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Reporter Suspects Not All Transmission Proposals Are Created Equally

4/12/2016

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A lowly reporter for the St. Louis Post-Dispatch is beginning to suspect that not all transmission proposals are created equally because of the distinctly different way the Missouri Public Service Commission has treated applications for two separate proposals.

In PSC sees Ameren, Grain Belt transmission lines differently, the reporter has discovered a difference between what he dubs "traditional" utility projects and "non-traditional" utility projects.  But, apparently, that's as far as his curiosity extends, implying that the decisional factor for the PSC is rooted on the "traditional" appearance of the utility applying for the project.
Two transmission line projects that promoters say are needed to connect wind generation to the electric grid could get different treatment from Missouri regulators.
But who are the "promoters?"  That's the key.  In the case of the Mark Twain project, the "promoter" is the Midcontinent Independent System Operator, a federally regulated transmission grid planner/operator.  MISO says that line is "necessary."  MISO, as its name implies, is independent of any pecuniary interest in projects it evaluates and orders to be built.  MISO has a huge wealth of expertise in determining "necessary" transmission projects.  A state PSC is unlikely to substitute its own, or intervenor parties', expertise for that of MISO.  MISO's heavy-hitter witnesses will generally prevail when technical expertise is weighed. 

The "promoter" of Grain Belt Express is a company with a pecuniary interest in building the project.  Grain Belt Express did not participate in the MISO planning process to independently determine if its project is "necessary."  GBE's bought and paid for witnesses say what they're paid to say and are given equal weight to any intervenor-funded witnesses by a PSC.  No independent party tasked with planning the transmission grid has found GBE to be "necessary."

Therefore it shouldn't be puzzling or surprising that:
At least three of five Missouri Public Service Commissioners indicated this week they thought the project met its criteria for a certificate of convenience and necessity, which would give the utility the right to use eminent domain if it has to. A final vote will be in the coming weeks.
A "traditional" RTO-sponsored project must provide benefits to the ratepayers in the region who pay for it.  In contrast, a "non-traditional," or merchant, project may not provide any benefits to the local region, especially when its stated purpose is to export electricity to other regions.  While regional electric customers must financially support new transmission from which they benefit, they do not have to financially support transmission intended for the benefit of other regions.  While ratepayers must pay for regionally-approved projects that are built, a merchant project does not have any captive ratepayers to finance its project.  Financing a merchant project is voluntary, and in the case of GBE, it presumes its volunteers will come from other regions far, far from Missouri.  But GBE does not yet have any volunteer customers.  Anywhere.

There is little a PSC can do to force a merchant project to alter its plans to create a more beneficial project, or to look at other solutions to the merchant's stated problem, such as building renewables in other regions the merchant intends to serve.  A merchant project is "take it or leave it," and the MO PSC chose to leave it.  Conversely, an RTO will look at multiple solutions to an identified problem to come up with the best solution, and then has the muscle to make the best solution happen.

Regionally approved projects are weighed against other alternatives by the RTO and found to be the most efficient and cost effective solution to a recognized reliability, economic, or public policy problem.  In contrast, GBE has proposed no alternatives to its own project, and there is no recognized regional problem the project attempts to solve.

This is how our "traditional" transmission planning/approval system works.  The regional planning/operator system is ruled by existing federal laws and regulations.  Under this traditional system, any person can propose a transmission project to a state PSC without going through the "traditional" process, but only if they accept all market risk and pay for it themselves.  So the "traditional" system also covers merchant transmission, like GBE.  What is new, or "non-traditional" is a brand new attempt by the U.S. Department of Energy to use a loophole in an old law to override state authority over transmission permitting and siting.  This new "non-traditional" method of using political clout to build transmission despite state objection has never been used before and will be tested in the courts.  "Non-traditional" has little legal basis, while "traditional" has existed for years and has the support of a whole library of precedent.

The MO PSC found GBE's claims that it would provide benefit to Missouri ratepayers unfounded, and when compared with burden on Missouri landowners, GBE did not pass muster.  Lawlor's claims that GBE will prove benefits in a second attempt are all wet.  Without an independent RTO order that a transmission project provides benefits to a region, convincing regulators there is a benefit is an exercise in futility.  In addition, his threats that Missouri must approve GBE so as not to lose its "authority" are nothing but a lame attempt at coercion.  Lawlor played that card the last time... and lost. 

GBE has successfully clouded the issue of "need" for a transmission project.  Everyone should understand what the MO PSC understands... "need" is determined by a RTO.  GBE has no RTO-backing.
PSC Commissioner Bill Kenney, who voted against Grain Belt, noted the difference in a discussion of Ameren’s Mark Twain line during a webcast of a meeting Wednesday.

“I was one of three commissioners here who voted against the Clean Line Grain Belt Express because I felt it did not benefit Missouri customers,” he said. “I think this does benefit the ratepayers.”

Commissioner Stephen Stoll acknowledged opposition around Kirksville and Palmyra to Ameren’s 100-mile line. But Stoll, who opposed Grain Belt, said he saw the projects differently.

“I do feel for the property owners,” he said. “I know people don’t necessarily want these, but for the reasons I voted against Clean Line, I think in this case (Ameren) had gone through the requisite issues and came to us with a clear plan and that’s why I think they met the standards and I support it.”
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Utilities Always Win In Current Regulatory System

4/9/2016

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Odd little bit of filler in a NW Arkansas newspaper this week.  Bloomberg's In East, power costs fall, bills rise, tells Arkansans about utility hijinks in another part of the country.  But these hijinks aren't local only to the east, they're as old as the utility business itself.

When regulation or markets find savings for ratepayers, utilities raise rates elsewhere to make up for it. Utilities, for the most part, are afraid of change.  They refuse to make themselves relevant in a brave, new consumer-driven world.  Instead of offering products and services that consumers actually want, utilities continue to force consumers to accept the products and services the utility wants to provide.  At some point, utilities are going to make themselves irrelevant, because a consumer-driven world is here and it's not going away.

Ohio's utility tedious twins, American Electric Power and FirstEnergy, epitomize utility hijinks to ward off this brave, new world.  While being all for deregulation of generation in Ohio when it was profitable, FirstEnergy has changed its tune and wants its generation to be regulated again.  In West Virginia, FirstEnergy "sold" generators owned by its competitive affiliate to its distribution affiliate.  The problem?
Spot power traded in the market run by PJM Interconnection LLC has averaged about $31 a megawatt-hour this year. That's less than half the $84.55 average in 2008.
Suddenly, competitive plants that were making a profit for the utility were not longer profitable.  PJM's "market" had worked so well that older plants that are more expensive to run (such as antique coal plants) were no longer profitable.  In a market situation, these plants would close and be replaced by cheaper alternatives, such as natural gas plants.  Instead of changing though, the tedious twins sought out ways to make consumers pick up the costs of their plants so they could remain open and "competitive" in PJM's "markets."

