GBE application, even if that decision is a denial.

Or giving up on the transmission dream in order to follow the whims of an investor with a corporate raider reputation.

Who knows what Clean Line Energy could become?  It may not be delightful for Michael Skelly, but perhaps the fat paychecks will continue for a little while.

Picture
What head scratching act do you think Michael Skelly will perform for Bluescape next?  Is the St. Louis arch really that improbable?  And can he tap dance fast enough to unlock that $33M?
6 Comments

If Grain Belt Express Wants a MO PSC Decision, it has to be a Denial

6/13/2017

1 Comment

 
Remember when GBE's Mark Lawlor told the media that the MO PSC Commissioners "were confused" about the project when they denied its application in 2015?

Now GBE and its allies have again informed the PSC that they got it wrong at a recent Commission agenda meeting when they unanimously decided to put a decision on hold until the matter of Neighbors United v. Ameren is firmly decided by the courts.

Grain Belt Express, MJMEUC, Infinity Wind, and some environmental group all filed whiny, superfluous briefs urging the Commission to issue a decision on Grain Belt Express and repeat the legal mistake they made on the Ameren case.  They rehashed their prior arguments that the GBE case is different than the Ameren case.  Obviously the Commissioners read those arguments the first time and rejected them.  What's changed?  Nothing.  Nothing at all.  They just increased the volume of the whining, made specious claims, and behaved like spoiled brats who can't stand it that they're not getting their way.

The whiners claim that delay will make it impossible for Infinity Wind to claim this year's 80% production tax credit and if it can't qualify, then the price for MJMEUC will go up.  Say what?  MJMEUC signed a contract for wind at a cost that wasn't fixed?  Well, wasn't that poor planning on your part, MJMEUC?  Didn't your momma ever tell you not to count your chickens before they hatched?  And if MJMEUC's cost to purchase wind from Infinity Wind goes up, doesn't that also mean that the claimed "$10M savings" disappears and that the Commission can no longer rely on that to make a decision?  You didn't think this one out too well, did you?

So, let's see... the production tax credit is paid for by U.S. taxpayers.  Infinity Wind claims it will use that credit to sell power to MJMEUC at a low price.  It's not like it's "free"... any PTC not claimed equals a tax break for everyone, including MJMEUC customers.

And maybe I missed something, but I don't remember anything from the evidentiary hearing saying that MJMEUC's contract with Infinity Wind was dependent upon the company scoring an 80% PTC, and that prices would go up if the MO PSC doesn't approve GBE this year.  So, is this claim even true?

GBE also whines that no decision is a "defacto denial" of its application.  Is that sort of like a "pocket approval?"  They both belong in the land of make believe.

The Commission just can't issue an approval of GBE and make it conditional upon future county assent.  The last time they did that with Ameren, the court vacated their approval.  The Commission can't issue an approval and pretend that county assent isn't needed at all.  The court also said that was wrong.  The only thing the Commission can do is delay, or issue a denial.  It seems that GBE is either so arrogantly sure of itself that the only decision can be approval, or they actively want a denial of their application so they can put the project on a shelf and stop wasting cash on it.
Grain Belt Express must invest tens of millions of dollars in engineering, environmental permitting, and easement acquisition to continue to develop the Project. The Company’s ability to make this investment is severely limited by the present state of regulatory uncertainty in Missouri. If the Commission grants a CCN in this proceeding, that uncertainty will disappear and Grain Belt Express will continue to develop the Project. While parties opposed to the Project may appeal such a decision because of the lack of certain county assents, planning for the Project can continue. Because the Company has agreed that the Commission may condition the CCN to provide that Grain Belt Express will not begin construction until it has obtained all Section 229.100 county assents, no party will be prejudiced.

The parties are entitled to receive a decision by the Commission. Whether that decision grants or denies the Application, the parties and the public at large deserve to know whether the Commission believes that Grain Belt Express has met the Tartan criteria, and if it has, what conditions should govern the CCN. Any significant delay in the Commission coming to a decision benefits no one.


It's not true that the Commission can issue a decision on whether or not the project meets the Tartan criteria and either condition it, or ignore completely, county assent.  County assent is the threshold issue, and there's no point in an advisory opinion on Tartan criteria when the threshold has not first been met.  The only thing GBE "deserves" is to have its project denied for failing to acquire county assent.  It's not like GBE is out there pounding the pavement trying to get county assent, which would definitively clear up this matter and allow the Commission to issue a decision on the Tartan factors.  GBE is doing nothing to help itself, instead urging the Commission to commit a legal error and accept responsibility for GBE's failure.

Show Me Concerned Landowners' response succinctly sums it up:
If the Commission desires to rule on this case now, it must reject the Application.
Let's end this debacle now.
1 Comment
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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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