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Community Participation in Urban Transmission Plans

9/21/2016

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Building new transmission is hard.  Building new transmission in urban areas is really hard.  Building new transmission will always foment opposition of some kind.  When the proposal affects urban areas, opposition will be loud, widespread, and fierce simply due to the number of people affected and the lack of space to construct new infrastructure in an already crowded landscape.

I came across an article recently that provides an opportunity to compare and contrast the actions of two different utilities attempting to build new transmission capacity for short distances in urban areas.

Dominion needs to build new capacity in the City of Alexandria, Virginia.  In preparation, it convened a "resident-led work group" and involved city officials in coming up with a plan that was least objectionable to the city and residents.  By doing this, the affected individuals were allowed to "buy in" to a solution that they felt they had some control over.  By giving the affected community a (real or imagined) voice in selecting a solution, opposition was ameliorated.
“In my view, Dominion looked really hard at the input this community had and listened to us around the table. I’ve served on a lot of task groups in Alexandria, but this is probably the best I ever sat on.”
It probably bears mentioning that the Dominion proposals included underground options.
And Mayor Allison Silberberg touted Dominion’s proposal for the fact that both options keep power lines underground.

“The good news is Dominion put forward two alternatives that are, in the proposal, both shown to be underground in Alexandria,” Silberberg said. “That’s really good, because that has been a top concern. We are awaiting more info from Dominion with regard to the specifics, and then once we get that specific info from them, we will be reconvening the work group, which has been excellent, to go over these considerations and the two options.”
Underground proposals rarely gather the same kind of fierce opposition as overhead proposals.  So, good for you, Dominion, for being flexible enough to compromise in order to realize the goals of the project, and not stubbornly insisting on a configuration the community would reject.

Now, let's compare this to FirstEnergy's current kerfuffle in New Jersey.  FE affiliate Jersey Central Power & Light (JCP&L) wants to build a 10-mile transmission upgrade in urban Monmouth County, NJ.  And they want to do it overhead, along a commuter train right-of-way.  FirstEnergy has not consulted with the community, but is insisting on building the project to its own specifications.  Opposition has been huge, swift, and fierce.  Community opponents number in the thousands.  Legislators have gotten involved.  And opposition to this particular transmission proposal has leaked over into FirstEnergy's proposal for a transmission only utility spin-off in the state.  What a mess FirstEnergy has made of this project and its community goodwill.  There's no going back from this.

By refusing to take community suggestion, and insisting that it cannot bury the project along the train right-of-way (although Dominion seems to be able to do just that in Virginia), FirstEnergy has done nothing but encourage opposition to dig in its heels and spread like wildfire.  The MCRP will never be built as currently envisioned by JCP&L.  FirstEnergy cannot bully or buy its way to community support for MCRP.

It's time for some new thinking at FirstEnergy's transmission headquarters.  In days gone by, it was accepted practice for a transmission utility to simply buy enough community support to get a project approved despite community opposition.  A utility never had to compromise when it could buy enough support to fool regulators and provide "political cover" for elected officials to claim that the community at large supported the proposal.  A utility simply presented its planned project as a fait accompli and ignored any community opposition.  The times, they are a changing.

Dominion has accepted that there is a better way to get transmission built without widespread community opposition that delays projects and increases their cost unnecessarily.  FirstEnergy is still banging its corporate head against a brick wall, refusing to change, and causing delays and unnecessary costs for projects it does manage to get approved through third-party advocacy.

There is a better way.  And it works.  If FirstEnergy wasn't so mismanaged, it would clean house in its transmission department and restock it with folks from Dominion.
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FirstEnergy's Coal Plant Purchase Has Cost You $130 Since 2013

9/20/2016

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That's according to a recent report from the Institute for Energy Economics and Financial Analysis (IEEFA).

Back in 2013, FirstEnergy, parent company of West Virginia distribution electric utilities Mon Power and Potomac Edison, came up with a bright idea to sell the Harrison Power Station to itself in order to raise cash to shore up its sagging balance sheet.  The plant was originally owned by FirstEnergy's competitive electricity supply company, Allegheny Energy Supply.  When owned by Allegheny Energy Supply, the plant was required to cover its own operating costs and make any profits by selling electricity into regional markets at a cost higher than its costs to produce the power.  However, market prices for electricity began falling due to the glut of cheaper gas-fired generators, making it harder and harder for Harrison to compete and turn a profit.  FirstEnergy proposed that Allegheny Energy Supply "sell" the plant to its West Virginia distribution affiliates at a jacked up price.  Once Mon Power and Potomac Edison owned the plant, their ratepayers would cover the cost of operating the plant, with electricity sold to the power market at going rates.  Except the going rate for power not only didn't produce any profit for the company's ratepayers, it didn't even cover its own operating costs.  Therefore, ratepayers of Mon Power and Potomac Edison have been subsidizing the cost of operating the plant at a loss since 2013.  The IEEFA estimates that the bill for ratepayers has climbed to $164 million.  That equals roughly $130 in extra electric bill charges for every customer of Mon Power and Potomac Edison, paid to cover the losses of operating the Harrison Power Station.

The IEEFA calculated the costs by using monthly reports of operating costs and market prices submitted to the Public Service Commission since 2013.  The IEEFA report reveals that the plant has produced a net cost (not benefit) to ratepayers for 28 out of 33 months.  And future prospects for the plant turning a profit remain dim.