After stashing their West Virginia plants in the state's regulated system, the twins came up with an idea to thwart Ohio's supposedly "competitive" generation system by selling the plants' generation into the state's regulated distribution system.  The companies concocted power purchase agreements, whereby all regulated distribution system customers would make up any market shortfalls by purchasing the "competitive" generation at the company's cost.  In turn, the company would sell the generation into PJM's "market" and leave consumers with any balance the "market" didn't cover.  That's the definition of anti-competitive.  No other generators in Ohio have the option of having regulated distribution customers pick up the cost of anti-competitive plants.  If other plants aren't profitable, they close.  That's how the "market" works.

But these utility schemes aren't long term commitments, no matter what the utility promises to score regulatory approval.  The minute these schemes aren't profitable, the utility will propose a new scheme to make sure the profits continue.  Does anyone actually believe that AEP and FirstEnergy will honor these PPAs in later years if they actually do begin to pay consumer returns at the expense of the company?  Hell no.  If that ever happens, the utility will find a way to get out of them and return them to a "competitive" business model.  The utility never loses in our current regulatory system.  The consumers are the perpetual losers.

Another utility scheme is to make up for losses on the competitive generation side by increasing profits on the regulated business side.  Regulated transmission pays great returns and can earn additional financial incentives through federally regulated rates.  It's not like we "need" a whole bunch of new transmission, it's that utilities need a way to make money.  All of a sudden the transmission system, long neglected, has become rickety and failing and must be replaced.  Serendipity!  If a utility can earn double-digit returns building or rebuilding its transmission, then that's what they do.  Utilities with stated rates are paid a set amount for maintenance of their transmission assets.  But what happens if they don't spend all that money?  It's added to share holder dividends.  So, if a utility is hurting and looking for ways to increase share holder returns, the first thing they may do is cut maintenance spending.  A look at any utility's quarterly calls with investors demonstrates that cuts to maintenance happen all the time in order to boost share holder dividends.  But what happens to the transmission assets that aren't maintained?  They become rickety and begin to fail.  Serendipity!  At that time, the utility determines that the transmission line needs to be completely rebuilt and earns a double-digit return on its "investment."

The transmission investment smorgasbord is why rates have increased, despite falling generation prices:
As the price of electricity in the region fell by half over the past decade, utilities raised monthly bills for residential customers by 26 percent, according to government data. Consumer advocates say the power companies are using falling electricity costs as cover to raise other charges. Utilities counter that they are passing on billions of dollars' worth of government-mandated improvements to long-neglected infrastructure.
Consumer advocates say this scheme isn't "fair" to consumers.  But no end to the transmission feeding frenzy is in sight.  While utilities spend their cash on profitable transmission investments, less profitable investments in the distribution system suffer.  When state-regulated distribution investments pay an equal or better return than federally-regulated transmission investments, perhaps we'd see some attention paid to our rickety and failing distribution system.

Here's the lesson:  The utility always wins because regulators have been conditioned to care about the utility's well-being over that of the consumer.  After all, the utility is a constant in the regulatory realm, while consumers rarely show up.  Only when regulators force better solutions will consumers benefit.  Perhaps that's when utilities will realize they need to make themselves relevant to consumers by offering products and services consumers want, instead of force-feeding them the products and services the utility wants to offer.
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And Not A Single Wart Was Found!

4/7/2016

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Bob Stevenson's search for Clean Line warts has come to an end.  And not a single wart was found!

In Bob's first weekly Clean Line column, he promised, "to shar[e] all we know about the company, the offer, the risks and rewards, warts and all."  Except in the seven weeks since, he hasn't shared one wart.  Not one.  In Bob's view, Clean Line has no warts.  Week after week, Bob sang Clean Line's praises. 

Bob thinks that his columns helped Hannibal "form an educated opinion."  But I think Bob is the one who got the education here.  Last week, Bob got publicly educated by Missouri electric cooperatives, who corrected some misinformation in one of his columns.  And every week, Hannibal ratepayers educated him about other misinformation.  Bob got educated about regional transmission organizations, electric resource planning, renewable energy certificates, Hannibal's laws about procurement, what was actually in Clean Line's presentation to the City, the MO PSC Order Denying Clean Line a Certificate, Clean Line's business plan, and other topics.  Good times!  So, let's put this baby to bed for now, because these glowing Clean Line sales pitches are getting tiring.

Bob shares that "sometime in the next few weeks we expect to see a more definitive offer from Clean Line with or without other Municipal electric cities."  And this will be made public, Bob?  Or will you simply start the circus over from the beginning?  Let's hope Bob will use his new education to make impartial decisions in the best interests of Hannibal's electric ratepayers.

Bob says, "I have tried to dispel the notion the Clean Line project is dependent on our approval or partnership."  Whose notion is that, Bob?  I've never heard that notion.  Clean Line wants to use Hannibal as "a good witness" in a possible future PSC case.  Does Bob think his testimony will make or break it for Clean Line?  He certainly can't have the notion that Hannibal's puny 25 MW purchase of Clean Line's 4,000 MW capacity will make or break the company's success, can he?  That might just overestimate Hannibal's importance as the attractive Clean Line capital of the free world.

Your opinion about the terrible things that may happen if the Federal government got involved in Grain Belt Express is misinformed.  What makes you think Federal involvement would "leave Hannibal out of the deal entirely?"  This demonstrates how little Bob knows about the Clean Line projects, but yet he is quick to offer his misinformed opinion.

Bob wants you to answer some questions, such as:  "Are the possible savings on our bills worth the possible ill feelings from our neighbors?"  What possible savings?  Remember, Bob, Clean Line's presentation didn't show any savings over other wind options.  Your reason for steadfast allegiance to one company, a company that may not be there when you need a wind resource in the future, is a secret everyone would like to see revealed at this point.  I guess Bob has one more deep, dark secret after all.
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Legislators Work To Protect Constituents

4/7/2016

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All too often our elected representatives head off to our state capitol, where they're surrounded by paid corporate lobbyists every day, and they forget all about us.

Not so in Iowa and Missouri, where legislators are working hard to protect the interests of the ones who elected them.

A bipartisan Iowa House yesterday passed HF 2448, an act relating to the construction, erection, maintenance and operation, or sale of specified electric transmission lines.  The bill:
  1. Prohibits bifurcation.
  2. The sale or transfer of a merchant line shall not carry with it the transfer of the franchise (permit).
  3. A company has 3 years from the first informational meeting (required as part of the application process) or its application shall be rejected.  A company shall not file another application for the same, or a substantially similar project, for 60 months.
  4. The IUB shall not grant a petition that involves the taking of property by eminent domain unless 75% of the necessary easements have been obtained voluntarily.
  5. In an application that involves eminent domain, "public" shall be interpreted to be limited to the consumers located in Iowa.
The bill now moves on to the Iowa Senate. 

The bill's sponsor, Representative Bobby Kaufmann, said, “Every day I, in this body, am going to be loyal to the landowners rather than the pocketbooks of the Rock Island Clean Line.”

