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Constructability Calamities

8/10/2016

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Who comes up with the "constructability" summaries for PJM's transmission projects?  Do they hire a professional blackjack player to study the odds of approved projects pissing off the wrong people?  Where's the surety in spinning the wheel to determine whether a project is "problematic," when actual results depend entirely on circumstances beyond PJM's control?  The human factor is going to get them every time.

So, PJM's eternal Artificial Island project has been "suspended."  It's ever-changing scope and price tag have affected its "constructability."  The states of Maryland and Delaware were outraged that PJM's cost allocation assigned the majority of the project's costs to them, when they would receive little benefit.  "Suck it up, buttercup, we'll do better next time," said PJM.

Oddly enough, PJM's suspension of Artificial Island didn't even mention the cost allocation issue.  But nevertheless, the states are claiming victory.

Lesson:  With enough opposition, even PJM can change its mind.  And as the Delaware Public Advocate reminded PJM, this isn't the first time.
The DPA is not asking PJM to do something it has never done before. PJM has reevaluated
projects in the past. After reconsideration, PJM canceled the Mid-Atlantic Power Pathway ("MAPP") and the Pennsylvania-Allegheny Transmission Highway ("PATH") projects.

While the reasons for cancellation may be different in this case, the fact of the matter is that simply because PJM has approved a project does not mean that it gets done come what may. In cancelling the MAPP and PATH projects, PJM acknowledged that changed circumstances had caused it to reevaluate the projects; unfortunately, however, ratepayers are paying significant abandonment costs. We ask PJM to re-evaluate this Project before LS Power and PSE&G incur costs that will ultimately be recovered from ratepayers of all PJM members.

The DPA asks PJM to remember that end-use customers are ultimately the ones that pay
for projects such as this. Indeed, neither PJM nor its member companies would exist if not for customers. And those customers are not a wallet from which PJM and its member utilities can obtain unlimited funds.

Stop making poor "constructability" choices, PJM!

Speaking of... PJM approved a bunch of new projects yesterday.  Among them is a scheme to construct two new greenfield transmission projects across the Maryland/Pennsylvania border.
Picture
Sorry, but the PJM-supplied project map really is that crappy and devoid of recognizable locations.  PJM's world revolves around a map of substations and transmission lines.  Ringgold is really a place though, so that narrows down the approximate location of the western line.  Furnace Run is a town in western Pennsylvania, but the eastern line on this map begins south of York and Lancaster and probably ends somewhere near Towson, Maryland.  But don't worry about the lack of any recognizable places, because PJM's constructability summary has determined this project "is located on undeveloped land" and therefore the only likely obstacles may be bats, acquiring easements on Pennsylvania state land, and a few permitting hurdles.  No human factors acknowledged.

But I'm pretty sure people own that "undeveloped land," and those people probably will mind having a transmission line constructed on their property.  What remains to be seen is how big a squawk they can make about it.  Because, as PJM has demonstrated numerous times already, its planning isn't infallible, and when approved projects run into a buzzsaw of opposition, PJM has no choice but to go back to the drawing board and come up with a better project.

1 Comment

FirstEnergy Scheme to Pass Risk to West Virginians

8/6/2016

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It's a risk hot potato.  While some states have deregulated electricity generation, others have not.  This makes for two different economic schemes for power plants.  In the deregulated scenario, plants compete with each other to sell power in electric markets.  A deregulated plant's income is derived from what it earns.  Earnings minus the cost of producing power equals profit.  But a regulated plant comes with a guaranteed profit.  Regulation takes the place of a competitive market to guarantee a generator a fair return (but no more).  A regulated plant is guaranteed to collect its cost of producing power, plus a fair return, to generate a set amount of profit.

When power market prices are high, deregulated plants earn more, because there is no regulated cap on the amount they can earn.  However, when power market prices are low, regulated plants earn more, because they are guaranteed to earn a certain amount over their cost of service.

A deregulated plant must cover its own operation costs, everything it earns above its cost to produce power is profit.  The owner of the plant shoulders all the risk of operating a plant that doesn't produce adequate profit.  If a plant cannot produce adequate profit, it fails economically and will likely close.

A regulated plant's operation costs are covered by ratepayers.  If the plant fails to produce an adequate profit margin, it can continue to operate because it is guaranteed to collect its operating costs and a small profit from ratepayers.  The ratepayers shoulder all risk of operating a plant that doesn't produce adequate profit.  It cannot fail economically because the ratepayers are there to make up any shortfalls between the cost to produce power, and the market price of that power.

It's all about who shoulders the economic risk. 

FirstEnergy used to love deregulated plants when power prices were high.  FirstEnergy made huge profits.  But then power prices started falling because generators that were cheaper to operate entered the market.  FirstEnergy's plants use coal for fuel.  New plants use cheaper natural gas for fuel.  Suddenly, FirstEnergy's deregulated coal-fired plants weren't economic any longer and couldn't cover their operating costs and still generate a profit.  In a pure market situation, these plants would close.  However, FirstEnergy has been looking for ways to transfer their deregulated plants into a regulated system, so they can continue to operate at a loss, courtesy of electric ratepayers.  FirstEnergy wants to transfer its risk from the company to ratepayers.
“We cannot put investors and our company at risk.”
So said FirstEnergy CEO Chatty Chuck Jones during a conference with the company's stockholders.  The company is planning to transfer its unprofitable Pleasants coal-fired plant into West Virginia's regulated system so that the company no longer has any risk associated with owning it.

If it's too risky for FirstEnergy's shareholders, it's too risky for West Virginia consumers.  We simply cannot afford to shoulder more risk for the Ohio power conglomerate.  Several years ago, FirstEnergy was successful in transferring its failing Harrison Power Station into West Virginia's regulated system.  West Virginians are now paying above-market prices to operate it, and sell excess power into the regional market.  Electric bills increased to cover the cost of owning and operating the plant (and paying for a whole bunch of maintenance on the plant that FirstEnergy deferred because the plant was losing money), plus a guaranteed profit for FirstEnergy.