FirstEnergy "still believes the plant is still a good deal for customers in West Virginia."
Todd Meyers, a spokesperson for MonPower, responded to questions about the study by saying the company believes the purchase benefits their customers and that it supports coal mining.

“It continues to provide reliable, low-cost power to our customers, and has preserved the opportunity to use more than 5 million tons of West Virginia produced coal annually, supporting hundreds of coal miners with solid, family-sustaining wages,” he said.
No word on whether Meyers still believes in Santa Claus, the Easter Bunny, and the Tooth Fairy as well, but I recently bumped into a leprechaun riding a unicorn and he told me that he does.

What are customers of Mon Power and Potomac Edison paying for?  Are they paying for the electricity they use, or are they paying to subsidize the coal industry?  Or are they instead simply subsidizing FirstEnergy's quarterly dividends paid to shareholders?

And guess what?  FirstEnergy has recently proposed selling ANOTHER of its competitive coal plants to Mon Power and Potomac Edison, citing the "model" of Harrison as the basis for another "good deal for customers in West Virginia."  We can't afford another one of FirstEnergy's "good deals!"

Heads up, West Virginians, we're going to need all hands on deck to stop this one!
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How Many Clean Line Supporters Are Actually Dead?

9/18/2016

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The Consumer Energy Alliance recently got caught sending fake letters of support for a pipeline project to the Federal Energy Regulatory Commission.  One of the letter writers has been dead since 1998.

Hmm... Consumer Energy Alliance.... where have we heard that name before?  I know!  The Consumer Energy Alliance was behind the "EDJ Alliance" that was used in a lame attempt to drum up support for Clean Line's Plains and Eastern project in Oklahoma, Arkansas and Tennessee last year.  Since then, it has been suspiciously quiet... almost like it is dead itself.  And the Consumer Energy Alliance also pretended to speak in favor of Clean Line's Rock Island project at an Illinois Commerce Commission public hearing in 2013.  Clean Line is a "member" of the Consumer Energy Alliance, although it (along with all the other "members") aren't "consumers" at all.  The CEA represents "consumers" in name only, while it really represents the interests of its paying industry members.  That's what's called a "front group."
A front group is an organization that purports to represent one agenda while in reality it serves some other party or interest whose sponsorship is hidden or rarely mentioned.
In the recent pipeline case, attorneys for opposition groups have asked the U.S. Postal Service to investigate the CEA for mail fraud, since it stupidly mailed its fake support letters to the Federal Energy Regulatory Commission to be placed on the pipeline docket.  The attorneys have also asked FERC to
...immediately convene an independent audit of all public comment statements submitted to docket of Case No. CP16-22 since the opening of the comment period for the Draft Environmental Impact Statement; that the Commission strike Intervenors’ Exhibits A through O from the docket and grant leave to any intervenors to this proceeding to submit
further pleadings relating to striking other public comment statements from the docket; finally, that the Commission make a referral to its Division of Investigations, the U.S. Department of Energy Office of Inspector-General, the U.S. Environmental Protection Agency Office of Inspector-General, and the U.S. Postal Inspection Service.
The opposition groups claim "someone appears to have undertaken widespread criminal fraud to influence the outcome of this federal pipeline certificate proceeding." And have produced evidence that at least 15 of the letters submitted to FERC by the CEA were done so without the knowledge or permission of the purported authors.

The CEA answered the opposition complaint, requesting "... that the Commission decline to address Neighbors’ protest (the “Protest”) as its contentions are false and have no merit."  CEA goes on to claim that it has records to prove that the authors of the letters gave permission to CEA to create and mail the letters to FERC.  The authors claim otherwise in numerous affidavits.  In one instance, the author has been dead since 1998.  In another, a relative of an author claims she could not give permission because she has dementia.  Another author  interviewed by Newsnet5 said, "I’ve never said none of those words. I don’t have a typewriter, I don’t have a computer to make a letter as such.”

Here's how CEA explained this "misunderstanding."

As an energy consumer advocacy organization, CEA has developed a process of gathering grassroots support for affordable, reliable energy projects. As part of that widely accepted business process, CEA conducts automated telephone surveys with selected individuals. When an automated call is placed, and consistent with accepted industry practice, the call is directed to the individual listed in phone company records. The individual who participates in the survey is asked a series of questions from a scripted questionnaire to which he or she is requested to answer by pressing on the phone’s keyboard “1” for “yes” and “2” for “no”. But, it is the nature of automated surveys that the questions are not asked by a live person and there is no process to identify and confirm who answers the phone and responds to the question.

The survey used here began with an introductory statement telling the respondent that the Commission is considering whether or not to grant a permit to build the NEXUS pipeline and explaining the benefits of the pipeline, including creation of jobs in the region and reduction of energy costs for manufacturers and consumers. The survey continued with the express question on whether or not the respondent would give his or her permission to relay to the Commission his support for the pipeline. If the respondent replied with “no”, the survey would ask another question reiterating the importance of the Project and again ask the respondent if he or she would support the pipeline and authorize CEA to pass that view on to the Commission. On behalf of those respondents who indicated their support for the project and authorized CEA to forward that viewpoint to the Commission, CEA then generated the letter for the 347 individuals that were filed.