Opponents of the bill said it wasn't "fair" to Texas-based Rock Island Clean Line.

Kaufmann said Rock Island Clean Line developers have kept property owners hanging for too long.

“Whose fairness right are we going to choose: property owners or an out-of-state corporation?” Kaufmann asked.

Read more about the remarkable grassroots efforts in Iowa on the website of the Preservation of Rural Iowa Alliance.

And in Missouri, a House committee hearing was held on HB 2418, a bill modifying provisions related to eminent domain power of utilities.  The bill adds the following provisions:
4. Notwithstanding any other provision of law to the contrary, the power of eminent domain shall not be exercised for any electric transmission line project if any of the following apply:
(1) Such project is proposed and built outside a regulated regional transmission planning process;
(2) Such project is not eligible for recovery of costs under a regional transmission operator or independent system operator tariff for transmission service it provides;
(3) Such project is constructed entirely with private funds and users of the line pay for the transmission line;
(4) Such project primarily involves construction of a high-voltage direct current transmission line.
5. Subsection 4 of this section shall not apply to a transmission line, wire, or cable that primarily provides electricity through alternating current and is used by:
(1) Rate-regulated electric utilities, municipal electric utilities, or rural electric cooperatives; or
(2) Electric transmission owners to provide electric service, for compensation, to the public or any entity described under subdivision (1) of this subsection.
Read more about this legislation here.

Block GBE Missouri reports that the hearing went well, with six witnesses testifying in favor of the bill.

Now that's representation of the people!
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Congress Launches Investigation Of DOE's Clean Line Decision

4/2/2016

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The honeymoon is over!

Senator John Boozeman has announced an investigation:
I have asked legal experts and Congressional investigators to carefully review the Department’s decision. We are studying several related documents released by the Department, including the 22-page "Record of Decision" on the environmental review, a 73- page “Summary of Findings,” and a 210-page “Participation Agreement” between the Department of Energy and Clean Line. We will also require the Department to answer a series of questions related to its decision and provide all related documents and evidence.
Boozeman also reiterated his intention to pass legislation to limit the DOE's authority on Section 1222:
Last year, in an effort to clarify the law and restore rights to Arkansans, I introduced the Assuring Private Property Rights Over Vast Access to Land (APPROVAL) Act. Congressman Steve Womack (AR-03) introduced the same bill in the House. The legislation is supported by the entire Arkansas delegation. In October, Congressman Womack and I highlighted the need for this legislation during a House Committee on Natural Resources hearing. Our bill would make it crystal clear that these kinds of projects must receive state approval.
Senator Boozeman has pledged to take measures to stop DOE's overreach.
Thankfully, the Obama Administration’s plan for this power line still faces hurdles. This is not a done deal. The Department must be able to legally defend its decision, and there are big gaps between what the law requires and the decision the Department reached. The plan also faces strong opposition by many in Congress.
It's not a done deal.  Read more here!
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The Department of Energy's "Landowner Benefits" Ruse

4/2/2016

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The U.S. DOE claimed in a press release
Through its rigorous review and lengthy negotiations to build in protections for landowners and the local communities, the processes insisted upon by the Department go well beyond the provisions established by Congress in Section 1222.
And if you believe that ruse, I've got a bridge in Brooklyn to sell you.

The reality is that the DOE is planning to coerce landowners to sign survey and easement agreements under threat of condemnation and taking of their land by the Federal government.  It's all there in the "Participation Agreement" signed by the DOE and Clean Line.  Every affected landowner should take a look.  No landowners were party to the "lengthy negotiations" that took place at the DOE to "build in protections for landowners," so you may question whether anything in this agreement actually protects your interests.  DOE doesn't even know what your interests are!

Earlier this week, Clean Line stated that it wanted to "share its revenues" with landowners.
Clean Line Energy executive vice president Mario Hurtado, said via email. “We have created a market-leading compensation package that allows landowners to share in the revenues earned by the project and an easement acquisition process that provides important protections so that landowners are treated fairly.”
Bridge.  Brooklyn.  You know what Clean Line is willing to do?  Exactly what is in the Participation Agreement, and nothing more.  Nothing at all.  Clean Line will do the minimum required under the agreement and then turn the remainder over the the DOE for condemnation.  And there is no "share in the wealth" provisions for landowners in the Participation Agreement.

The Participation Agreement states,
No Clean Line Entity shall engage in any coercive action with respect to any Landowner, Curative Party or tenant in respect of the undertakings required hereby.
And then just steps from the starting gate, Clean Line engages in a lie by telling landowners that they will "share in the revenues earned by the project," when this is not part of the Participation Agreement's "protections" for landowners.  What is coercion?
The practice of persuading someone to do something by using force or threats.
It's perfectly okay with the DOE if Clean Line lies to landowners in order to get their foot in the door, but threats of condemnation are out of line.  Remember this!

Don't be afraid of scary words like "condemnation," or "eminent domain."  The DOE doesn't want to engage in it anymore than you do.  It's costly and time consuming.  Once, a government wanted to take my land to build a gated community and high-end shops.  They offered a pittance.  I refused.  The closer and closer we got to a condemnation hearing, the higher the offers from the government became.  The offer made to my attorney, literally on the steps of the court house just before the condemnation hearing, was six times the original offer.  I'm not an attorney, and none of this is intended as legal advice.  It's just a sharing my own personal experiences, and it's been my experience that the first landowners to sign get the least amount of money.  There's always more money available and a "final offer" is often not final.  I received much more than the other landowners because I was the last one to sign, not the first one. 

Get yourself a competent, local attorney.  Beware large out-of-state "eminent domain specialists" whose payday is dependent upon you signing an agreement with the company.  You'd get better advice from an attorney who is billing you by the hour.  His payday isn't dependent upon you signing an easement agreement.

So, what's in the Participation Agreement "protecting" landowners from Clean Line's easement acquisition actions? 

First of all, Clean Line needs to "locate the landowner."  They can do so by "using a private investigator to conduct a search for such Landowner, inquiries with
relatives, neighbors or other individuals that could reasonably be likely to know the location of
such Landowner."
  This is "protection?"  Sounds like intimidation to me.