Late last year, FirstEnergy filed its Integrated Resource Plan with the WV Public Service Commission.  The IRP is a long-range plan by the company detailing how it plans to acquire the generation resources necessary to meet the needs of West Virginia customers.  In its plan, it contended that buying another coal-fired power plant from its parent company was the best option for the customers.  Other parties intervened to argue against it, but the Commission ultimately approved the plan, noting that actually buying the coal-fired plant would necessitate another filing and review by the Commission and parties could argue against it at that time.

However, during the last coal-fired power plant purchase case for Harrison, the company contended that there wasn't time to issue a request for proposals to solicit power supply contracts from other generators that may compete with Harrison to produce the lowest cost for West Virginia ratepayers.  Therefore, Harrison stood alone as the only "solution."

Since the PSC neglected to require the company to solicit competitive bids for supply as part of its IRP, when is an RFP supposed to happen?  It can't happen during the IRP, because it's too early in the process.  But yet it can't happen when supply is needed, because it's too late in the process.

The Staff of the PSC and the West Virginia Consumer Advocate say the time is now.  They have jointly filed a request that the company be required to file RFPs for all future capacity and energy requirements above a certain threshold.  If West Virginians deserve to pay the cheapest prices for the power they need, then the company should be required to solicit competitive bids.

But the company doesn't want to.  FirstEnergy wants to sell its Pleasants power station to West Virginians without any competition.  That's not fair, or in the best interests of West Virginia ratepayers.  FirstEnergy is whining that it shouldn't have to bear the risk of its unprofitable Pleasants plant, because it still has "life left in it."
“Is it frustrating that we’re shutting down tens of thousands of megawatts of generation in our country that’s got life left in it because of the way this market is working?” Jones said. “That is very frustrating to me.”
While the plant may still have physical "life" in it, it doesn't have any economic "life" left.

West Virginia can't afford to bail FirstEnergy out of its bad economic decisions any longer.  Subsidizing FirstEnergy is "frustrating" to West Virginians, too, who sometimes have to make a choice between paying their electric bill and buying food.  Go peddle your lemon somewhere else, FirstEnergy.
1 Comment

Transmission Myths Often Mistakenly Believed and Then Utilized to Support Unsuccessful Practices

8/5/2016

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The EUCI industry echo chamber is at it again.

Congratulations, Midwesterners, you now have your very own special EUCI conference!  Dealing with you has become a specialized practice area for the transmission industry.  What is it about you that makes you special?  Is it your attachment to your land?  Your love of uncluttered, wide-open spaces?  Your appreciation for peaceful, non-industrial landscapes?  Your honesty?  Your sense of justice and fair play?  Your mistrust of outsiders who want to take something from you?  The transmission industry sure would love to figure out what makes you tick!

That's why they will be gathering to discuss you at Transmission Expansion in the Midwest this coming October.  Attendees believe they will:
...explore the specifics of how to develop and maintain positive landowner relationships while negotiating in good faith for pipeline, electric transmission, wind and solar, rail and public sector projects. This would include whether pursuing site leasing, site purchase, easements, right of ways and/or workspace, and whether coming from the perspective of project management, design engineering, environmental, appraising, permitting, survey, right of way, inspections, construction, operations, and others, this presentation is a must in helping ensure a successful project, on time and on budget with happy landowners.
That just can't happen.  No landowner is ever "happy" when electric transmission is sited on their property.  Never.

But EUCI bravely soldiers on, putting together these industry echo chambers where industry speakers hide their failure in order to pretend they're successful. Whatever... they're only fooling themselves.  The reality is that it's getting harder and harder to permit, site, and build transmission in the face of record-breaking opposition.  Opposition is bigger.  Opposition is faster.  Opposition is more sophisticated and successful than ever before.  So, what do EUCI's speakers know about the opposition that delays, alters and flat-out cancels even the most carefully planned transmission projects?  Not much.  Not only are the industry critters lacking perspective, they absolutely have no idea what motivates opposition.  Why?  Because they've never been an opponent!  And they don't want to learn from any opposition heathens.  Wouldn't these classes be better taught by the opposition?  Instead, you get this:
Recognize and understand landowner’s perspectives and the importance of dealing with unique differences in various landowners, their personalities and their needs/concerns.
Who's going to help you understand landowner perspectives?  A landowner?  No, a land agent, the arch nemesis of a landowner.  If I really wanted to understand someone, I'd like to talk with that person, not their enemy.

And then there's this:
Beyond the historical considerations of zoning, environmental, special use, conservation and damages determination, communities are becoming more and more vocal in their requirements in infrastructure development.  As social media and cyber-activism have become the norm (even for landowners not impacted by a project), companies need to become social-savvy in route planning, outreach and negotiations.  More often than not, whether in the electric industry or in other related industries, projects are successful or fail spectacularly due to communication issues, lack of messaging and poor understanding of the locale impacted.
Would this presentation be helped by a local opposition perspective?  Definitely.  However, you're not going to get that at EUCI.  Again, this is presented by a land agent who isn't from the community where transmission is located.  The land agent has no experience presenting successful social media campaigns that draw in opponents and keep them active and engaged throughout the process.  Transmission company ideas of social media campaigns consist of cherry-picked and carefully wrapped one-way communications directed at communities.  There's nothing interactive about it if you don't agree with the company position presented.  Companies, ever afraid of legal missteps, cannot and will not communicate with opponents in an informal, down-to-earth manner.  Company social media campaigns are a complete waste of time.

KURT ALERT!!!!  Of course a Midwestern Transmission Expansion conference wouldn't be complete without some fantasy from Clean Line Energy Partners!  Except Clean Line's presentations are always the same.  No creativity there!
Case Study: Delivering Wind Energy to Market

The United States possesses some of the best renewable energy resources in the world. However, continued growth of the renewable energy industry in the U.S. faces a serious challenge: the lack of transmission. Clean Line Energy is developing a series of long-haul direct current transmission lines to deliver low-cost renewable energy to communities that have a strong demand for clean power.

