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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.
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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.

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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

Columbia Missouri Should be Renamed NIMBY City

6/13/2017

3 Comments

 
When the irony is so thick you can cut it with a knife...

The City of Columbia, Missouri, made a big announcement earlier this month that it has reached an agreement to purchase wind energy from Kansas, but that the agreement was contingent upon the Missouri Public Service Commission approving a new transmission line cutting clear across the state.
The Columbia City Council approved an agreement with Missouri Joint Municipal Electric Utility Commission to purchase wind energy from Kansas-based Iron Star Wind, LLC during its Monday meeting, but the means of receiving the energy — a transmission line that still needs to be constructed — needs the OK from the Public Service Commission.

The Grain Belt Express project is a 780-mile transmission line that will start in southwestern Kansas and cut through Missouri and Illinois, providing energy to those states and Indiana. The direct-current line will go to Hannibal, where a substation will convert the direct current to alternating current, the type of current used by Columbia’s electric system, said John Conway, chairman of the Water and Light board.

The Grain Belt Express is asking the PSC for eminent domain authority to condemn and take land from resistant landowners in order to build its project.  The proposed route of the project travels through private property, and affected landowners say the lines run too close to homes and schools, and many fear adverse health effects from the electric lines overhead.

The City of Columbia supports the building of Grain Belt Express on rural properties outside of its own borders.

However, the City of Columbia has spent years opposing a new transmission line in its own city because, "the lines ran too close to homes and schools, and many feared adverse health effects from the electric lines overhead."

So, when a transmission project Columbia thinks it needs to fulfill its environmental goals is in someone else's backyard, it's okay to run it close to homes and schools, but don't try that in Columbia's own backyard.  In Columbia, a transmission line is unacceptable.  NIMBY = Not in my backyard.  Don't build a transmission line in Columbia's backyard, build it in someone else's backyard.

Hypocrites.

If Columbians don't want a new transmission line in their backyard, neither does any other Missourian.  You're really not that special, Columbia.  I think I shall rename you NIMBY City.

3 Comments

At Liberty To Pick Your Pocket

6/2/2017

10 Comments

 
Well, here we go again... a transmission company has made an announcement that it will be building 40 miles of new greenfield transmission, but the folks in the bullseye have no idea it's about to happen.  Somehow Transource's press release failed to percolate down to the local media in affected areas.  The local community has not been consulted, but will have this fait accompli dumped on them during a series of "open house" dog & pony shows next week.  See maps of proposed transmission routes at the bottom of this page.  A "greenfield" transmission project is one built across land that currently does not have transmission lines.  Current routes run from Smithsburg, Maryland to a substation east of Letterkenny in Pennsylvania, and from Harford County, MD to York County, PA.

The inaptly named "Independence Energy Connection" pretends it's "critically" needed to "provide millions of customers throughout the Mid-Atlantic access to more affordable power".  This project has been percolating at PJM Interconnection for more than a year, but conveniently waited to get its financial house in order before engaging the community.

How did they get their financial house in order?  They developed the mechanism to get paid for developing it, even if it's never built.  That's right... Transource has received a federal transmission incentive that allows the company to recover every dollar it spends on this project from electric ratepayers in 13 states, even if it is later abandoned and never built.  It also established its rate mechanism, a formula rate, and received other transmission incentives from the Federal Energy Regulatory Commission, including a 50 point increase in its return on equity for being a member of the PJM cartel.  FERC said this project was worthy of so many financial incentives because it was so risky (see paragraphs 21-26).

Transource states that it meets the nexus test because its requested incentives are narrowly tailored to the significant risks and challenges the Project presents. Transource states that it will face considerable risks and challenges in developing and constructing the Project, such as: (1) financial challenges; (2) regulatory and site control challenges; and (3) risks related to the Designated Entity Agreement (DEA) with PJM.

Moreover, Transource states that it will need to work with individual landowners to acquire the necessary land and easements to construct the 42-mile combined route of the two new 230 kV lines. Transource notes that the required easements are expected to cross approximately 300 parcels, including state game lands owned by the Pennsylvania Game Commission. In addition, Transource does not expect that it will be able to use any existing rights of way (ROW). Transource states that Transource Maryland cannot obtain electric utility status under applicable Maryland law, because it does not serve retail customers and thus will not have the authority to use eminent domain to acquire ROW along the approved route. Transource states that this lack of eminent domain authority presents significant additional risk to the Project development schedule.

Furthermore, Transource states that there is a risk for economic projects such as this because PJM could later find, based on changing conditions, that the Project is no longer needed to relieve congestion.
Transource states that this risk is compounded by the long development lead time for the Project.