Moreover, it is implicit in the nature of any automated phone survey that from time to time there will be instances where the person who answers the phone and responds to the survey is not the person listed in the telephone company’s records as the householder. This would explain the inadvertent error that can occur when a supporting letter is generated in the name of the person listed as householder, but someone else actually answers the phone. So, even though the householder – in whose name the support letter was generated – may not be competent or even in agreement, the person who answered did respond affirmatively and authorize support for the Project. Similarly, in some instances the respondent may not fully understand the presented question, unintentionally answer it in the wrong way and later change his or her mind. Or, in some cases, the respondent may forget that the survey even took place, let alone that he or she gave the authorization for his comments to be filed with the Commission. CEA regrets any such misunderstanding or miscommunication that may have occurred.
So, CEA robocalls people and asks them to push a number on their phone and that constitutes permission to create and mail a letter in their name to the federal government?  One news account says that CEA robocalled 25,000 households, and from that it found only 347 people supposedly gullible enough to push the right button to give permission?  And even then, many deny ever getting the phone call in the first place.

I guess we can assume that the other 24,653 people contacted by the CEA did NOT support the pipeline, although CEA didn't bother generating a letter from those consumers expressing their opposition to the project.

CEA doesn't represent consumers.  CEA represents its paying industry members.  One of those members is Clean Line Energy Partners.

So, if you're a live person in relatively good health, you'd better get your comments opposing the various Clean Line projects filed with regulators now.  Otherwise, the CEA may submit comments supporting Clean Line to regulators using your name. 

What a bunch of dirty, cheating tricksters!
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How to Disrespect the Court, by Clean Line

9/8/2016

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If Clean Line wrote a guide to disrespecting the courts, it would probably sound a lot like this.

It's no surprise that Clean Line doesn't agree with the decision of the Illinois Third District Court of Appeals that voided the permit for its Rock Island Clean Line (RICL) project issued by the Illinois Commerce Commission.  What is sort of surprising is that RICL has taken to the media to appeal the appeal in the court of public opinion.  It's also surprising that Clean Line whined to a different Appeals Court hearing the appeal of the ICC's grant of a permit to the Grain Belt Express project, suggesting that the court should not rely on the Third District's Opinion, but allow arguments on its merit.  Since when is an appeals court the proper venue to appeal the decision of a different appeals court?

The Opinion of the Third District Court of Appeals is the rule of law unless and until the Illinois Supreme Court takes the case and issues its own opinion overturning the lower court.  The Illinois Supreme Court takes very few cases, saving its review for cases of great importance to the state, cases that disagree with prior Supreme Court rulings, and cases where a conflict has arisen between the opinions of different appellate courts. 

It doesn't matter what RICL's counsel thinks, what the ICC thinks, what the labor unions think, what the media reports, or what a smarmy RICL lobbyist pretending he's a lawyer spews to a reporter.  The only thing that matters is the opinion of the Third District, and that Opinion reversed the Order of the Illinois Commerce Commission that granted a certificate of public convenience and necessity and ordered the Illinois Commerce Commission to enter an Order consistent with the Court's decision.  It no longer matters what the ICC did in 2014.
Detweiler said the ruling ignores that the project would lower electricity prices for Illinois consumers as more power would be made available in the market. The new line would be designed to move up to 4,000 megawatts, enough to power 1.4 million homes.
There's no proof that the project would lower electricity prices for Illinois consumers.  No Illinois consumers have signed up for service on the project (and may never do so).  In fact, it's possible that all the power may be purchased by utilities in those mysterious "states farther east" resulting in not one electron being used by any person in Illinois.  Simply dumping power into an existing market doesn't necessarily lower prices if it creates an expanded market that encourages higher priced markets to begin to compete for available supply.
It's different than most high-voltage lines in that its developers aren't asking regulators to force captive ratepayers to pay higher electricity rates to finance the project. Instead, Rock Island is a "merchant" line and will be a success only if it signs up enough wind farm developers to pay it to move their output from low-population parts of the Dakotas, Minnesota, Kansas and Iowa to population centers like Chicago and the mid-Atlantic.
What makes RICL different is that it skipped the regional planning process whereby lines are found needed and the costs of building them are assigned to consumers who will benefit.  Being a "merchant" project doesn't make a project more consumer-friendly.  It just means that there is NO reliability, economic or public policy need for the project.  It is not needed to keep the lights on, make power cheaper, or meet state renewable energy laws.  Instead, it's a completely extraneous project built on the premise that voluntary customers may want to pay for it.  Therefore it is not a public utility worthy of wielding eminent domain over private property "for public use."  RICL has no customers who want to pay for its project.  The ICC's now voided approval depended entirely on hypotheticals -- something RICL would accomplish later to be granted a permit now.  RICL wants to be a utility now, although it will only legally become one later.  Chicken.  Egg.
The decision doesn't pass constitutional muster, [Detweiler] said.

"It's a terrible precedent—not just for us but any nonincumbent," Hans Detweiler, Rock Island vice president of development, said of the decision in an interview.