This presentation will focus on the Grain Belt Express Clean Line, which will deliver wind energy from Kansas into Missouri, Illinois and Indiana. The project has received its regulatory approvals in Kansas, Illinois and Indiana and is currently working through the final state approval process in Missouri. The presentation will provide an update on the regulatory, routing, and other milestones accomplished with a focus on the benefits this project will bring to Missouri.

Amy Kurt, Director of Development, Clean Line Energy Partners
Benefits?  Pretend jobs and tax revenue?  Economic development isn't the basis for eminent domain.

And that's just the problem.  Eminent domain.  As long as eminent domain is on the table, there will be no "happy" landowners.  It's not about "communication" or psychological manipulation of landowners, it's not about siting, it's not about getting to know the community values, it's not about made-up "benefits," it's not about purchased "support" for transmission projects.  It's about the eminent domain.

No matter how much smoke and mirrors this industry generates in its echo chamber, it will continue to face increasingly effective opposition and transmission projects will fail.

Checkmate.
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Too Arrogant to Sacrifice

8/4/2016

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There was a really great op-ed published in various outlets the other day penned by Missouri Farm Bureau President Blake Hurst.  The Farm Bureau (and Hurst) object to the Grain Belt Express Clean Line, which is proposed to cross the state and affect over 500 Missouri landowners.  Hurst had this to say about Clean Line's proposal to use eminent domain to acquire land:
Backers of the project are frustrated with landowners for their reluctance to host the transmission line. Climate Change!  Renewable Energy! How can landowners be so stubborn as to hold up what is so clearly progress? Landowners along the planned route are being drafted into the war on Climate Change without their consent. If the fight against climate change can only be won if Missouri is crossed by this unsightly collection of wires and poles, then the costs should be more widely borne. The company can negotiate those easements with willing sellers along the route, and they can pass the increased costs along to millions of electricity users in the eastern United States, instead of imposing all of the costs of saving the planet on 500 small landowners in Missouri.
 What's climate change worth to the folks along the urbanized coasts who are the proposed beneficiaries of the condemnation of land in the Midwest to transmit "cleaner" energy for their use?  Obviously not much, if Clean Line needs to use eminent domain to acquire property cheaply in order to make its project profitable.  City dwellers want "cleaner" energy, but they don't want to pay a penny more for it.  It's high time for these folks to either fend for themselves in their own communities, or open their wallets.

Why should 500 Missouri landowners make a sacrifice to pump "clean" energy to cities, so that they may waste as much as they want, without any climate change guilt?

Waste?  Of course.  If climate change is such an all-fired emergency that Missouri must make the ultimate sacrifice to stop it, why are cities allowed to accelerate climate change by lighting up their buildings and landmarks at night to create a pretty skyline?  If climate change requires sacrifice, how about the cities go dark from sunset to sunrise?  Los Angeles recently did.  But it was only for one hour.  And it only darkened a few of their landmarks and buildings.  Go ahead, watch the video in this news story, because it really showcases how clueless and arrogant city folks are about wasting energy.
Perhaps if more cities turned their wasteful "landmarks" off at night, rural landowners wouldn't have to make any sacrifice for new transmission lines.  (Don't worry, power generator-types clutching your chest right about now, it will never happen, these folks are much too selfish to do anything so drastic.)  But yet these folks think they "need" to keep their cities lit up all night.  And they "need" to do it with "clean" electricity.  And therefore Missouri landowners "need" to allow the hulking infrastructure required to get it there to clutter up their personal landscapes and interfere with the way they make their living.  The arrogance is stunning.

And speaking of stunning arrogance, how about that Democratic party platform?  I rarely get political here, but someone pointed me to a portion of the platform making the media rounds here in West Virginia that really frosted my cupcake:
The fight against climate change must not leave any community out or behind -- including the coal communities who kept America's lights on for generations.  Democrats will fight to make sure these workers and their families get the benefits they have earned and respect they deserve, and we will make new investments in energy-producing communities to help create jobs and build a brighter and more resilient economic future.  We will also oppose threats to the public health of these communities from harmful and dangerous extraction practices, like mountaintop removal mining operations.
Yup, we're very, very, sorry, Appalachia, that we rode you like a rented mule for the past 100 years to power our cities, but now we're going to come in and improve your communities for you!  We're going to "respect" those who sacrifice to produce the energy our cities use by creating more sacrifice in another geographic region in order to produce new "clean and green" wind powered electricity and ship it in for us to waste!

And no community will be left behind in the fight for climate change!!!  Except those 500 landowners in Missouri.  Who will miss them?
Hypocrites.
8 Comments

Southern Cross Transmission - Just One More Attempt to Take Private Property for Corporate Gain

7/31/2016

1 Comment

 
It's not about where to put the Southern Cross Transmission line, it's about whether to build it at all.

Here we go again...
However, most the attendees at the Bell Schoolhouse Fire Station meeting opposed the project. Dennis Daniels, who organized the meeting, said he has already been a victim of eminent domain once and does not want to go through the process again.
 
"Honestly I don't have any questions for (representatives)," he said. "I just don't want them to come through my property."
 
He's concerned that the power line will decrease property values, restrict further development on his land and be an eyesore.
 
"It bothers me most that it's a private, for-profit company," he said. "They're going to use eminent domain to take our property rights away to give to a company in San Francisco to make millions of dollars off of each year."

The Southern Cross transmission project is another unneeded HVDC merchant project intended to ship renewable energy into higher priced markets for corporate profit.  But this one isn't owned by Houston-based Clean Line Energy.  It's owned by a different company, San Francisco-based Pattern Energy.  Pattern proposes that it shall build a 400-mile HVDC transmission project across Louisiana and Mississippi in order to serve energy markets in "the southeast electric grid" with wind energy generated in Texas.