Next, Clean Line is supposed to give the landowner an "initial notice and landowner materials," consisting of:
(i) a proposed form of easement and/or other applicable documentation relating to the conveyance of the proposed Project Real  Estate Right;
(ii) a payment calculation sheet or other documentation in respect of any compensation proposed to be paid to such Landowner in connection with the applicable Project Real Estate Right; provided, however, that with respect to any parcel that is not a Waiver Parcel, such payment calculation sheet or other documentation shall only be provided after the appraisal has been performed;
(iii) a sketch identifying the boundaries and the nature of the applicable Project Real Estate Right;
(iv) a construction questionnaire designed to gather necessary information in respect of conditions at the location of the applicable Project Real Estate Right;
(v) a copy of the Clean Line Entities’ Codes of Conduct for acquisitions of Project Real Estate Rights (which is attached as Schedule 12 to
this Agreement);
(vi) a request for permission to conduct a survey of the applicable Project Real Estate Right; and
(vii) in respect of any Project Real Estate Right located in Oklahoma, a copy of the Private Rights Settlement Agreement, dated January 14, 2011 (the “Private Rights Settlement Agreement”), and the Order from the OCC, dated October 28, 2011, approving the PECL OK’s application to conduct business as a
public utility in Oklahoma.
Landowners are "protected" by being offered a legal document written by Clean Line, in its own best interest, that they are encouraged to sign without legal representation of their own.  When you sell real estate in an open market, both parties are represented at settlement by their own legal counsel.  Nobody ever sells their property to a stranger who comes knocking on their door with a prepared legal document.  So, why should you?  Land agent promises mean nothing unless they are written into the signed legal document, before you sign.  Everything you will receive must be set out in the easement agreement, in writing.  You'd be much better off with an easement agreement written by your own counsel, instead of accepting Clean Line's terms.  Clean Line is writing these agreements in their own interest, not yours.  Not all desired terms of easement agreements revolve around money.  In fact, money should be the least of your worries when you are legally bound to a transmission company for decades.  Read the paper linked here to find important provisions to include in your own easement agreement. 

Although samples of many of the documents are included as attachments to the Participation Agreement, the easement agreement is not one of them.  What's in the easement agreement that can't stand public scrutiny?  Doesn't sound like a "protection" for landowners to keep the easement agreement hidden until presented to the landowner in person by Clean Line, and urging him to sign immediately, without advice of counsel.

A "payment calculation sheet" prepared by Clean Line's property value appraisers "protects" you from receiving an offer below market value.  The payment calculation sheet becomes part of your easement agreement, once you sign.  Whatever is on this paper is a legal part of your easement agreement.  Clean Line's "market values" are determined by a company located in another state that uses prior sales in your county to calculate a value for your particular property.  It's all very high level, and prior sales can be cherry picked to come up with the value the company wants to assign to your property.  No appraiser may visit your property to discover its unique features.  Clean Line, at its own discretion, may deem your parcel a "waiver parcel," meaning it will refuse to have your property individually appraised before determining a value.  Even if Clean Line offers to have your property appraised, the appraisal shall be performed by Clean Line's contracted appraiser.  This appraiser performs all Clean Line's appraisals in your area under a contract.  You are not allowed to have your own appraisal performed by an appraiser of your choosing.  Or, better yet, to have the value determined by averaging the values determined by three appraisals -- one performed by Clean Line's appraiser, one performed by the landowner's appraiser, and one performed by an appraiser agreed to by both parties.  This may be small "protection" but it is the kind of value determination required by a state PSC approval of a transmission line.  DOE's "protections" don't even go that far.  And, one more thing about appraisals... if Clean Line doesn't like the appraisal its contractor produces, it can act as follows:
(a) The Appraisal will be sent back to the original Appraiser for revisions based on the appraisal review and then resubmitted through the review process as outlined
above; or
(b) A meeting will be held between the Appraiser and Review Appraiser to gather more facts regarding the subject parcel to formalize a joint appraisal analysis.


Clean Line's contracted appraiser had better toe the "clean" line or risk having their arm twisted.  But you can trust this appraiser because it's one of DOE's "protections" for landowners!

A sample of the Payment (or Easement) Calculation Sheet is included as an appendix to the Participation Agreement.  As you can see from this sample, your total easement consideration (payment) consists of the value of your land.  There's no line item for "revenue sharing," structure payments, damages or anything else.  It's a straight up calculation of the value of your acreage.  Also take note that this is more aptly considered an Option for easement, because you're not getting your payment all at once.  You'll get 30% of the agreed value when you sign.  You'll get the balance when they show up with the bulldozer.  If that doesn't happen before December 31, 2017, then Clean Line can pay you another 10% of the agreed price to extend the contract for another year.  If the bulldozer still hasn't shown up by December 31, 2018, then Clean Line will dispense another 10%.  At this point, you'll have 50% of the agreed upon value in your pocket.  And guess what?  Clean Line can back out of this easement agreement at any time it likes by failing to pay you the additional amounts.  You can never back out of this easement agreement.  It's permanent.  And remember, any percentage of value payments made along the way are deducted from the final amount you will receive.  They are NOT in addition to the value determined. 

Although the Participation Agreement requires Clean Line to pay for:  (iii) any damage to any crops, timber, livestock, structures or improvements of the Landowner that are reasonably likely to arise as a result of the conveyance of the applicable Project Real Estate Right and the Project...
There's no line item for this on the Payment Calculation Sheet.  How is the landowner "protected" here?  Is the landowner supposed to hope that Clean Line pays whatever they request after the damages have occurred?  Or does the landowner have to go through the courts to be reimbursed if they don't agree with Clean Line's assessment of the damages?  Determine damages, and a method for fairly assessing their cost, in advance and add it to your Payment Calculation Sheet and/or easement agreement.  Don't get stuck taking a pittance from Clean Line, or spending years in court, for the damages it caused.

And now let's talk about Clean Line's "Code of Conduct" for acquisition of your real estate.  As I've written before, this "code" was plagiarized from another transmission project where land agents actually did the things set out as prohibited by the "code."  These prohibited actions are standard operating procedures for land agents.  They actually happened.  The problem with this "code," is that there is no enforcement mechanism.  There are no penalties for violation.  There are no "code police" to call when a violation occurs.  Is DOE going to enforce this "code?"  There's nothing in the Participation Agreement about enforcement of this "code" or how a landowner shall report infractions.  This "code" doesn't protect landowners.  It's only so much window dressing.  Landowners should document all contact with land agents.  Record all meetings and telephone conversations with land agents.  If a land agent is abiding by the code, they should have no problem with you recording the meeting.  If they object, however, you can decide if their intentions are genuine, and whether to meet with them at all. 

Regarding "Construction Questionnaire" or "Survey Permission" forms -- you don't have to fill these out or sign them.  Clean Line has no authority to make you do so.  You participate in these activities of your own free will in order to help Clean Line with engineering of its transmission line.  A survey could damage your property.  There is no compensation offered by the company in exchange for allowing a survey.  In fact, the "Survey Permission" and "Construction Questionnaire" forms are not included as examples in the Participation Agreement.  Who knows what's in them, or whether there is adequate protection for the landowner?  Have your own counsel review them, if you're considering signing them.

Another point in the Participation Agreement... at the landowner's request, Clean Line must "submit" to "binding arbitration" if the landowner and Clean Line cannot agree to a price.  Arbitration is a quasi-legal process intended to settle disputes through the decision of an impartial third party.  Binding arbitration means you give up your right to disagree with the decision made.  You don't have to submit to arbitration.  If you do, you give up your rights to have the form of your easement agreement and the value you receive for your land reviewed by a court.  Arbitration is a cheaper process that strips you of your due process rights.  I would much rather have my issues decided by a court, where I may appeal a verdict I didn't agree with.  Arbitration is giving up your legal rights.