Other risk factors include the fact that this is the company's first transmission project and it currently has no revenue, that it has to receive numerous permits from federal and state offices, including two state utility commissions, and that its agreement to construct the project with PJM requires it to meet a development schedule with mandatory dated milestones or risk termination.

And still, this company has not even contemplated the public's reaction to its project or the likelihood that serious opposition will develop in affected communities?  Transource doesn't really think it's going to get this project built, does it?  Maybe it's just financially satisfying enough to spend buckets of development cash that can be recovered without ever putting a shovel to the ground?  When all the financial risk of a transmission project becomes the risk of electric ratepayers, it's all gravy!

Transource has requested that it receive a 10.4% base return on equity for its project, and a 60% equity hypothetical capital structure until the project goes into service.  The 50 additional bonus points would be added to that base, to create a 10.9% yearly return on 60% of its capital costs.  The remaining 40% would earn at the cost of debt.  With a total project cost of $197M, that's a lot of gravy for the company's investment.  And where is a new company with no assets and no revenue going to get 60% of $197M to invest in this project?  From its parent companies, that's where.  Transource is a partnership between utility holding company giant American Electric Power and Great Plains Energy.  Neither of these two companies are local, nor do they provide service to, Maryland or Pennsylvania.  Of course, that probably also means they don't have any influence with state and local authorities who must approve their project, so cue the expensive lobbyists and gladhanders.

I certainly hope Transource isn't counting on PJM's "approval" of this project as their golden ticket to getting this thing permitted and built.  Without eminent domain authority in Maryland, Transource is at the complete mercy of the community it's about to invade.  This just can't end well for Transource.  Lots of schmoozing must happen and lots of money is going to have to change hands... and maybe all those costs aren't recoverable from ratepayers. 

Keep your eyes on this, it's going to be a scary ride!
10 Comments

Trump's Infrastructure Plan:  Maybe Not What Clean Line Bargained For

5/24/2017

3 Comments

 
Who hasn't laughed over Michael Skelly's recent news show commentator appearances where he's tried to spin his projects as part of Trump's great (really great, believe me, the greatest of all time, it will be great) infrastructure plan?

Well, laugh some more, little Schadenfreuders,* because not only does Trump's plan not include a project list, it actively neuters Section 1222 of the Energy Policy Act.  For years, Clean Line has used Section 1222 as its trump card (heh, the jokes just won't stop here) to threaten states with losing jurisdiction over its projects if they fail to approve them.  Clean Line even went to far as to go all the way with the DOE on its Plains & Eastern project, spending millions of dollars to secure the "participation" of one of DOE's federal power marketers in that project, with the idea that would allow federal eminent domain authority where Arkansas failed to grant it.

Whoops.  Whoops.  Whoopsie!

Trump's budget includes a plan to sell the transmission assets of three of DOE's federal power marketers, the Bonneville Power Administration, the Western Area Power Administration, and, yes, the Southwestern Power Administration (SWPA). 
Picture
SWPA is the federal power marketer that is supposed to "participate" in the Plains & Eastern project, and use its federal eminent domain authority to condemn and take property in Arkansas for transmission right of way.  In order to do that, SWPA must "own" the right of way and the project assets in Arkansas.

Except Trump wants to sell off all SWPA's transmission assets to private industry.  Setting aside the fact that Clean Line doesn't have the assets to buy its own project back from the government, once they are no longer owned by SWPA, there is no federal condemnation authority!

Section 1222 authorizes:
The Secretary, acting through WAPA or SWPA, or both, may design, develop, construct, operate, maintain, or own, or participate with other entities in designing, developing, constructing, operating, maintaining, or owning, a new electric power transmission facility and related facilities (“Project”) located within any State in which WAPA or SWPA operates...
Without WAPA and SWPA owning transmission facilities, any eminent domain authority the DOE currently thinks Section 1222 authorizes collapses.  Once PMA transmission assets are no longer held by the federal government, federal eminent domain authority ceases.

Is that what you thought being on some fake infrastructure list was going to buy you, Michael Skelly?  Seems to me that Trump's infrastructure plan only further complicates  Plains & Eastern.  Who would want to sign a contract to purchase capacity on a non-existent transmission project that is in danger of being sold to the highest bidder?  Trump's plan to sell PMA transmission assets makes Plains & Eastern more risky and uncertain than ever!