The Texas wind market is tapped out.  They've built so much wind generation and transmission to ship it around the state that sometimes they have to give it away for free. 
But yet, Texas wants to be its own little electric grid, islanded from the rest of the nation's power grid.  Except when all its renewable energy goodness tanks prices.  Then Texas wants to connect to the rest of the grid in order to export its excess wind generation into other markets where it will fetch higher prices.  And that's the only purpose for Southern Cross.

This project has been in the works for years, but was only recently sprung on landowners along its 400-mile route.  And chaos ensued.  Of course the landowners don't want to be forced to sacrifice their property, personal wealth and peace of mind for the benefit of electricity consumers in other states in "the southeast."  Southern Cross will only interconnect with the rest of the grid serving Louisiana and Mississippi at two converter stations, one near the Texas-Louisiana border, and the second near the Mississippi-Alabama border.  What's in it for all the residents of Louisiana and Mississippi in between?  Not much.

And to make matters worse, landowners in Mississippi are getting smoke blown in their faces by one of their PSC Commissioners, who is urging them to communicate with Pattern Energy instead of the PSC.
In a public meeting at the Bell Schoolhouse Fire Station just outside Starkville Thursday, Public Service Commissioner Brandon Presley urged residents to reach out to representatives from Southern Cross Transmission if they have questions about the company's proposed wind energy transmission line.
 
"Let it not be said of you that you didn't call on these people and that you didn't file an objection," Presley said at the meeting.

While eminent domain is not out of the question, Presley said he believes the company will do everything in its power to avoid having to use it. Southern Cross representatives have told him they have put in similar lines in other parts of the country without resorting to eminent domain.

Presley said his office received a plethora of letters, emails and phone calls from property owners who received letters. In a meeting with company representatives, Presley said someone from the company has to meet with property owners one-on-one at the time and place of the landowner's choosing.
 
In an interview with The Dispatch Thursday, Presley said a Southern Cross representative had already begun meeting with landowners individually. Presley also had the company designate a point of contact for landowners to call. Since then, his office has received fewer calls from concerned citizens.
 
In June, Southern Cross Transmission sent letters to landowners whose property is within 500 feet of one of the proposed routes and promised to hold meetings and answer questions from landowners. The company then hosted an open house for property owners, but many left that meeting with more questions than answers, Presley said.
 
Legally, Southern Cross Transmission doesn't have to communicate with the public at all until it has decided on a route and filed a proposal with the Public Service Commission. But Presley wants to ensure that the company shows landowners the dignity and respect they deserve.

Sure, that makes Presley's job easier if all the landowners have folded and granted easements to Pattern Energy before it files its application for a Certificate of Public Convenience and Necessity and eminent domain authority in the state.  But, for the landowners, it's not simply about where to put the line, but whether or not to build it in the first place.

Pattern is misleading landowners about FERC's authority to permit this project.
FERC has previously found that the interconnection of the Southern Cross Project to the ERCOT transmission system is in the public interest and that the Project will create substantial benefits both for the ERCOT and the Southeast regions.
But FERC has no authority to permit this transmission project, or to grant eminent domain authority over private property to Pattern Energy.  Only the states do.  Both Louisiana and Mississippi will have to find need and public benefit for the project in their respective states.

Landowners can make a big difference by participating in the PSC process, and that's where they should be directing their energies right now, not wasting their time discussing where to put the project with Pattern Energy.
Southern Cross Transmission plans to settle on a route and file its proposal with the commission this fall. Once that happens, Presley said, citizens have 20 days to file an objection, which gives them legal rights in the case.
Not much time, opponents need to prepare to file objections, or better yet to intervene in the case.
He requested landowners write down whatever questions they have, take those questions directly to the company and wait until they had met with Southern Cross representatives before deciding whether to oppose the project.
Don't waste your time, landowners.  Begin crafting your "fact-based" arguments now, but the only facts you need to begin is that Southern Cross's proposal will affect your interest in real property located on or near a proposed route.  And don't think if your property is on a proposed route that is later taken off the table that you're safe.  Until an actual siting permit is granted, routes can and will change, with very little notice.  In fact, the companies like it better if landowners don't know anything about the project until the bulldozers show up.  How can you cause trouble for them if you're unaware?

Exactly... and that's why landowners are getting such late notice about this project.  But there's still plenty of time to organize and legally intervene.  The bigger the stink, the better the chances the project will be cancelled.
Presley has also said he will not approve the project unless the company can prove it has some benefit to Mississippi.
 
"I'm as much for clean air and clean energy as the next guy, but it's got to be about more than renewable energy," he said. "For us, that's a plus, but there has to be other things."
I'm sure Commissioner Presley is "for clean air and clean energy."  After all, the Sierra Club was a big donor to his campaign to be elected to the PSC.  And Sierra Club has never seen a transmission project "for wind" that it didn't love.
"At the end of the day, the ability to connect into wind energy, which does not cost anything as far as burning coal, burning natural gas, (is) obviously an energy source that could have a benefit to the state," Presley said.
 
"That's the benefit," he added. "But also obviously if this electricity is low cost, I'm not going to be supporting trucking it through Mississippi to pump it to Atlanta, Georgia, and our people have cheap electricity ran over the top of their property and not being able to take advantage of it."
That's nice to hear, but Commissioner Presley has coyly avoided the elephant in the room.  Eminent domain.  While eminent domain has historically been used to construct transmission lines for which there is some reliability need, using that authority to build transmission lines for the sole purpose of moving renewable energy to higher priced eastern electric markets is an issue of first impression.  In the case of transmission solely for profit, eminent domain takes on a whole new purpose:  Eminent domain for the private gain of a company located in San Francisco.  And that's just the rub.
1 Comment

Kangaroos Barred From FERC Enforcement Judicial Reviews

7/30/2016

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Imagine you're accused of stealing from your employer.  After a lengthy investigation by your employer, during which you were required to produce evidence and submit to exhaustive questioning, you were given two choices of how the case would proceed next.