He argued that the logic of the ruling is that only established utilities like ComEd and Ameren Illinois can win approval for transmission lines. That undermines competition, he said.
Picture
I must have missed the article about Hans Detweiler being a constitutional law scholar.  I think he should go back to law school and brush up on this, and perhaps take a course in logic while he's at it.  Then he can do a couple internships at regional transmission planning organizations, where nonincumbents compete to build needed transmission all the time.  Let's face it... Clean Line's projects are nothing but pure market speculation that may never serve any person in Illinois.  In fact, they may never serve any customer, any where, at any time.  Certainly that kind of market speculation is not "for public use," it's for private profit, and not worthy of a utility's eminent domain authority.

The chances that the Illinois Supreme Court will decide to take up RICL's appeal of the Third District's decision are slim.  No matter what RICL wants to pretend for the media, the courts have spoken.  No media spree can change that.
2 Comments

Clean Line Can Eradicate the Zika Virus, and Other Ridiculously Desperate Claims

9/6/2016

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While others were enjoying their pre-holiday week, Clean Line and its sycophants were busy embarrassing themselves in a most ridiculous way.

The Tennessee Valley Authority's Board holds periodic public "listening" sessions, where folks can sign up to say any old thing, as long as it fits into a three minute time slot.  I've watched these before, and the most fun part is guessing what speakers in the queue might talk about based on the bottom half of their outfits and any props they have in their hands.  The same parade of environmental group representatives come back again and again, saying basically the same thing.  This appears to go on for hours.  The Board sits stoically, stone-faced and unresponsive, perhaps playing the same mental guessing game I do.  Wow, what a great party!  Or maybe just a colossal waste of time.  Certainly nothing newsworthy, since none of these comments are ever acted upon, it's all just so much posturing.

I guess the Southern Alliance for Clean Energy wanted to spice up its continual posturing last month when its Director told the Board that taking private property through eminent domain to build a $3B electric transmission "clean line" would eradicate the threat of the Zika virus.  No, really.
 The United States issued the first domestic infectious disease travel advisory since the 1950’s earlier this month for Florida over the spread of Zika virus. This is an historic advisory. (The FDA is now expanding the testing of blood for Zika in the United States.) SACE has a pregnant staff member in south Florida who is now effectively in a state of house arrest because of this vector borne tropical disease outbreak.
Clean Line can also make summer not so hot, and stop flooding.  Who is this guy kidding?  He's got nothing to back up his ridiculous claims that a "clean" line is "an historic opportunity of national significance."

The only thing historic about this is the amount of private investor cash that's been dumped into a company that will never realize one dime of revenue.  Or perhaps federal government overreach to effect private property takings outside its statutory authority.  Or both.

And then Dr. Doomsayer let the TVA Board know how economic a "clean" line would be with a bunch of armchair energy planning "analysis."  Such as:
The low cost wind coupled with the concurrent transmission revenue that TVA will likely receive for wheeling the wind power to other recipients makes the deal more competitive for TVA consumers, even if your demand is low, by displacing higher cost fossil fuels.

We believe Clean Line is “in the money” or very close.

What?  What money?  What qualifications does SACE have to analyze the economic competitiveness of a merchant transmission line, and moreover, why should the TVA Board rely on SACE's amateur analysis?  I'm pretty sure the TVA has a whole staff of its own economic experts to study a "clean" line and whether it's "in the money."
Not to be outdone, the Clean Line puppet master also made an appearance with some spurious claims of his own.
Jimmy Glotfelty, executive vice president for Clean Line Energy Partners, told the TVA board last week that it could deliver wind-generated power from Oklahoma and Texas up to 60 percent of the time at around 3 to 3.5 cents per kilowatt-hour, which is cheaper than some of TVA's other energy costs. Such wind-generated power could be available in two to three years after new wind turbines are erected in Oklahoma and Texas, where the wind blows more steadily than in the Southeast, and after Clean Line builds its proposed 700-mile line from the panhandle of Texas to Memphis.

The cost will be cheaper this year because the maximum federal production tax credits, worth the equivalent of 2.2 cents per kilowatt-hour, will begin to decrease after Jan. 1.

Delivered for 3.5 cents?  If the delivery costs 3.5 cents, what does the energy cost?  Since Clean Line doesn't own any wind generation and does not sell energy, the only costs it can quote are for transmission capacity on its own proposed line.

And who does Jimmy think pays for all those delicious federal tax credits that would make energy so cheap for TVA?  The taxpayers.  So while Jimmy is telling TVA it would get a 2.2 cent break on every kWh if it signs up for transmission capacity before the end of the year, the energy consumers in TVA would also have a part in paying for that tax credit!  Maybe Jimmy really believes the federal wind production tax credit is free money that falls from the sky?  Except the tax credit isn't available to transmission companies, only generators.  Where are the generators for TVA to ink a deal with, if it was even possible to do so by December 31?  Jimmy sounds like a carnie, urging his mark to put their money down and spin the wheel at a shady joint.

And why is Jimmy continuing to beat this dead horse anyhow?  It's not going to get up and pull his wagon.
TVA President Bill Johnson said no decision has yet been made about Clean Line or any other proposal. He said TVA could move ahead "if it makes sense under our timetable, not someone else's timetable.

"We've been in long-range discussions with them (Clean Line Energy) under several memoranda of understanding," Johnson said. "Our objective here is quite simple: to have the least cost, cleanest, most reliable system all at the same time. If it turns out that Clean Line is a part of that, then we will do that. But we are still in the evaluation phase."