But, the idea to sell PMA transmission is unlikely to happen.  However, it could, hypothetically speaking.  The uncertainty is likely to stall PMA transmission plans for the foreseeable future.  It's not like the idea to divest PMA assets is new.  It's been floated several times in the past and been defeated.  Already, legislators and users of PMA transmission are up in arms about the proposal, and for good reason.  It's a really stupid idea.

But it's Trump's really great idea.  And it's going to cripple any PMA transmission projects for now.

I hope Clean Line didn't actually think getting on a list was going to solve its problems, or else someone is going to be crying himself to sleep tonight.  Boo.  Flipping.  Hoo.

Ding-Dong!  Karma calling!
*Making up new words is really great, believe me!
3 Comments

Iowa Law Prohibits Eminent Domain for Overhead Merchant Transmission Lines

5/19/2017

8 Comments

 
Third time's the charm for Iowans battling the Rock Island Clean Line merchant transmission project.  The Preservation of Rural Iowa Alliance has been working with legislators for the past three years to put meaningful legislation in place that would release them from the threat of eminent domain taking of their property by an overhead merchant transmission project.

PRIA recently announced:
Today is a day to celebrate!! It is a historic day for property rights!

Governor Branstad signed a bill into law forbidding merchant high voltage transmission lines such as RICL from having condemnation power to take private property by eminent domain.  Click here to read Senate File 516:  an Act relating to state and local finances by making appropriations providing for legal and regulatory responsibilities, concerning taxation, and providing for other properly related matters, and including effective date and retroactive applicability provisions.  This bill passed the Iowa House on April 21, 55-39 and the Iowa Senate on April 21, 27-13.  Read the lanquage related to merchant transmission lines beginning on page 18 of the bill.
​
This means that even if RICL decides to try and come back into Iowa they CANNOT take your property by use of eminent domain.  This is a huge win.

A very dedicated and amazing board of directors donated their time, energy and talents to continue this mission for nearly 4 years.
​
Many people across Iowa and outside the state spent endless volunteer hours and contributed money to assist PRIA legislators in making this possible.
​
We need to also remember the leaders in private property rights in other states who provided leadership and guidance as they continue their fight!
The legislation prevents the use of eminent domain for overhead merchant transmission lines in the state of Iowa.  If Clean Line wants to construct its private purpose transmission line across the state, it's going to have to purchase easements in a free market, where the true cost of hosting a ginormous transmission line for the use of other states will be realized.

Third time was not the charm for RICL though.  The company has tried multiple times to get the Iowa Utilities Board to grant it public utility status and eminent domain authority ahead of any actual application for the project.  The IUB stood firm, however, and refused to allow a birfucation of its transmission application process that would coerce landowners to grant easements before the project application was even filed.  RICL tried to do this because filing requirements in Iowa require the company to produce a packet of information at the time of filing for each property it may take via eminent domain.  RICL complained that was too expensive, and too difficult, and wanted eminent domain authority to wield against landowners so that they would grant easements before application, saving RICL the trouble of creating the information packet for the majority of the properties.

Iowans refused to make it that easy for RICL.  They did something amazing instead... they stood together and refused to negotiate easements with RICL.  To stand together against a company waving their checkbook around is something that doesn't happen every time.  Iowans demonstrated the power of community by sticking together.  And they demonstrated backbone by continuing their fight, both at the IUB and in the legislature.  RICL was never about providing electricity to Iowa.  It was a one-way highway to ship electricity out of state for private profit.  That's not something that should be granted eminent domain authority.

And this is precisely the argument heard by the Illinois Supreme Court this week.  Why RICL continued trying to reverse the appeals court's decision to vacate their permit granted by the Illinois Commerce Commission, even after they were shut out of Iowa where their project was planned to begin, is anyone's guess.  Pretty pointless, but so is everything Clean Line does anymore.

A while ago, I compared Clean Line's permitting debacle to a game of whack-a-mole.  Every time the company wacked a mole and received a permit, more moles popped up as impediments to its projects.  And everyone knows how a game of whack-a-mole speeds up at the end, where it's impossible to whack all the moles that pop up, and then you lose.  Clean Line's whack-a-mole game is running double time.  Clean Line was shut out of Iowa before Illinois even heard its appeal.  What now, Clean Line?  What now?  RICL needs to be re-routed to another state, or abandoned altogether.  The project is dead.  Please just admit that.

Congratulations to PRIA and the Iowans who came together and fought so hard to protect their communities from out-of-state profiteers!  They are an example to emulate in other transmission battles.
8 Comments

A Good Day at the Illinois Supreme Court

5/18/2017

5 Comments

 
Landowner opponents of the Rock Island Clean Line transmission project hoped that the Supreme Court oral argument yesterday would be the last they will see of Clean Line Energy Partners.  They could be right.