In addition, the Participation Agreement stipulates:
The Clean Line Entities shall develop a  standard script of talking points (subject to DOE’s approval) describing DOE’s participation in the Project and DOE’s obligations in connection with any acquisition of Project Real Estate Rights, which standard script shall be applied and followed by each Clean Line Entity and its contractors in material respects in all communications and correspondence with any Landowner, Curative Party or tenant.
Of course, the "script" is not included in the Participation Agreement, so nobody knows what's in it.  Ask to see a copy of the approved "script" before talking to a land agent.  And, just like the "code," there's no enforcement mechanism or penalty for failing to abide by this stipulation.

The Participation Agreement also provides a mechanism whereby Clean Line "assigns" acquiring a particular easement to DOE.  That's because Clean Line does not have the ability to condemn any property and take it by eminent domain.  Only the DOE can do this.  Don't be afraid of any threats from Clean Line that their offer is "final" and if you don't accept it they will turn your case over to DOE.  Once DOE gets your case from Clean Line, it, too, must attempt to engage and negotiate with you before condemning the property.  Only DOE can proceed with condemnation.

Do yourself a favor and read the Participation Agreement in its entirety.  It's long, but not nearly as long as "perpetuity" will be if you sign something that doesn't protect your interests.  The DOE isn't looking out for you here, they only negotiated with Clean Line to come up with this agreement.  Protect yourself.
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Using Politics To Build An Electric Grid Is The Definition of Insanity

3/31/2016

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While Clean Line Energy Partners and the U.S. Department of Energy enjoy their little honeymoon of politically-motivated transmission line goodness before the reality of legal challenges begins, things have become what I can only characterize as... quite insane.

Environmental geeks and freaks think Clean Line is just the beginning of a new politically-motivated transmission grid, where lines are added based on lobbying, back room deals, kickbacks, and the politics of the moment in Washington, DC.  Except they're toying with the world's largest machine... the engineering wonder that keeps the lights on.

The idea that gigantic transmission projects that have nothing to do with a coordinated plan can be politically forced into operation completely upends the current regulatory system in its entirety.  It discourages coordinated planning and membership in regional transmission organizations, usurps traditional state siting and permitting authority, and obviates regulatory authority.

Why waste time at RTOs or regulatory agencies, when you can use politics to get your transmission project built?  If you can dream it up, and find some investors to finance its initial development, why bother with lengthy and risky regulatory and regional planning processes?  The more lines built outside the planning process, the less likely transmission developers will be to participate in the RTO process.  If the political decisions of a federal agency, made behind closed doors without any due process, are the new norm, we're in big, big trouble.

Because this guy thinks we should be like China now, and just start building with no concern for planning, regulation, or due process.  Of course, he also thinks the sun and wind are "concentrated" in sparsely populated areas.  That's the most ridiculous bunch of malarkey I've ever heard.  The wind blows and the sun shines everywhere.  In fact, the wind blows harder and for more sustained periods offshore than it does in the Midwest.  Why don't we start building transmission to harvest that?  Because it upsets the politics in Washington, DC and other east coast cities, where the energy hogs don't want to look at any new infrastructure clogging up their sea views.

And he uses a map for a "national transmission overlay" that was originally proposed by coal-lovin' American Electric Power 10 years ago as a "wind integration" idea.  Except when AEP's map is superimposed over a map of U.S. coal deposits, it sure looks like their "wind integration" grid was intended to move coal-fired power around.  How else do you explain the complete lack of new lines "integrating wind" into the Southeast and New England.  Don't they love "wind," too?

So, yes, let's be like China and just start building an uncoordinated, politically-motivated grid and run roughshod over our people and regulatory system.  Let's get rid of the Federal Energy Regulatory Commission, regional transmission operators, state public service commissions, and due process for affected citizens and have our grid "managed" by politics at the DOE.  Because making a rather insane "ugly compromise" like that is supposed to be necessary to save the planet.  Screw the people who gotta live there.
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Oh, The Thinks Bob Can Think!

3/30/2016

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Hannibal BPW General Manager Bob Stevenson thinks
In previous columns you might have read between the lines to think I am in favor of the HBPW buying wind energy from western Kansas.
No, Bob, what I think is that you're a shameless shill for Clean Line Energy Partners and I wonder what you're getting out of it, on a personal level.  No reading between the lines required!  I read between the lines to try to decipher your grammatically tired columns.  And that makes me tired.  But, hey, what would Tuesday be without an advertisement for Clean Line penned by Bob?  Productive, that's what.

This week's column purports that Clean Line is the only way for Hannibal to reach economical wind markets.  Really?  Based on what?  Bob doesn't say.  It's a fantastical statement without any facts to back it up.  I don't believe it.

Bob shares that he will be changing Hannibal's purchasing strategy in June, 2017.  Is that when the open and competitive purchasing process ends and the sole source back room deals begin?  Like most municipalities, Hannibal has codified purchasing requirements.  I guess Bob is going to change the City Code?  Good luck, there, tiger!

What's the problem with soliciting bids for wind energy and paying the transmission costs on the existing system?  Could it reveal that economical wind energy could reach Hannibal without a Clean Line?  You could even sign a PPA for that wind, just to keep your prices "stable" over the long term.  Because stable prices, even those that become way too high when compared to market prices, sort of like Prairie State, are best, right?  You'll never know the possibilities of what energy is available until you openly solicit bids! 

Instead, Bob prefers to operate in a much smaller world where the all the energy available can only be delivered by a Clean Line.  That's simply ridiculous, Bob!  And it's not true.

And then Bob starts waxing Sibylline about a future where all businesses in the world relocate to Hannibal because only it has green energy delivered by a Clean Line.

Why buy the cow when you can get the milk for free, Bob?  Sure, businesses like to pretend they are powered by green energy.  But that's all they do... pretend!  They don't have to move to Hannibal to pretend they're powered by green energy  They simply buy renewable energy credits (RECs) and carry on at their preferred location.  Having energy delivered by a Clean Line isn't a draw for businesses to relocate to Hannibal.  Buying junk RECs from renewable energy projects in another state or region allows a business to claim it's powered by green energy, at little cost.  It's a heck of a lot cheaper than relocating the physical business to Hannibal. 

Hannibal could become known for something alright... for buying capacity on a transmission line to nowhere at great expense to its ratepayers.

Have you ever tried your hand at fan fiction, Bob?
3 Comments

Media Clean Lies

3/29/2016

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I can't take it anymore.  I'm gonna snap and start throwing water on a media that's all wet to begin with.  I've never seen so many lies, half-truths, and simply manufactured "facts" as those in the many stories that got generated over Easter weekend about DOE taking a kickback from Clean Line in exchange for agreeing to participate in its project.