Your first option is to elect an administrative hearing run by your employer, with the head of HR acting as an impartial judge.  During this process, you would be allowed to ask your employer for documents, question them,  cross examine their witnesses, and present your own evidence and witnesses.  Afterwards, the head of HR would make a decision that would have to be further approved by the CEO of the company.  If that decision didn't clear your name, you could appeal to the court system.  But the judge in that matter would only be able to examine the CEO's decision to decide if it comported with the law.  The judge would give the CEO a huge amount of deference for his expertise in deciding things of a business nature. 

Your second option is to forego the corporate kangaroo court and ask the CEO to just make a decision, based on the company's evidence, to make you give back what it thinks you stole and to levy what he feels is an appropriate fine for punitive damages.  You'd have the opportunity to present your own evidence to the CEO, but would not be allowed to ask the company for documents or question their witnesses.  After the CEO makes his decision, the company would have to take action against you in court to enforce the decision of the CEO to collect its goods and penalties.  In this course, you would ultimately be trying your case before an impartial judge and jury, instead of the head of HR or the CEO, and would be permitted all the same due process allowed in the foregone administrative hearing, such as discovery, depositions, cross examination, presentation of your own witnesses.

Which option would you choose?

You'd choose the second option, wouldn't you?  But what if your employer told the judge you had no due process rights in court and that he must decide the case based only on the decision of the CEO and the evidence collected by your employer?  There would be no jury.  You'd be crazy to select that option, and furthermore it would turn the court process into a one-sided kangaroo court.

But that's how FERC has interpreted the two choices available to defendants accused of market manipulation under the Federal Power Act.  FERC believes a defendant choosing the court option has chosen to forego his due process rights.
However, a federal court judge has recently decided that the defendants of FERC's market manipulation probes are entitled to due process when electing to have FERC's penalties reviewed by a court.

In FERC v. Maxim Power Corp., et al.,
... the U.S. District Court for the District of Massachusetts ("District Court") determined that review of a FERC-issued penalty for alleged market manipulation must be treated as an "ordinary civil action" requiring de novo review and finding against FERC's arguments to the contrary. The District Court further ordered in its decision, FERC v. Maxim Power Corp., et al., that in the corresponding civil action—to determine whether to affirm FERC's prior penalty assessment against the owners and operators of a power plant in Pittsfield, Massachusetts ("Maxim") and one of their employees (together, "Respondents")—the Respondents will be entitled to the full discovery of an ordinary civil case, and the proceeding can be decided by a jury, if necessary.
This doesn't mean that market manipulators can skip away without penalty, it simply means that court review of FERC's multi-million dollar penalties against alleged market manipulators will be subject to the ordinary due process allowed to everyone accused of a crime.

That's fair.
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How To Violate Your "Code of Conduct" Before You Even Begin

7/29/2016

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If this were a guide published today, it might be written by Clean Line Energy Partners.

Today, the company engineered a press release that says "TRC Supports Clean Line Energy."  Who is TRC?  Is TRC an elected official?  Is TRC a regulator?  Is TRC a transmission customer?  Is TRC's "support" of Clean Line relevant to Clean Line's regulatory approval, or even the approval of the landowners whose property the project wants to cross?

The answer is none of the above.  TRC is Clean Line's newest contractor.  In exchange for $12M, TRC says it will, "provide land acquisition services, survey permissions and overall project management for the Plains & Eastern Clean Line transmission project."  Of course TRC "supports" Clean Line.... it stands to pocket $12M for its efforts to coerce landowners to sign survey permissions and easement agreements.  Does TRC's "support" for Clean Line necessitate YOUR support?  Of course not, that's ridiculous!

Clean Line has been resoundingly rebuffed by landowners across its route.  So, what's the new plan?  Employment of propaganda devices such as testimonial, card stacking, and bandwagon.  Oh, whoop-de-doo, Clean Line!

TRC thinks you care if it makes the following statement:
The Plains & Eastern Clean Line is one of the largest clean energy infrastructure projects in the country. It will provide a pathway for 4,000 megawatts of low-cost wind power to be delivered from Oklahoma to the Mid-South and Southeast. The agreement between Clean Line Energy and TRC, which has a major office located in Tulsa, furthers Clean Line's commitment to working with local suppliers.
"Clean Line Energy's mission of building modern energy infrastructure closely aligns with our own core values of sustainability, including our commitment to grow our clean energy services year over year," said Chris Vincze, Chairman and Chief Executive Officer. "The 700-mile transmission line will improve the U.S. electric grid, support economic development and job growth, and make safe, reliable and lower-cost power available to consumers.
Wait a minute... is TRC acquiring survey permissions and easement agreements, or is it leading a cheerleading squad?  How much arrogance does it take to believe that some company's belief in a project has relevance to your personal decisions regarding your land?

And we're just getting started here...
TRC will provide program management, acquisition of environmental and cultural survey consents, and acquisition support. It also will be communicating with landowners across the route to educate them about the benefits of the project.
What?  "Educating landowners about the benefits of the project?"  What does that have to do with acquiring easements and survey permissions?  Sounds like some kind of brain-washing attempt to coerce landowners to sign on the dotted line.  Does Clean Line really believe that the only barrier to land acquisition and survey permission is "education" of landowners?  News Flash!  The landowners are already "educated," which is why they have been rejecting all Clean Line's attempts, not only at acquiring permission, but at any contact with the company at all.  The landowners got "educated" years ago by opponents of the Clean Line projects.  They know everything they need to know to tell Clean Line to go away.  Clean Line does NOT have eminent domain authority.  The most Clean Line can do is annoy landowners with their "offers."  Clean Line cannot make any legal filing to condemn and take property.  Instead, Clean Line must turn over acquisition of any property it cannot obtain to the U.S. Department of Energy.  The DOE may then reattempt permissions, but only after Clean Line has reached certain milestones with its project.  First, Clean Line must find customers for its transmission capacity.  It has not made any customers public.  It also must receive financing to construct its entire project.  It has not made any financing public.  It's going to be a long time before the DOE comes calling with more offers for landowners, and only DOE has the authority to condemn and take property through the courts.  Meanwhile, landowners can tell Clean Line and TRC to go take their Vulcan mind-meld tricks for a flying leap off the nearest cliff, mountain, hill, rock, or pebble.