Jimmy says:
"We continue to to have strong discussion with utilities in the Southeast and we continue to have productive talks with TVA because we believe this is a very competitive source of clean energy which we think would add value to their portfolio," Glotfelty said.
Well, shoot, Jimmy, if your discussions with other utilities are so "strong," why don't you just sign contracts with them instead of engaging in Kabuki theater at TVA board meetings?

Where are the customers, Jimmy?  Having trouble "selling" a hypothetical transmission line fed by hypothetical generators with a hypothetical "approval" to utilities who expect the resources they contract for will be available when needed?

Chicken.  Egg.  Chicken?  Where have all Clean Line's chickens gone?
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Refocusing Eminent Domain Authority

8/26/2016

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The country is on fire over eminent domain.  And it's because for-profit companies posing as "public service" utilities are abusing what we have come to accept as a utility's traditional ability to use eminent domain to serve its customers.

In the traditional sense, public utilities have exercised eminent domain to electrify or otherwise power our country.  The property taken was used to provide basic service to the utility's customers.  Everyone has electricity.  Hallejuah!

But, over time, as utilities got built out to serve everyone, eminent domain was no longer needed for that purpose.  Then utilities used it to enhance their systems and make them more reliable.

And then the slippery slope started.

Utilities expanded their systems in order to wheel power over larger areas and interconnect with other utilities.  The idea now is that all power produced must be available for use by anyone... anywhere.  This is no longer about reliability, but about economics.  Eminent domain is now routinely used to build transmission intended to ship "cheaper" power to customers near expensive sources of generation.  Some transmission is even built to ship "greener" power to customers who haven't built their own "greener" generators.  Regulators may believe that if the cost of building transmission is less than the anticipated savings, then it's in the public interest.

But the public isn't benefiting equally.  Transmission may only reduce prices for one specific geographic area, although the actual line and property taken via eminent domain is routed through a different geographic area that receives no benefit.  Regulators tie themselves up in knots in order to create trumped up "benefits" for affected regions, although the benefits are never spread equally.

The country exploded in the wake of the Supreme Court's ruling on Kelo v. New London.  In that case, the City was permitted to use eminent domain to take property for "economic development" purposes.  Essentially, if private property could generate more tax revenue and job opportunities if owned by someone else, then that was reason enough for the taking.  Nobody liked it.  It was in the news for a long time.  Much was written about it.  Many states reacted by revising their eminent domain statutes to protect their citizens.  Even now, just about everyone agrees that economic development isn't reason enough for eminent domain.  Everyone's house would provide more jobs and tax revenue if it was a Walmart.  It affects us all.

A new assault has begun.  Corporations posing as "public service" utilities want to use eminent domain to build pipelines, transmission lines, and other "public utility" infrastructure that actually serves only their bottom line.  It's not about serving "the public" when the pretend utility doesn't even have any customers.  Instead of presenting their "line to nowhere" as the economic development project it truly is, these shysters pretend it's a "public service" utility in the hope of fooling regulators to grant it a utility's eminent domain authority.

Let's take the Dakota Access Pipeline, for example, since it's in the news so much (well, at least the non-mainstream news).
In fact, very much like what happened in Nebraska, the resistance in Iowa against the Dakota Access pipeline is led by ranchers furious at what they see as the state's complicity in a private land-grab. Earlier this week, a judge denied a stay on construction of the pipeline, kicking the decision over to the Iowa utility board. The plaintiffs in that case accused Energy Partners of blackjacking them into granting easements by threatening to have their land condemned, a charge that the company's lawyers denied, but one that is more than familiar to the people in Nebraska who fought TransCanada.

"This has been the slow erosion of property rights," said Kleeb. "This is the only way that pipelines will be stopped. Construction companies will find ways to get around permits and other obstacles. That has to be brought through the courts."

There are other problems as well. On Wednesday, The Des Moines Register ran a story in which farmers who were paid to allow an easement through their property along the pipeline's route in Iowa complained that the pipeline company had reneged on promises to restore the land once the pipeline got buried.

Instead, he's got a scar running across his soybean fields where the dark, fertile topsoil is being stacked on top of several feet of hard clay mixed with clay loam. The result, Goebel fears, will be soil less suited for growing crops—and much less valuable.

"Nature separated those soils for a reason, that's the way I feel," said Goebel, who runs a 164-acre century farm in Sioux County. "If nature put it there, they should put it back the way it was." His complaint is one of several popping up across Iowa as work ramps up on the pipeline that will stretch from the Bakken oil fields in North Dakota across Iowa to Patoka, IIl."

A pipeline meant to carry Bakken oil from North Dakota to Illinois doesn't have any benefit for the flyover state of Iowa.  All the benefit goes to the corporations.  But Iowans are facing eminent domain for benefit of for-profit corporations who may contribute to "the public benefit" somewhere down the line.  Certainly no one is going to pull their truck up to the processing facility in Illinois and say "fill 'er up with regular."  It's a straight up private to private transfer of a commodity that can't serve the public in its present state.  For their trouble, Iowans are being pelted with economic development arguments... the project will bring jobs and taxes if built.  Isn't that the same argument the City of New London made?  And haven't we generally rejected the argument that economic development is reason enough for eminent domain?  Dakota Access is an economic development scheme masquerading as a "public utility" in order to utilize the eminent domain it would not be awarded as an economic development, private to private transfer, project.