Clean Line arrived overly confident, conflating the Court's desire to hear the case with a desire to reverse the decision of the Third District Appellate Court.
Hans Detweiler, vice president of Clean Line Energy Partners, Rock Island's Houston-based owner, said he's "encouraged" that Illinois' high court will review the case and hopes it "will recognize that privately funded infrastructure projects" like Rock Island "serve a public purpose."
But softball questions and encouraging smiles were not to be had from the Supreme Court Justices yesterday.  The Justices asked a plethora of questions regarding how RICL could legally be for "public use."

In response they got a whole bunch of complicated explanations on physics, Open Access Transmission Tariffs, and the idea that FERC's rules on a non-discriminatory auction process satisfied Illinois law regarding a utility's non-discriminatory service to the public.  It's quite unfortunate for RICL that they decided the ICC's attorney should go first with his argument that the ICC is entitled to deference in how it interpreted Illinois law.  The Justices didn't seem too interested in that, instead asking Matthew Harvey questions about how RICL could legally be a public utility.  Poor Mr. Harvey... his answers did not satisfy RICL's bevy of attorneys in the first few rows and drew skeptical faces and negative headshakes from them.  I was afraid that if Owen McBride's eyebrows knitted themselves any closer together whether he'd go cross-eyed.  Despite this superior attitude from RICL, I can't say RICL's attorney fared any better before the judges than Mr. Harvey.  RICL's attorney met the justices' questions with complicated circular answers and lots of smoke and mirrors that failed to shed any light on the issue.

When asked by a Justice if RICL's desire to be a public utility was for the sole purpose of acquiring eminent domain authority, RICL's counsel chose to deny it and blame the ICC for telling them they had to be a public utility.  Really, now?  I'm thinking that a straight up admission of how hard it is to build transmission without eminent domain authority would have served them much better than a ridiculous story nobody believed.

The appellees lead off with a strong argument defining "public use" that managed to answer all the Justices' questions that had remained basically unanswered after the appellants had their say.  Matthew Price, representing Com Ed, was positively brilliant compared to the bombastic, uninspired arguments of the ICC and RICL.  He explained public use so simply that it could be understood by anyone.  Public use is a utility's obligation to serve all who want service.  A public utility doesn't get to choose which customers it will serve in order to maximize its profit.  RICL will pick and choose its customers in a way that maximizes its profits.  A public utility must serve everyone, not just allow them to bid for service, or use service available when no one else is using it.

Mr. Price made it clear as a bell.  And the Justices pretty much stopped asking the questions about public use, so I guess their questions were answered by Mr. Price.  It's pretty clear to me that the merchant transmission business model doesn't comport with Illinois law.  Price said something about a FERC-land determination of non-discrimination does not satisfy a determination in the Land of Lincoln.  Right... because FERC is only looking at whether the auction process is fair.  It does not concern itself with whether the merchant transmission company is discriminating against members of the public by only providing service to select customers.  Just because FERC approves it does not mean it comports with Illinois law.

Mr. Price brought up the issue of RICL's refusal to expand capacity on its line if it gets more requests for service than it can provide.  RICL claims it has to stick with the original plan because that's the project in its application.  Maybe it could build another line if it had multiple requests, but why bother with that if it can increase its profits by limiting available capacity? 

Price brought up the idea that RICL could pro-rate its available capacity at the auction, with each bidder receiving a share, instead of trying to maximize its profits by selling only to the highest bidders.  And then the most humorous thing happened... in rebuttal, RICL's counsel decided it could pro-rate its capacity to auction bidders.  I've never heard anything about this from RICL before, and I'm pretty sure it wasn't in their FERC application for negotiated rate authority.  Nor was it in the Order of the ICC granting the CPCN.  So now the Court is supposed to believe RICL has fundamentally altered its auction process on a whim?  Way to admit you're wrong, RICL!

The ILA presented a short, cogent argument about how eminent domain is basically procedural once a CPCN is issued.  And got snotty looks and smirks from the RICL attorneys for their trouble, along with an arrogant rebuttal that attempted to minimize and disparage landowner concerns.  RICL showed the Court that it doesn't give any consideration whatsoever to the landowners it wants to get into perpetual easement partnerships with.

So, now we wait for the Court to issue its opinion.  Some people say that you can tell which way a court is leaning by the questions its judges ask during oral arguments.  Hans Detweiler better not count his chickens before they hatch.  He's no constitutional scholar.  Commerce Clause.  Heh.
5 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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