What's in it for the landowner to sign permissions now?  Nothing.  Big goose egg.  Zero.  What's in it for the landowner to sign an easement agreement now?  A payment of a small percentage of the easement's value.  That's right... Clean Line wants you to sign over your property rights today in exchange for a portion of their monetary value.  You give Clean Line permission to use your property today, but they're not going to pay you in full for that permission for up to four years.  Landowners would essentially be allowing Clean Line to buy their property rights on the installment plan.  Doesn't sound like much "benefit" to the landowner. 

And let's talk about Clean Line's "self-policed" Code of Conduct.  This document is nothing but window dressing.  Since Clean Line is the only party enforcing this worthless document, it can do whatever it wants.

Behold:
Do not represent that a relative, neighbor and/or friend supports or opposes the Project.

Do not suggest that any person should be ashamed of or embarrassed by his or her opposition to the Project or that such opposition is inappropriate.

Do not argue with property owners about the merits of the Project.


All things that Clean Line and its contractors, such as TRC, cannot do.

But yet, TRC has taken to the media to support the project, and has stated that it intends to "educate landowners about the benefits of the project."  That sounds suspiciously like a violation of the Code of Conduct, doesn't it?  After all, if a landowner is already educated about the project, any statement by TRC about the project's benefits is by default argumentative.  Any statements by TRC that "[t]he 700-mile transmission line will improve the U.S. electric grid, support economic development and job growth, and make safe, reliable and lower-cost power available to consumers," are designed to make the resistant landowner ashamed or embarrassed by his or her opposition to the project and insinuate that such opposition is inappropriate.  And it's argumentative.

These people are a day late and a dollar short.  The majority of affected landowners are already "educated" about the project and have found that it doesn't provide any "benefits" for them. 

You've got to get up pretty early in the morning to fool a farmer.  Or a Mayberrian.
0 Comments

What's Beyond Coal?  More Coal!

7/23/2016

1 Comment

 
Block Clean Line in Arkansas made a stunning discovery the other day.  In testimony filed at the Georgia Public Service Commission, Clean Line Vice President David Berry informed that his Plains & Eastern "Clean" Line project could be used to "deliver bulk power from the SPP system" when it's not being used to deliver "wind generation."  That's right, "Clean" Line is now being marketed as just another transmission line to transport "bulk" fossil fuel electricity between regions.

And in its recent application to the Missouri PSC for its Grain Belt Express transmission project, "Clean" Line's Berry said that service from Missouri to Indiana on his project could be used to "provide opportunities for Missouri load-serving entities to earn additional revenue from off-system sales."

Cutting through the jargon, Berry says that his "Clean" Lines can now be used to ship fossil fuel generation.  In its desperate search for customers to financially support the project, Clean Line is dropping its "clean" purpose.  Clean Line is now "clean" in name only.

This isn't really surprising to me.  For years, opposition to the projects have been telling everyone who will listen that "Clean" Lines are a fantasy that only works on paper.  All electric transmission lines are "open access" to all customers, no matter what fuel they use to generate electricity.  And now that the rubber has hit the road, Clean Line has dropped its "clean" mask to reveal its true purpose -- to make money transmitting any kind of electricity.

Will environmental groups continue to support transmission projects that breathe new life into old Midwestern coal plants by creating new markets for their generation?  The Sierra Club and other groups supporting "Clean" Lines should have been on notice that new transmission lines supposedly "for wind" would ultimately be used "for coal."  However it looks like they got snowed by a fast-talking front man to forget what they already knew and believe in the fantasy of "clean" transmission lines.  And what was it the environmental groups knew?

As far back as 2009, The Sierra Club was wondering about the true purpose of new long-distance electric transmission lines:

Is the project just an excuse to expand the reach of coal-fired power plants rather than supporting a clean energy project?
In the case of Clean Line, the answer is now an unequivocal "yes."  The Sierra Club has been had.

Back around the time Clean Line created its corporation around the idea of "green" transmission lines, it was common knowledge that transmission lines being marketed as a way to increase the penetration of renewable energy would end up being used to increase the penetration of coal-fired power instead.

In May of 2010, a presentation was made at the National Coal Council's Spring Meeting entitled POTENTIAL IMPLICATIONS OF “GREEN TRANSMISSION” FOR
COAL POWER GENERATION
.  The presentation was made by Roger H. Bezdek, Ph.D., President of Management Information Services, Inc.  Dr. Bezdek also co-authored an article on the same subject in industry magazine Fortnightly in 2012.

Dr. Bezdek proposed that new transmission "for renewables" would instead be used to increase use of existing "middle U.S." coal generators.
Existing coal fleet utilization currently ~ 72% -74%

Can increase to ~ 85% with adequate load & transmission

Most underutilized coal capacity in Middle U.S.

Current U.S. coal capacity ~ 310 GW, furnishes ~ 2 trillion kWh annually, U.S. consumes ~ 1.1B tons of coal

If new transmission increases existing coal fleet utilization 10%, then:
--Coal could provide additional 200B kWh
--Coal demand would increase by 100M tons
--Even assuming no new coal plants are built
--However, new transmission could facilitate new coal plants

Bezdek summarized:  "Thus, RES transmission could enable expansion of coal-fired generation by equivalent of 30 new plants by 2020."