Likewise Clean Line Energy Partners and its many electric transmission projects.  Clean Line wants eminent domain authority so it can effect the transfer of electricity between private parties.  None of the electricity produced by privately-owned generators will be directly available for purchase by "the public."  And Clean Line also attempts to justify its projects with claims of "economic development" jobs and tax arguments.  Clean Line is nothing more than a profit-making scheme.  Clean Line has no "public utility" customers.  The projects are not needed for grid reliability.  They're nothing more than a private road between generators and hypothetical "customers" who have yet to develop.  Clean Line is another economic development, private to private transfer, project.  It's not a public utility serving "the public."

It's high time we start looking at these for-profit "utility" companies under the eminent domain for economic development lens created by Kelo v. City of New London, instead of the needed public utility infrastructure lens of traditional utility eminent domain for public service.  Projects like this serve no one except their corporate owners.
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You Can't Trust a Utility CEO

8/18/2016

1 Comment

 
U.S. Attorney Josh Minkler said:
“CEOs hold positions of special trust and authority, not only in the companies they serve but as leaders in society. We expect them to act with integrity,” Minkler said in a press release. “Exploiting that special trust for personal gain is an egregious crime, especially when those defrauded are friends and neighbors in a community that the CEO was hired to serve.
While I can agree with his sentiment on the egregious nature of the crime committed, I just can't believe that utility CEOs should ever be trusted.  I don't expect them to act with integrity.  I expect them to do whatever they want in pursuit of the almighty dollar, and if that action was somehow illegal or shady, to cover it up.  I'm so not surprised by what Donnis Mizelle did.

Mizelle, once the CEO of an Indiana electric cooperative, has agreed to plead guilty to fraud after an investigation revealed he had collected over half a million bucks in personal expenses from the cooperative since 2009, while claiming they were "business expenses."
Mizelle allegedly siphoned funds from the company’s expense account for his own personal use on a routine basis, according to Minkler.

As CEO, Mizelle was permitted to seek reimbursement for legitimate business expenses. Since at least 2009, however, Mizelle submitted dozens of fraudulent expense reports that disguised personal expenses as business expenses, Minkler said.

For instance, on an April 2009 expense report, Mizelle claimed approximately $650 for business entertainment. According to the federal charges, however, he actually bought a black sapphire bracelet and Mont Blanc pen from a local jewelry store for his own use.

On an October 2014 expense report, Mizelle claimed $1,250 for sponsoring a business-related dinner event. According to the charges, Mizelle had actually purchased a Eurail train pass for a family vacation in Europe.  

His fraudulent claims allegedly resulted in reimbursement checks not only for personal vacations and jewelry, but also for iPhones and iPads, tickets to sporting events, clothing, meals, and even groceries.

No amount was too small. According to the charges, in January 2012 Mizelle claimed $20 for a business lunch that actually went toward the purchase of a pizza delivery to his home.

Does this shock you? 

Do you know what the CEO of your electric utility, cooperative or municipally-run electric supplier claimed on his or her expense reports last year?  Probably not.

What if your CEO also bought a black sapphire bracelet,  but then presented it to a business associate as a trinket of company appreciation?  Would it then be a business expense?  What if your CEO joined an exclusive social club, and then invited business associates there for "meetings?"  Would that membership then be a business expense?  What if your CEO had a clause in his employment contract that allowed him and his family to use the corporate jet for personal travel?  Would that still be a business expense?  It's all in how you package it.  I guess Mizelle wasn't very good at the "ratepayers pay for everything" game.

The article doesn't explain how Mizelle's issues came to light.  How did a cooperative accountant continue to process these "business expenses" month after month for at least 6 years and never once think something was amiss?

If you think you're safe because regulators or "the government" is watching out for you, you're just kidding yourself.  CEO excess is the rule, rather than the exception.   Shame on Mizelle... for getting caught.
1 Comment

Full Steam Ahead for the Clean Line Crazy Train

8/16/2016

8 Comments

 
So, this happened yesterday.
Two groups representing landowners are suing to block an electric transmission line planned for delivering wind-generated power across Arkansas from Oklahoma to Tennessee.

The federal lawsuit, filed Monday in U.S. District Court in Jonesboro by Golden Bridge LLC and Downwind LLC, the two landowner organizations, will test the legality of a decision by the U.S. Department of Energy to aid construction of the Plains & Eastern Clean Line through provisions of the Energy Policy Act of 2005.

The landowner groups are represented by Christopher L. Travis and Jordan P. Wimpy, both of the Gill Ragon Owen firm in Little Rock. The complaint lists as defendants the Energy Department and Ernest Moniz, the U.S. secretary of energy, as well as the Southwestern Power Administration and its administrator, Scott Carpenter.

The lawsuit questions the Energy Department's authority to approve the construction of one of the nation's largest electric lines without seeking state-level review. It also challenges its power to exercise the federal right of eminent domain to condemn and acquire private property under the Energy Policy Act. Landowners, it says, should have played a bigger role in the Energy Department's review of the project, which is being carried out by Clean Line Energy Partners of Houston.