Any entity that releases important information mid-day on Good Friday is up to no good.  It's a cowardly and underhanded way to release bad news that you don't want the media to see.  But see it they did.  And since Moniz was probably busy stuffing his piehole with farm-fresh Easter goodies, nobody was available to answer questions from the media.  So the media made crap up.

The DOE ought to be as ashamed of itself for its cowardly media release as it apparently is of its decision to "participate" in the Clean Line project.  But now that we all know how ashamed they are, and terrified of the truth getting out, we'll be sure to spread the word.  ;-)

Here are some of the worst lies that showed up in the media:
  1. The New York Times wins the award for stupidest lie with this:  "Energy officials have been urging significant extensions and upgrades to the nation’s transmission system for years but there has been little new construction since the 1980s."  What?  The same Energy Policy Act that brought us this travesty also tasked FERC with handing out incentives to build transmission.  Since the incentives started in 2007, more than $100B of "transmission spend" has been plunked down into the world's sweetest investment account where it earns double-digit returns on equity, even when the project is abandoned and never built!  The NYT simply made up the fact that little new transmission construction has occurred since the 1980s.  It's just not true!  The Times also thinks, "The development, led by Clean Line Energy Partners, had been delayed because of resistance from state lawmakers,..."  State lawmakers (as in legislators, right?) have nothing to do with state public utility commission approval of a transmission project.  State PUCs are the ones who examine applications to build transmission projects and issue or deny permits.  And the reporter tells us, "The decision also signals that the Obama administration remains committed to encouraging the spread of renewable energy, seen as a major component of reaching national goals on stemming climate change."  So, transmission projects are built as part of a political agenda now?  There's no planning involved in operating the world's largest machine?  Political decisions will create a hodge podge of transmission lines and we're supposed to cross our fingers and hope the lights stay on?  That's not how it works.  Generation and transmission planning is an engineering issue, not a political one, but I can see how this reporter got confused due to DOE's choice to step into transmission planning to push a political agenda.  DOE is now profiting from building its own politically-motivated electric grid.  That frightens me.
  2. E&E Publishing warped time with its made up set of facts involving Clean Line's application to the DOE.  "Clean Line's decision to seek federal participation in the project follows failure to win approval from utility regulators in Arkansas five years ago."  DOE issued an RFP for Section 1222 projects and Clean Line was the only company to submit applications in 2010.  Your story gets the date of the Arkansas Public Service Commission's rejection of Clean Line correct as 2011.  How did the 2011 rejection happen before the 2010 application to the DOE?  Lies!  Dirty lies!  Clean Line and the DOE were already in cahoots long before the Arkansas PSC rejected the project.  Of course, can we blame E&E when they got their lie directly from the drippy lips of Clean Line President Michael Skelly?  "In an interview with EnergyWire, Skelly said the company decided to seek approval under Section 1222 of the Energy Policy Act rather than lobby to change the decades-old definition of a public utility in Arkansas. 'Changing laws is quite a Herculean task,' he said."  No, no, no... Skelly decided to seek "approval" for DOE to issue an RFP for his projects long before he'd even applied to be a public utility in Arkansas!  And while he was on a roll, Skelly had some more lies to tell about the Federal government's role in electric transmission permitting and siting.  Skelly, however, downplayed the significance of the federal government's role in interstate transmission projects:
    "The federal government is involved in transmission and infrastructure siting around the country," he said, citing the government's role in siting and approving interstate natural gas pipelines.
    The federal government played a big part in developing the bulk power grid across large swaths of the rural West.
    "I think it's a mistaken notion that the federal government isn't involved in transmission," Skelly said. "The notion that this is unprecedented doesn't square up with the way the grid has been built and the way it will be built."
      Pipeline permitting and siting is a federal responsibility, while electric transmission permitting and siting is a state responsibility.  Congress has long rejected a switch to Federal electric transmission siting and permitting.  The closest it's ever gotten was these stupid loopholes in the '05 Energy Policy Act (Section 1222 and 1221) that don't stand up to judicial review.  Skelly is the one "mistaken" about the federal government's role in transmission, in his desperate attempt to normalize the charlie foxtrot the DOE has just created.  It is unprecedented.
  3. Sierra Club still owns the hypocrite award for its rather puzzling condemnation of the use of eminent domain for other regionally planned transmission projects it believes support fossil fuels, while supporting eminent domain use for the merchant Clean Line project.  Sierra Club demonstrates just how little it knows about what it supports with this statement, "The decision comes after five years of review by DOE, and means the federal government will step in to help secure the transmission route, if and only if the developer can’t reach agreement with a state (Oklahoma and Tennessee have already endorsed the project)."  This isn't about agreement with a state -- the DOE and Clean Line basically told the State of Arkansas to go blow and used Section 1222 to usurp the state's authority to site and permit a transmission project.  And the use of 1222 to change the delicate state/federal balance is what has Arkansas and its Congressional delegation hopping mad.  I have a feeling fallout will be swift and cutting.  Sierra Club also demonstrates that it has no earthly idea how the grid (or merchant transmission) works by claiming Clean Line will exclusively deliver renewable energy and shut down fossil fueled generation plants.  All transmission lines (all of them!) must abide by Federal open access rules, which means that all forms of generation must have equal opportunity to use them.  The grid cannot separate "clean" from "dirty" electrons -- they all look and work the same.  As well, nobody (and that means nobody) will be using Clean Line's capacity unless they pay for it.  So, it's just not true that Clean Line will meander through Arkansas "dropping off" clean electrons for use by citizens in that state.  It will only "drop off" mixed electricity if an Arkansas utility pays for the energy and transmission capacity.  Ditto for other states in the "south and mid-south" Clean Line claims it will serve.  Nobody gets anything unless they contract and pay for it.  And Clean Line and the DOE cannot force any utility to buy capacity on a Clean Line.  They can build it, but nobody may come.  Therefore, there are no guarantees that "Clean Line Entities shall use all commercially reasonable efforts to ensure that at least 75% of the total Electrical Capacity covered by all Transmission Services Agreement that are then in effect to be covered by Transmission Services Agreements used for the transmission of renewable energy resources."  (From DOE/Clean Line Participation Agreement).  All this happy clean energy talk is just that... nothing but talk.  And most of it is not true.
  4. Transmission and Distribution World makes up an alternate reality for the purpose of Section 1222 and the contents of DOE's political agenda set forth in the 2015 Quadrennial Energy Review.  "This marks the first use of Congressional authority conferred to DOE as part of Section 1222 of the Energy Policy Act of 2005 with the objective of promoting transmission development. Congress passed this provision when it was becoming clear that our nation’s transmission infrastructure was beginning to show its age and needed modernization. Congress recognized the need for a modern and resilient grid that could accommodate increasing demands for power with newly available resources. Based on our thorough review of the Clean Line project, it satisfies the goals for which Congress established DOE’s authority.  The project will, if built, address infrastructure challenges outlined in the 2015 Quadrennial Energy Review (QER), which focused on Energy Transmission, Storage and Distribution Infrastructure. The QER acknowledged the importance of establishing transmission lines to facilitate remote generation development of renewable energy. The QER found that new long-distance transmission capacity like Clean Line has the potential to enable lower-carbon electricity, enhance system reliability and operate at a reasonable cost to consumers."  The 2005 Energy Policy Act was a political agenda developed by the energy industry to increase the use of fossil fuels and build more energy infrastructure from which energy industry profits are derived.  Remember Cheney's Secret Energy Task Force?  Yup, that was it.  The QER, a facet of Obama's political agenda, not Congressional action, made no mention of Section 1222 or forcing new centralized transmission infrastructure like Clean Line.  T&D World simply made it all up.
  5. American Wind Energy Association chief executive officer Tom Kiernan believes he knows what rural America wants and needs.  “The DoE’s decision is a critical milestone that will open up the spigots for billions of dollars in private investment, economic opportunity in rural areas that need it most and potential savings for American consumers.”  I don't believe Kiernan speaks for rural America.  He speaks for wind energy developers who make money off rural America's sacrifice.  What an arrogant thing to say, Tom!