And he put the idea that new transmission could be restricted to "clean" energy firmly to bed with this simple quote:
“Restricting new transmission to green electrons is as bad as restricting a new highway to only electric vehicles.”
You can't restrict transmission lines to renewable energy.  The environmental groups have denied this in the case of "Clean" Line, believing that because the transmission line is HVDC, building additional converter stations to load coal-fired power along the way would be prohibitively expensive.  But Clean Line's recent marketing of itself as a pipeline for coal-fired power proves that if coal-fired generators can get their power to the planned end-point or midpoint converter stations, then "Clean" Line shall carry coal-fired power.  Siting the end point converter in a "renewable energy zone" is no guarantee of cleanliness, especially when combined with midpoint converters in Missouri and Arkansas that will pick up dirty power on the line's way east. 

Instead of "shutting down coal plants," Clean Line will actually be breathing new life into existing coal plants in the Midwest that may otherwise be displaced by increased in-state use of renewables, and end up shipping dirty generation to other regions.

Will the environmental groups continue to support "Clean" Lines that they know aren't really "clean?"  Will they equivocate to make trade-offs to imagine the "clean" energy will balance out the "dirty" energy on the Clean Line? 

The environmental groups need to admit the truth -- "Clean" Line isn't about "clean" energy at all.  It's only about the money to be made owning transmission lines, no matter what kind of electricity they will ultimately carry.
1 Comment

Transmission Line "Open Houses" Cause Project Opposition Infernos

7/22/2016

2 Comments

 
The transmission project "Open House" is a public relations ploy designed to indoctrinate an unsuspecting public with transmission company talking points while simultaneously dividing and conquering a community.

This tactic is so old, I don't even know (or much care) where it originated.  All that matters is that it has become an industry "best practice" that needs serious reform.  Transmission companies who utilize "Open House" format are doing nothing but shooting themselves in the foot right out of the starting gate.

The idea behind presenting a project to a community via an "Open House" format is to neutralize the combined energy of an angry crowd, such as would occur if the company presented its project to all attendees at the same time in a town hall format.  By keeping attendees separate, the company believes it is keeping the public from sharing information and validating their ideas with others who share the same unfavorable opinion about the information presented.  An assembled crowd listening to the same information from one speaker would feed off the energy of just a few naysayers until everyone is on the same opposition bandwagon.

But "Open House" meetings simply delay the inevitable.  Unless companies meet with community residents separately, multiple attendees will talk with each other and share opinions.  People band together at times of crisis, and transmission company "Open Houses" are a fertile enabler of impromptu discussions and exchanges of information by community members.  The commiseration of strangers will spill out of the "Open House" venue and continue long after the transmission company employees take off their little name tags and pack up their display posters.  The transmission company "Open House" is the birthplace of transmission project opposition groups.

In the past, each community opposition group had to reinvent the wheel and it took them longer to cause transmission project approval headaches.  Today however, the internet exponentially expands quick access to resources and information used to spray gasoline on an opposition bonfire while anger is fresh.  It's an opposition inferno!

Is there a way to change that outcome?  Sure.  But it's not about meeting format.  It's about how company information is presented.  Current "best practice" intends to lead attendees through a maze of "information stations" where company representatives explain electric energy, environmental protection, the transmission grid, transmission grid planning, need for new transmission lines, and the appearance and function of new lines.  Then the attendee is dumped out into an "information station" where they can look at maps to find out how close their property is to the proposed transmission line.  That's all the attendee cares about, everything else learned at the early stations is completely forgotten when they come to the realization that the project is going to directly affect them.  Then the transmission company hands them a "comment card" and the idea that their opinion matters in the ultimate transmission route.  Attendees are conditioned to frame their comment around pushing the line off their own property and onto that of their neighbor.  That only works for a few minutes while the attendee is earnestly at work trying to avoid the transmission line.  Comment card deposited, the attendee leaves the venue, where others have gathered on sidewalks and in parking lots to discuss the project and resolve to fight it.  Opposition is born.

I came across a news photo recently depicting a transmission company employee talking to attendees at a Southern Cross transmission project "Open House."  It's classic.  Every news story about a transmission line "Open House" includes the obligatory photo of attendees speaking with company employees.  I've seen this photo thousands of times, only the faces change.

Look at this photo.  The body language tells the story.
Nervous transmission company employee tries to explain himself to angry attendees.  Look at the three attendees.  Two have their arms folded across their chest.  That's a defensive posture that indicates they clearly aren't even listening to transmission guy any longer and certainly are long past being receptive to his information.  The attendee in the middle has his hands firmly planted in his pockets, which is also a semi-defensive move that signals insecurity, mistrust and a reluctance to listen.  All three attendees have the same expression on their face.  It's the expression of someone who clearly doesn't believe the person speaking.  You can bet that those three will be talking with each other as soon as transmission guy moves away to talk with other attendees.

But wait... is transmission guy also in the process of shoving his hands in his pockets?  Ahh... insecurity!  And why not?  Who wouldn't be insecure facing down these three?

So, what's the problem?  Transmission guy is presenting them with a fait accompli.  He (and his company and possibly a regional transmission organization) have already made the decision to build a transmission project.  Now, maybe the project is a necessary response to a problem that must be solved.  But nobody likes hearing the solution to a problem, without first considering the problem.

A better approach is not to attempt behavior control of a community to go along with a pre-determined solution, but to involve the community in crafting the solution to a problem that affects them.  Presenting the problem to the community and soliciting possible solutions within a range of possibilities, and being open to new possibilities, creates a whole different dynamic.  It causes attendees to listen to the problem, the possible solutions, and to become involved in solving the problem.  When communities are involved in crafting the solution, they cooperatively "buy in" to the ultimate solution.  Now the solution may not be the company's desired transmission project, so the company needs to demonstrate flexibility in the selected solution.  As long as it gets the job done, right?

But wait... a solution that's not the company's solution might not make the most money for the company.  Look at yourselves, transmission companies, you want to be public utilities, but yet you believe that also gives you the right to make the most money possible from the public you serve.  It doesn't.

Stasis or momentum?  The choice is yours!
2 Comments

Clean Line Does NOT Sell Electricity!