You can read the lawsuit here.
In response, Clean Line says:
CLEAN LINE OFFICIALS SAY ‘FULL STEAM AHEAD’

Late Monday evening, Clean Line officials said they had not seen the legal complaint against the DOE regarding their project and would not be able to provide specific comment. However, a Clean Line executive reiterated the company’s ongoing refrain that the Houston-based venture group has already invested nearly $100 million of private capital to develop the project and anticipates making more than $30 million in payments to Arkansas landowners for easements and upfront transmission structure payments.

In addition, Clean Line will pay Arkansas counties that host the electric transmission project a total of approximately $140 million in voluntary payments over the first 40 years of operation, which will support local schools, fire departments and other community services.

“It’s no secret that the United States suffers from an infrastructure deficit and that we must push through gridlock to move the country forward. Unfortunately,
it is not uncommon to see legal complaints filed against the most important infrastructure projects,” said Mario Hurtado, Clean Line’s executive vice president of development. “In order to modernize the grid, enable the delivery of low-cost energy, create new jobs and enhance our energy security, the private and public sectors must come together to bring new infrastructure projects to fruition.”

Hurtado, who recently told Talk Business & Politics that the multibillion dollar project is expected to get underway in early 2017, added: “The Plains & Eastern Clean Line is the largest clean energy transmission project in America and is moving full steam ahead.”
"The Plains & Eastern Clean Line is a pro-jobs, pro-consumer, pro-environment public energy infrastructure project," said Mario Hurtado, executive vice president for development.
One person conditioned to rule and control
The media sells it and you live the role

Mental wounds still screaming
Driving me insane
I'm goin' off the rails on a crazy train
I'm goin' off the rails on a crazy train

I know that things are going wrong for me
You gotta listen to my words, yeah, yeah

Full steam ahead?  Did you call up Ernie on your special "Coordination Committee" Hotline last night to get that comment approved, Mario?  Because Clean Line can't drive this train all by itself.
DOE executed the Participation Agreement, which creates a "Coordination Committee," which "shall be composed of two (2) representatives from Holdings and two (2)
representatives from DOE." One of Holdings' representatives is the chair of the Coordination Committee. Unless Clean Line has defaulted, the Coordination Committee requires a representative of both Holding and DOE to have a quorum. The Coordination Committee can only make "public announcements relating to DOE's involvement in the Project" if such public disclosure is approved by "one (1)
representative of each of Holdings and DOE on the Coordination Committee.
"
But Mario made a comment anyhow, so let's see what desperation looks like.

"...a Clean Line executive reiterated the company’s ongoing refrain that the Houston-based venture group has already invested nearly $100 million of private capital to develop the project..."

Since the complaint specifically states that DOE "violated Plaintiffs' and the public's due process rights," are you saying that your investors $100 million is more important than due process rights?  It sure sounds like it.  In fact, it sounds like you think rich people are more entitled to get a return on their investment than regular people are to the right to due process under the law.  That's pretty disgusting.  And un-American.

Your blather about jobs and taxes also doesn't dispense with the people's right to due process.  Are you saying that you can break the law as long as you create a few jobs and pay some taxes?  And another thing... jobs and taxes are not a basis for eminent domain.  If that were the case, I'm sure YOUR house would provide more jobs and pay more taxes if it were a Walmart.  How would you like that, Mario?

“It’s no secret that the United States suffers from an infrastructure deficit..."  What?  What infrastructure deficit?  I haven't seen any identified infrastructure deficit that requires thousands of miles of HVDC transmission to be solved.  Sounds like you're making crap up.  In fact, plenty of infrastructure is being built.  It's just not infrastructure that puts a buck in Mario's pocket.  Clean Line is not the be all and end all for keeping the lights on.  It's not part of any grid plan.

"...it is not uncommon to see legal complaints filed against the most important infrastructure projects..."  No, it's just common to see them filed against destructive and unnecessary projects.  A legal complaint does not make an infrastructure project "important" any more than being charged with a crime makes the crime "important."  I guess Mario thinks this legal complaint makes him and his project "important."  *sigh*

“In order to modernize the grid, enable the delivery of low-cost energy, create new jobs and enhance our energy security, the private and public sectors must come together to bring new infrastructure projects to fruition.”  Clean Line isn't "modernizing the grid."  Clean Line is creating a separate grid operated solely for corporate profit  that only serves people who can afford to pay for it.  As well, Clean Line cannot guarantee "low cost energy."  Clean Line has no role in the price of energy that could be transmitted over its line, and none of the proposed generators currently exist.  You cannot price a commodity that doesn't exist and that you do not control.  Enhance our energy security?  What kind of jargon is that?  Did Mario think that sounded good?  How would a 700 mile transmission line "enhance energy security?"  The most secure energy system is one where generation and load are located at the same place.  A transmission line adds insecurity to that system because it's just one more piece that may fail.

"The Plains & Eastern Clean Line is a pro-jobs, pro-consumer, pro-environment public energy infrastructure project..."  Oh, puhleeze.  If you say that enough times, will you start to believe it?  Jobs, consumer prices, and the environment is not an excuse to do away with due process.

It's not a political or policy argument at this point.  Judges don't make policy.  They interpret the law.