  6. Bloomberg (whose "Philanthropies" division gave $50M to Sierra Club's Beyond Coal Campaign) pretends that "U.S. regulators" have been "pushing to clear" a Clean Line.  "The approval highlights a potential workaround for some U.S. transmission developers who have for years dealt with regulatory delays and roadblocks at the state level while trying to site new power lines. The statute gave the Energy Department authority to clear interstate projects co-sponsored by either of two of its four public power agencies. It’s just the latest twist in the battle over transmission siting between state and federal agencies as U.S. regulators push for stronger, multi-state lines capable of moving renewable power to where it’s needed."  Not true!  DOE is not a "regulator," and its involvement in transmission is political, not regulatory.  The regulatory side of transmission (which deals with planning and rates only, not siting or permitting) is handled by the Federal Energy Regulatory Commission.  What does "clear" mean?  It means nothing!  The word that Bloomberg wanted to put in there is "permit," but that would be untrue.  What the DOE's decision does is force its federal power marketer, Southwestern Power Authority, to own the transmission project for the express purpose of avoiding state regulatory review.  As a Federal agency, SWPA is not subject to state transmission or eminent domain laws.  It's simple avoidance, not permitting, or "clearing."  In addition, Bloomberg fails to acknowledge DOE's inclusion of an "Acquisition Option" in the Participation Agreement whereby Clean Line and DOE may enter into a deal to allow Clean Line to acquire DOE's ownership in the project, once it's built.  If that happens, this entire Participation Agreement and its requirements disappear forever.  "7.2 Acquisition Option.
    (a) After the Effective Date, Holdings and DOE shall discuss and determine whether, under Applicable Law, DOE may grant to Holdings (or its nominee, assignee ordesignee) an option to acquire from DOE the DOE Acquired Real Property and AR
    Facilities after the Termination Date (the “Acquisition Option”). To the extent DOE
    determines that such an Acquisition Option may be granted under Applicable Law, DOE and Holdings shall cooperate in good faith to enter into an agreement to set forth all ofthe terms, conditions and procedures under which such an Acquisition Option may be exercised by Holdings (or its nominee, assignee or designee)."  
    *cough*  no intention of ever owning the project  *cough*
  7. SNL also has a time warp failure, insisting that Section 1222 of the 2005 Energy Policy Act was Obama's invention.  "Plains and Eastern is now the first transmission project to partner with the DOE under Section 1222 of the Energy Policy Act of 2005, an obscure provision that the Obama administration hoped would spur big expansions in the nation's electric grid."  SNL also either spills some proprietary beans, or makes up other bidders under DOE's Section 1222 RFP.  "But although the DOE talked to several developers interested in Section 1222, Plains and Eastern ended up as the only application under DOE review."  As far as the information DOE has made public, Clean Line was the ONLY company to submit projects in response to DOE's cozy RFP.  SNL also reports that Skelly believes he can obtain the majority of needed right of way through voluntary negotiations, despite entrenched landowner opposition all along the line's proposed route.  "While Clean Line has said it would only use eminent domain as a last resort and that the vast majority of the line's right-of-way would come through voluntary negotiation with landowners, in many of the states where Clean Line has proposed to build transmission lines it has faced strident opposition from landowner groups and local politicians who accuse the developer of attempting to trample on property rights."  Don't count your chickens before they hatch, Clean Line, and don't expect that any landowners believe a word you say at this point.  Based on my conversations with affected landowners, you're probably going to be seeing some major and widespread Bundy Ranch before the Feds build your project on privately held land.
I'm going to paraphrase the rest of the glittering generalities that were common to a lot of the 60+ recent articles on this debacle.  I just don't have time or space to call out each instance, and it wouldn't be fair to point the finger at just one media outlet for parroting lies that were repeated by many when their origin is unclear.
  1. Jobs fiction.  Depending on the article, thousands of jobs will be created by this project.  What they mean are fictional supply chain job numbers created by spreadsheets fed by number crunchers.  These aren't actual jobs constructing the project.  They're economic development fiction, where an investment of a certain dollar figure theoretically creates a "trickle down" of jobs.  It includes things as insignificant as an increased number of fast food lunches purchased by transient skilled workers.  Constructing transmission lines is a highly skilled and specialized occupation which is accomplished by a small number of companies whose workers travel from job to job.  These aren't long-term jobs for local people.  You locals get to sell the extra Big Macs and clean the cheap hotel rooms transient workers dirty.
  2. Clean Energy fiction.  All the articles, in one way or another, presented the fiction that this project is restricted to delivering renewable energy.  It's not.  Clean Line is a transmission line.  Transmission lines are subject to open access regulations.  Any generator can use any transmission line -- there is no such thing as a "clean energy only" transmission line.  In addition, the grid does not recognize the difference between "clean" and "dirty" electrons.  They're all the same color once they enter the transmission system.  All sorts of dirty electrons are going to sneak onto a "clean" line.  Even though DOE's Participation Agreement stipulates: "8.27 Renewable Energy Transmission. At any time during which any Transmission Services Agreements are in effect, the Clean Line Entities shall use all commercially reasonable efforts to ensure that at least 75% of the total Electrical Capacity covered by all Transmission Services Agreement that are then in effect to be covered by Transmission Services Agreements used for the transmission of renewable energy resources..." DOE also recognizes it can't enforce this stipulation, "...provided that, to the extent the
    transmission of energy from non-renewable resources is required by Applicable Law (including
    pursuant to any open access tariff rules), such events would not render the underlying
    Transmission Services Agreement from being disqualified toward the 75% threshold."
      Therefore, non-renewable energy will be counted as renewable energy for purposes of ensuring that 75% of the energy is renewable.  Wow!  Just wait until the fossil fuel industry hears about this magic trick for turning "dirty" energy into "clean" energy with the stroke of a pen!  *cough*  fig leaf  *cough*
  3. Low-cost energy!  Skelly and the DOE like to pretend that energy delivered by the project will be "low-cost."  But the generators who will use the line have yet to be priced or built.  In addition, the Federal Production Tax Credit that currently reduces wind generation costs by 2.3 cents per kwh is being phased out beginning in 2017.  Unless the wind industry can get all these wind farms built before the end of this year, the tax credit will begin being phased out through credit reductions.  All credit reductions will be added to the cost of generation.  Low-cost?  Nobody knows!  And the firm cost of buying energy via Clean Line is going to make or break any deals for firm Transmission Service Agreements that Clean Line needs before moving forward.  The proof will be in the pudding, and the pudding isn't done yet.
  4. Reliability.  Both Skelly and Moniz made statements in the media that this project will increase reliability by connecting three transmission regions.  Use of the word "reliability" should make your blood run cold, if you pay an electric bill.  Clean Line has previously made comments at regional transmission organizations purporting that because its lines could increase reliability, all ratepayers in the region should pay for them (instead of Clean Line using the "merchant" model where only users of the lines pay for them).  It's not that the regions have reliability problems that need to be solved by Clean Line projects, but that its projects will increase reliability simply by existing, and that all ratepayers in the region would benefit from increased reliability, therefore all ratepayers should pay for the Clean Line projects.  While it remains to be seen whether Clean Line will resurrect its arguments in an attempt to have ratepayers in SPP, MISO, and SERC cover its cost of building this line, the possibility is on the table. 
  5. Protections for landowners, taxpayers and ratepayers.  DOE thinks that its Participation Agreement provides protections?  I don't think so.  In fact, I've seen better protections in lines approved by state regulators.  In a future blog post, I'll review the landowner "protections" the DOE included.  Don't hold your breath.  It's another fig leaf.
  6. DOE held 15 public meetings and numerous opportunities for written comments from stakeholders.  DOE wants to take more than 700 miles of right of way from private landowners and it held only 15 public meetings?  It also failed to notify many affected landowners that the meetings were being held.  This is a travesty of "public participation" and certainly nothing to brag about.
  7. DOE says eminent domain will be used "only as a last resort."  But if it's the last resort, it's also the first resort when attempting to coerce landowners to sign voluntarily.  There is no such thing as a completely voluntary agreement when the specter of eminent domain is on the table.  All negotiations would be held with that elephant in the room, a hammer hanging over the landowner's head if they don't agree.  This is the definition of coercion, even though the Participation Agreement stipulates that "Land Agents will not use coercive action to
    induce an agreement on price or terms." 
    *cough*  window dressing *cough*
  8. DOE says the Arkansas converter station was included in response to public input.  Except I never saw one public comment that asked for an Arkansas converter station.  In fact, no Arkansas utilities expressed a desire to purchase any of Clean Line's capacity, so why would they request an Arkansas converter station?  The Arkansas converter station is a creation of Clean Line and DOE used to pretend that there's a benefit to Arkansas and it's not merely a "fly over" state.  It is a flyover state, and no Clean Line capacity will be used by Arkansans unless an Arkansas utility signs a contract to purchase it.  That may never happen.  What then?  Will the plans for an Arkansas converter station disappear?  Why build a converter station that nobody is using?
What a bunch of poppycock DOE, Clean Line and the media created here.  It's nothing but glittering generalities and lies designed to make project opposition melt away.  That won't happen.  It's going to be a rough ride, but there's too much at stake to turn around now.  Godspeed, Arkansas and Oklahoma.  You can win this!
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U.S. DOE Takes Kickback From Investors To Condemn Private Property