7/21/2016

4 Comments

 
One more time, with feeling...
Clean Line Does NOT Sell Electricity!
Hallelujah, brothers and sisters!

CLEAN LINE DOES NOT SELL ELECTRICITY!
That's right, Clean Line does not sell electricity.  The only thing Clean Line can sell is transmission capacity.  Clean Line is selling space on its gigantic, aerial extension cord.  The cost of energy to plug into the extension cord is not included in the cost of the cord.  It's just a cord, not plugged into anything.  If you want to actually receive electricity over Clean Line's extension cord, you must purchase electricity separately from another company, at an additional cost.

Except...
However,  [Clean Line's Mark] Lawlor says the wind farms aren't even built yet.
WGEM.com: Quincy News, Weather, Sports, and Radio
So, even if you wanted to buy some electricity to light up Clean Line's floppy cord, you couldn't.  Customers are just supposed to hope that electric generators get built, and that their prices for electricity are "low cost?"  Clean Line said of its only "customer," a state created agency authorized to operate as an electric utility wholesaler for the benefit of its combined members and cities:
"They estimated that they will save their customers $10 million a year because this power is so much cheaper than they can get today," Mark Lawlor, Director of Development with Clean Line, said.
Mark, I think you're a liar.  A deceiver of the highest order.

I don't think the cities estimated that they will save their customers anything.  I think Clean Line did their estimating for them.  And then pretended that the cities did it themselves.  From Clean Line's Proposal to The Missouri Joint Municipal Electric Utility Commission:
Preliminary calculations, assuming existing production tax credits for wind project participation in the project, could reduce costs by as much as $10M/year or $10 per megawatt hour compared to delivery of other wind projects from SPP to MISO.
Those would be Clean Line's calculations, since it was a part of Clean Line's Proposal.

In addition, Clean Line's $10M savings proposal "assumes existing production tax credits for wind project participation in the project."  Except these wind farms aren't even built yet.  And only wind farms that begin construction in 2016 are eligible for the "existing production tax credit" of $.023/kwh generated.  Any future wind farms constructed will have their tax credit reduced and eventually phased out.  The potential cost of future wind power is directly related to the construction date of the wind farm.  And
The energy suppliers are waiting on approval to build the transmission line, which was already denied twice by the Public Service Commission.
Low cost?  $10M yearly savings?  Pure speculation.

Now let's examine another fact...

Clean Line is NOT Negotiating Directly With Cities!
While WGEM is to be commended for its revelation that Clean Line does not sell electricity, it also wrongly believes that on "Tuesday night, the City of Hannibal decided to move forward with talks with the company."

That ship has sailed.  Hannibal must now negotiate with the MJMEUC to purchase Clean Line transmission capacity from MJMEUC, if it believes the bucket of $10M savings hogwash. 

Clean Line's biggest fan in the City of Hannibal can now negotiate only with MJMEUC to sign up for a portion of the 200 MW of capacity on Clean Line that the organization optioned in its "contract" with Clean Line.  Any future agreement with Hannibal is not additional capacity, or another "contract" with Clean Line.  It's simply MJMEUC re-sellling its option to Hannibal.

MJMEUC only purchased an option to buy up to 200 MW of capacity, because its "contract" with Clean Line allows MJMEUC to decide how much capacity it will actually purchase 60 days before Clean Line would supposedly begin transmitting electricity.  At that time, MJMEUC can opt to purchase absolutely nothing.
In addition, Transmission Customer may, through the Notice of Decision, reduce any or all of the Contract Capacities under this Agreement without limit or penalty. All other terms and conditions in this Agreement will remain in effect with respect to such Contract Capacities, if any, that remain after such reduction. For the avoidance of doubt, and notwithstanding anything to the contrary in this Agreement, (i) the final KS-MO
Transmission Service Contract Capacity as reflected in tile Notice of Decision may be any amount between 0 and 200 MW
; (ii) if Transmission Customer's total KS-MO Transmission Service amount is less than or equal to 100 MW, such Contract Capacity shall all be subject to the pricing, terms and conditions applicable to the first tranche; (iii) if Transmission Customer's total KS-MO Transmission Service amount exceeds 100 MW, the amount of Contract Capacity that exceeds 100 MW shall be subject to the pricing, terms and conditions applicable to the
second tranche; (iv) unless Transmission Customer has elected the additional 25 MW pursuant to Section 3.3, the final MO-PJM Transmission Service Contract Capacity as reflected in the Notice of Decision may be any amount between 0 and 25 MW and shall be subject to the pricing, terms and conditions of this Agreement other than Section 3.3; and (v) if Transmission Customer has elected the additional 25 MW pursuant to Section 3.3, the final MO-PJM Transmission Service Contract Capacity as reflected in the Notice of Decision may be any amount between 0 and 50 MW, and if such Contract Capacity exceeds 25 MW, the amount of the Contract Capacity that
exceeds 25 MW shall be subject to the pricing, terms and conditions stated in Section 3.3.
This isn't a binding contract at all.

And about that MO-PJM service:  Clean Line is offering service on its line for MJMEUC to export its members' own dirty power into another region, which will prolong the life of dirty, old electric generators owned by member Cities.  Because, despite his profession of love for "clean" wind power, Bob Stevenson is now asking the City of Hannibal to investigate the purchase of some old, dirty diesel electricity generators from the city of Palmyra.  Bob thinks it might be cheaper.  Diesel generators are about as dirty as they come -- they run on diesel fuel.  Is Bob planning to ship his dirty diesel power to PJM on a Clean Line?

Of course, if Hannibal is getting a large portion of its power supply from diesel generators, could it really advertise:  “There are also potential benefits to several of our local businesses in the fact that they could advertise that their products were made with renewable resources or ‘clean energy”?
Clean or dirty, Bob, which is it?

So, let's review with a pop quiz!

Clean Line Pop Quiz

Submit
4 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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