So, do enjoy your ride on the crazy train, Mario.  While it lasts.
8 Comments

Clean Line Whack-a-Mole

8/12/2016

1 Comment

 
In the game of whack-a-mole, the moles begin popping out slowly and are easy to whack.  But as the game speeds up, so do the moles, making it virtually impossible to hit them all at the same time, and then you lose.
Clean Line has been playing permitting whack-a-mole for years, and the game is speeding up.  As soon as they whack a particular jurisdiction's mole, another mole pops up somewhere else.  And now the moles previously whacked are popping up again, too.

On Monday, Clean Line thought it had whacked the Iowa mole for its RICL project when the IUB issued an Order setting a procedural schedule.  With a permit for RICL from Illinois in hand, the only thing Clean Line needed to build RICL was a permit from Iowa. 

But on Wednesday, the Illinois mole popped back up, not easily whacked and disposed of.
The Illinois Third District Appellate Court issued an opinion that disposed of the Illinois permit Clean Line thought it had in hand.  The Court found that RICL was not a public utility and therefore the Illinois Commerce Commission could not issue it a permit.  Clean Line is back to square one in Illinois, without a permit, although now its Iowa case is now running along at full speed (and expense).  Clean Line has no options in Illinois but to appeal the appeal, a time-consuming and expensive prospect with no guarantee of success.

And if RICL cannot be an Illinois utility, neither can Clean Line's Grain Belt Express project, whose permit mole is currently on appeal in another Illinois district.  Meanwhile, Clean Line is busily engaged in trying to whack the GBE mole in Missouri, and is expected to file another application for a permit at the end of this month.

Why bother spending time and money whacking moles in Iowa and Missouri, when the Illinois moles refuse to stay whacked?  Clean Line cannot build any project unless it has whacked all that particular project's moles, and they actually stay whacked.

So, let's add this up:
  1. State permitting process in Iowa underway which will require quick deployment of land agents and expensive exhibits, in addition to legal and expert fees.  The IUB also added engineering consultant fees to Clean Line's bill in order to evaluate the project according to Clean Line's foot-dragging schedule.
  2. RICL appeal process in Illinois.  Lots of legal fees.
  3. State permitting process in Missouri soon to be underway, which will require legal and expert fees, along with various SWAG paid to garner political  support for its project.
  4. GBE appeal process in Illinois, with very little chance for success.  Lots of legal fees.
  5. Trying to engineer, site, and acquire land in three other states for its Plains & Eastern project.
  6. Other projects in western states Clean Line is currently trying to "develop."
Cha-ching!!!  That adds up to millions of dollars every month, and Clean Line doesn't have a dime of revenue.  It's getting more and more expensive to be Clean Line and try to whack moles.  Where does Clean Line get its money?  Investors.  At what point will the investors close their wallets and post a loss on the ol' balance sheet?  Are Clean Line's prospects to win the Whack-a-Mole game getting better the longer it plays?  Nope.  It's getting harder to hit all the moles and make them stay whacked.  Eventually, investors are going to reach the tipping point where they stop throwing good money after bad.

Clean Line created a bigger mole field than it could handle when it decided it needed to "develop" multiple projects at the same time.  A smart company may have concentrated on just one project to begin with, to see how viable the Clean Line business model actually was.  But not Clean Line... it was so certain of its success, that it began dumping investor money into multiple projects at the same time.  And now, 7 years later, they're still whacking an increasing amount of moles, and need an increasing amount of cash to do so.  Will the company tighten its belt and start abandoning the least likely projects, in order to concentrate its resources on the most likely?  What if none of the Clean Line projects are very likely at all?  What if the investors finally acknowledge just how hopeless Clean Line actually is?

Game over.
1 Comment

Illinois Appeal Voids Transmission Project Permit

8/11/2016

1 Comment

 
Court determines Rock Island Clean Line is not a public utility and orders Illinois Commerce Commission (ICC)
to reverse its Order granting Certificate of Public Convenience and Necessity (CPCN)

 In an Opinion handed down August 10, the Illinois Third District Court of Appeals reversed the Order of the Illinois Commerce Commission that granted a certificate of public convenience and necessity to the Rock Island Clean Line, and remanded the cause to the Commission with directions to enter an order consistent with its decision.
 
This is a major setback for the project, which was granted a CPCN by the ICC in 2014.  In its decision, the Court found that Rock Island failed to meet two requirements for being a public utility because it does not own, control, operate, or manage assets within the State; and that the proposed transmission line is not for public use without discrimination.  Because Rock Island is not a public utility, the Court said, the ICC lacked authority to issue a CPCN in the first place.
 
“We are thrilled with the Court’s decision,” said Block RICL spokeswoman Mary Mauch.  “We have worked very hard to protect our private property rights from a speculative business venture looking to cash in on our heritage for their own financial gain.  This decision to void RICL’s permit makes all that hard work worthwhile!”
 
Rock Island Clean Line is a 500-mile high-voltage direct current electric transmission line proposed to run from northwestern Iowa to northeast Illinois.  It is owned by Clean Line Energy Partners of Houston, Texas, who is also developing at least two other transmission projects to capitalize on moving energy from the Midwest into expensive eastern electric markets.  Clean Line is currently supported by financial contributions from private investors while it struggles to get any one of its projects off the planning table to begin generating revenue.
 
The Court’s Opinion can be viewed here.
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.

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