3/28/2016

6 Comments

 
Think your home is your castle?  Not anymore, if the Federal government can make money selling it to a private investor.

On Friday, the U.S. Department of Energy sold its authority to condemn land to private investors in exchange for two percent of the investors' profit from using the condemned land.

That's right... the U.S. DOE will receive 2% of the revenues collected by Clean Line at the end of each fiscal quarter, once the transmission line starts delivering electricity.  DOE says it will use its new windfall "to offset costs associated with federal hydropower infrastructure or for any other authorized purpose."  So, at best, this payola will be used to lower rates for customers of federal hydropower marketers.  At worst, it will be used "for any other authorized purpose."  Of course, this isn't defined. So ol' Beethoven could "authorize" the purchase of a private island for him and his renewable energy investor buddies.  Anything goes, right, Ernie?
Picture
I don't think that was the intent of Congress in allowing a brainless piece of lobbyist mischief to become part of the 2005 Energy Policy Act.  Section 1222 doesn't contemplate the Federal government making money off transmission projects it "participates" in or "owns."  Nor does it authorize the Secretary to determine how his boodle is spent.  Not anywhere.

Everybody is making money off the Clean Line scheme.  Clean Line's investors, Clean Line's executives (personally invested in the project), legislators Clean Line has "donated" to, vendors who want to supply goods and services, local governments being paid off at the rate of $7500/transmission mile, wind companies, landowners who lease their land for wind farm royalties, Federal hydropower ratepayers, environmental groups, unions, economic development hacks, and even the Federal government.  It's all profit and no sacrifice from these entities.  Everyone's got their finger into the money pie, and it costs them nothing. These are the supposed "public benefits."

And these are the sacrifices that must be made so that "the public" can benefit.  The landowner whose property is along the transmission line route is forced to sacrifice his private property to enable this money-fest for the benefit of others without any skin in the game.  He pays dearly.  The landowner can be found at the bottom of this greed pile on.  The landowner isn't part of any "share in the wealth" plan.  The landowner is involuntarily forced to make a sacrifice by having his property condemned by the Federal government so that others can profit from its use.  In exchange, the landowner is handed a one time pittance that attempts to compensate him for the current value of his property taken.  A landowner's potential for future profit related to his property?  The Federal government doesn't recognize that in its rush to provide for the future profits of energy speculators, union workers, suppliers, etc.

If my property was subject to such a taking, I'd add the following clause to any easement or survey permission presented to me, in addition to any "fair market value" or one-time structure payments:
 Participation Amount. Commencing on and after the Project Completion, Clean Line shall pay to the easement grantor (landowner) at the end of each fiscal quarter an amount equal to 2% of the gross revenues received by the Clean Line Parties from the Project during such fiscal quarter resulting from the sale of transmission service in connection with the Project (as such gross revenue amount is reflected in Clean Line's Financial Statements for such fiscal quarter, including, with respect to the first such fiscal quarter, sales of transmission service which occurred at any time prior to Project Completion) (the “Participation Amount”).
The Participation Amounts shall be paid to landowner to offset costs associated with having their property devalued and their quality of life disturbed in perpetuity, or for any other landowner authorized purpose.
The Secretary of Energy has sold you out in exchange for quarterly dividends from Clean Line Energy Partners.  Ernie would have a really hard time telling you that you're not also eligible to receive 2% of the revenues, since you're actually making an involuntary sacrifice to enable this profit-making scheme.  Fair is fair, right?
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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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